September 20th 2023
Hello,
So, you finally turned your passion project into a business and you’re making money, but you have no idea how much money you’re making and more importantly, how much money you’re spending.
This is where a Profit and Loss Statement can come in very handy. A Profit and Loss Statement is one of the 3 most important financial reports for a business. It is a financial statement that summarizes the revenue and expenses of a business during a specific timeframe. It is a powerful tool when trying to determine the profitability of your business.
A Profit and Loss Statement can appear intimidating at a first glance, but don’t be afraid!
In its most basic form a Profit and Loss Statement is sales minus expenses to get to Net Income/(Loss).
Every sale you make should be captured on the Profit and Loss Statement as well as every expense related to your business. This is important for calculating an accurate Net Income/(Loss).
Your Net Income/(Loss) will be used to determine how profitable your business is. Reviewing a Profit and Loss Statement regularly can help you to determine if your business is actually making money. It is also important for sourcing funding. When applying for any type of business loan, the bank will request a copy of your Profit and Loss Statement.
The best thing you can do for your business is have a Profit and Loss Statement to effectively track the activity of your business.
If you need help getting your Profit and Loss Statement and other Financial reports in order, we are here to help. Reach out and schedule a free 30 minute consultation so we can create a Profit and Loss Statement customized to your business.
Until next time!!!!!!
Rosemond Financial 