A profit and loss statement (P&L) sounds formal, but it answers a simple question: after paying for everything, did the business make money this month?
The three parts
- Revenue: all the money your sales brought in.
- Cost of goods: what you paid for what you sold, such as ingredients or stock.
- Expenses: everything else, including rent, wages, power, internet and delivery.
Revenue minus cost of goods is your gross profit. Gross profit minus expenses is your net profit. Net profit is what is left for you.
Three questions to ask each month
- Is my gross margin holding steady? If it drops, prices or costs have changed.
- Which expense grew the most? Rent is fixed, but wages, supplies and waste can drift.
- How much cash did I take out compared with the profit I actually made?
Keep records from day one
You cannot build a P&L from memory. Record every sale and every expense with a date, and keep receipts. TU2 shows profit and margin dashboards for restaurants, salons and shops, and includes expense tracking where the plan lists it.