Examples of Profit and Loss Statements with Template
What is a profit and loss statement?
A profit and loss statement is a record of a company's income and expenses over a set time period. A profit and loss statement is sometimes called an income statement or a profit and loss report.
No matter what you call it, it's a very important financial statement. If you're self-employed, you need one to file your taxes. You'll also need one if you're applying for a business loan or looking for investors.
What is a profit and loss statement for self-employed?
While the IRS doesn't specifically require you to file a profit and loss statement, it does require a sole proprietorship to report revenue and cost of goods sold. This is found on your profit and loss statement along with your expenses and any returns or refunds you processed. This all goes on a Schedule C form for your income tax return.
How do you know if you need to file as self employed? According to the IRS, you must include a Schedule C if:
-the main reason for the activity is to generate income, and -the activity was performed on a continuous basis.
How do you write a profit and loss statement?
There are 2 main sections to a profit and loss statement: revenue and expenses.
First enter your total sales. You can break them down into subcategories if it makes sense for your business. You can also include any discounts or returns that were made during the time period.
Included under revenue is the Cost of Goods Sold, or COGS. This is exactly what it sounds like, is the cost of the materials or inventory used to make products.
Subtract the COGS from the gross revenue and you have Gross Profit.
Now list the expenses that were paid for the operation of the business.
You can categorize them into: rent, advertising costs, bank fees, office supplies, vendors and contractors, maintenance and repairs, utilities, professional fees for lawyers and accountants and payroll expenses.
Subtract the expenses from the gross profit. This is earnings before interest, taxes, depreciation, and amortization or EBITDA.
List any interest on business debt and subtract from the EBITA to get the Net Income.
List taxes that you paid and subtract from the Net Income.
It's a 3-in-one template! It includes all three examples:
Simple P&L Self-employed P&L Small Business P&L
But how do you know which one to use?
It doesn't matter! You fill in your data only one time in the data input tab and all 3 are generated for you. The you can compare all three and use the one that covers the amount of detail that fits your business.
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