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The Profit & Loss statement (also referred to as an income statement, revenue statement or P&L) is used to measure your business’ financial health. It provides a summary of your sales and expenses over a given period of time so you can see whether or not you are turning a good profit.

You can choose the period of time you would like to measure by filtering your P&L statement by days, weeks, months, quarters, years or custom dates. This helps you to identify what your money is being spent on and where it’s being made. It also serves as an important report when it comes to filing your taxes or applying for a business loan.

Your profit (net income) is calculated by subtracting your business expenses from your income (revenue), although Fiskl does this automatically for you.

Let’s jump into Profit & loss main parts:

Operating income (revenue, turnover) is the amount of sales you made during the selected period. It is free of sales tax (eg. VAT, GST) as well as the rest of the categories in the profit and loss statement.

Cost of Sales consists of direct costs attributed to what you sell. Like purchase price of product, shipping cost for product deliveries into the warehouse, cost per employee hours spent on projects billable to clients.

Gross profit shows you the margin you got after deducting direct costs (cost of goods sold, cost of sales etc) from your revenue. This also shows how much you can allocate to operating expenses in order for your company to stay healthy. Let’s say your Gross profit is $100,000 (60% of your revenue) and your operating expenses are $30,000 then you can pay your operating expenses out of your gross profit and plan your future business activities with 30% to be spent on operating expenses. Using this example, you’ll still have the other 70% for future growth, investment, or owners withdrawal.

Operating expenses represent a list of categories that can’t be attributed directly to the cost of items you sold but are still very important for your daily business activities. It includes indirect costs such as salaries, rent, advertising, bank charges, travel, and so forth. These types of expenses can be fixed or variable, meaning they could directly impact your business growth. It’s crucial to remember this when you project your business results or model possible different business growth scenarios. You have to increase the variable part of expenses based on its driver (eg. revenue increase, new employees) growth when you forecast.

Operating profit is the difference you have between gross profit and operating expenses. This number is the result of your operating (business) activities. It shows how much money you made from your operations. If we go back to the previous example, then it is the $70,000 that you can spend on development or withdrawal and so on.

Non-operating profit comes from activities which are not your main business or from financial activities. It’s other income categories (for example dividends paid, interest received, gain or loss on exchange rates) minus other expenses (for example interest paid, depreciation, income tax payment, sales of fixed assets).

Profit is earnings after Interest and tax expenses or simply put it is operating profit minus non-operating profit.

You can choose which method of accounting you would like displayed on your P&L report, either Cash or Accrual. If you select cash it will show you immediate revenue and expenses based on cash payments or by selecting Accrual it will display your anticipated revenue and expenses which is more accurate and preferable for the business results overview.

Go to Reports under the Accounting section within the Fiskl main menu and click on Profit and Loss.

From here you have a number of options available:

  • To filter your report by a specified period in time, select a filter using the dropdown arrow or select dates using the date selector.
  • To select Accrual or Cash accounting, switch the toggle.
  • If you would like to show a high level summary or a fully detailed report, select Summary/Details.
  • To add notes to your report, click on the note icon at the top right of your screen.
  • To export your report, click on the export button at the top right of your screen, this will export your report into Excel
  • To print your report, click on the print button at the top right of your screen, this will also produce a PDF document.

Your reports are always date and time stamped so you always know that you are viewing up to date information.

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