Profit And Loss Template and Why You Need This For The Business Prospect
Profit and loss templates are used to make profit and loss report in a period of time such as monthly, quarterly and also annually. Both small and big companies often use this profit and loss template to help evaluate the progress of the business. By this way, they can take the best decision.
What Is A Profit and Loss Statement?
The profit and loss statement will summarize the expense, profit, costs, and also the revenue of business activity in a specific period. Besides, many people also call it P&L statement to refer income statement, profit, and loss, statement of financial result, statement of operations, earning statements, income statements and expense statement.
If we break down this profit and loss statement, this is actually one of the three statements issued by the company; balance sheet and cash flows.
In terms of format, the income statement will subtract the revenue and the business costs which are the tax expenses, operating expenses, goods sold and also interest expense. Then, the result of the subtraction is called the net income.
Why Do You Need the Profit And Loss Template?
Lead To A Wiser Decision
Having the P&L statement will help you look back on how good your business is. With the result in mind, you then can make a wiser decision in terms of spending and investment. This is why people always say the P&L statement can help you predict the future of business.
It Can Be Your Business Success Proof
Sooner or later you might think about expanding your business. Then to get a bigger fund is by presenting your business project in front of the investor. In this case, the P&L statement is the best tool to convince them that your business is profitable. It can be a measure of trust.
Help you Prepare The Taxes
Updating the P&L statements will help you sort out the business taxes which give you a clearer mind too.
How To Make A Clean Profit and Loss Statement?
Using our profit and loss templates is not enough. You have to follow certain principles that we will explain below:
Keep Clean Records
Keep in mind that you make a clean record about how much money that is coming to your account and your operations. If you think this is a difficult task and takes your time, hiring an accountant is always wise.
Select The Specific Time
Regardless of the period, decide the “when” of your report. You need to find the revenue which is the amount of income you gain.
Calculate Your Profit
After you find out the revenue of your business, then it is time to calculate your profit so you will know the net income after taxes.
In fact, making a profit and loss statement cannot be done once a while that you spend your time recording the daily, weekly and monthly income and expense in just several days. You need to break it down with our profit and loss template so you will not miss out important things.
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