Many owners only see their real numbers once a year, at tax time. By then it is too late to fix a month that lost money. A simple monthly profit and loss changes that.
The three lines that matter
- Revenue: what you earned this month, whether or not it has been paid yet.
- Direct costs: what it cost to deliver the work, such as fuel, materials, subcontractors and job labor.
- Overhead: the cost of running the business, such as insurance, rent, phones, software and your own pay.
What to look at
Gross profit is revenue minus direct costs. Net profit is what is left after overhead. Compare both with last month and the same month last year.
Cash is a separate question
A profitable month can still leave the bank account thin if clients have not paid. Look at what is owed to you alongside the profit.
Our monthly profit and loss snapshot does the math.
General information. Your accountant can set up a full profit and loss statement for your business.
This article is general information, not legal, tax or regulatory advice. Rules change; confirm current requirements with the responsible agency or a licensed professional.
