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If you’re self-employed, preparing an income statement can seem like a daunting task. No matter how skilled you are at trading, chances are you’ve never studied finance. You do what you do because you love it or are good at it, not because you like crunching numbers every month.
Profit And Loss Statement For Self Employed Template Free
Being self-employed can be hard enough, so for your convenience (and headache) we’ve created a simple and straightforward template to help you create a professional income statement in no time.
Profit And Loss Statement Template Self Employed
Accounting has been widely used since ancient times. Some of the oldest writings ever discovered from ancient Sumer, one of the oldest known civilizations, deal with finance and trade. And the ancient Chinese and Romans were famous for their record keeping, including financial statements.
Fortunately for us, we no longer carve pictures on clay tablets or write numbers on papyrus. Millennial advances have also simplified our calculations.
If you’re self-employed and want to keep track of your finances, this template is for you. Alternatively, if you need a business income statement template, you can find it on this page.
Remember that your income statement is different from your balance sheet, which is a summary of the company’s assets, liabilities, and equity. If you also need a balance sheet template, we have a great template for you here.
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An income statement (aka P&L) is a financial document that summarizes your company’s income and expenses over a period of time, usually a month, quarter, or year.
The details you add to your profit and loss provide information about your business’s ability to generate revenue, reduce costs, or both.
You may also see the income statement under several different names, including the income statement, operating statement, income statement, income statement, and income and expense statement.
If you are self-employed or a business owner, an income statement is mandatory.
Cleaning Service Profit And Loss Statement Template
An income statement (also known as an “income statement”) can be used to analyze your company’s financial performance throughout the year.
The income statement is one of the three major financial statements used by accountants and other stakeholders.
Financial statements are documents prepared specifically for the company’s financial activities. They are recorded for a specific period of time (e.g. a year) or a specific time period (e.g. at the end of a quarter).
To be clear, unlike the income statement, the cash flow statement cannot be used to prepare your income tax return. This is because a cash flow statement does not show “net income” or profitability like a profit and loss statement.
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Of course, there are still many alternative accounting and bookkeeping software. Some offer mobile apps, automatic bank reconciliation reports, automatic payments, and even track your inventory.
But they come at a price. Accounting software like Intuit Quickbooks can cost $1,800 a year. And that’s just the total cost. This type of accounting software also has a hidden cost: complexity.
Many accounting alternatives are difficult to master and have a steep learning curve. You pay not only with money, but also with your time.
Fortunately, the income statement template we’ve created and provided here for free is easy to use and includes everything you need to get started.
Free Profit And Loss Template
Even better, unlike other accounting software, you have 100% control over customizing your P&L, enhancing it to your personal needs.
This line classification allows you to quickly track profits using two equations so simple a 7-year-old can do it:
In English, you find gross profit by subtracting cost of goods sold from total revenue. And you find the net profit, your profit, by subtracting your operating expenses from your gross profit.
Revenue is the total amount of credit and cash sales you make in a given period of time, such as a month, quarter, or year. Total revenue can be calculated using the following formula:
What Is A Profit And Loss Statement? P&l Example
Remember, it’s important to distinguish between your expenses and your expenses. Cost (or “Cost of Goods Sold” as it’s called in the template) is the product you’ve purchased for resale.
Expenses, on the other hand, are the total “running” or “operating costs” of your business. Your costs may include rent, utilities, office supplies, updated computers or software, and shipping. Depreciation is also considered an operating expense.
Your gross profit is found by subtracting your CoGS (cost of goods sold) from your total revenue. This template has a built-in gross profit margin.
Gross profit margin is shown as a percentage of the gross profit/(loss) figure below. Your gross profit margin is calculated by dividing gross profit by revenue.
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What is the gross profit margin percentage? It’s just a profitability ratio. It is used to measure the company’s performance. Different industries have different performance expectations and we recommend researching this for your business, but aiming for around 50% is a good goal.
This template easily represents your monthly and yearly gross profit margin as shown below.
Meanwhile, your net profit after taxes can be considered your “take home” income. Sometimes this is called “purgatory”.
If your total operating expenses are greater than your total gross income, you will experience a net loss.
Profit And Loss Statement (p&l)
At the bottom is the net profit/(loss) percentage. This will give you a percentage of the total income that you should keep after all expenses and taxes are paid.
Your logo or company name can be edited in cell A1 and in the upper left corner of the excerpt. Just select cell A1 and enter your company or product name.
Depending on the type of business you run, your income might include selling products, consulting services, or online courses.
You can list your products and services under the Income section. If you have more than 3 products or services, just enter as many lines as you need.
Free Printable Income Statement Template [examples]
To update the template to match your fiscal year, select cell E2 to the right of “Start of Fiscal Year” and enter the first day of your fiscal year in DD/MM/YY format.
There are useful instructions in the template to enter the data correctly. If you see a cell with a red triangle, hover over it to see a tooltip.
This template comes with placeholder lines for all your expenses. All you have to do is enter the numbers. You can check your bank statements to make sure you have covered all your business expenses.
Or you may find it useful to change the wording of some expenses to suit your needs. For example, you might prefer “Stationery” or “Gas Mileage” instead of “Office Supplies”. Just select the name Activity Expenses and enter the name of your expense.
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Alternatively, if you have expenses that don’t appear in the template, you can add lines to add company-specific expenses.
To add another row, right-click the row header below where you want to add the new row and click Add from the shortcut menu.
Entering your company’s income and expenses will give you a good idea of how profitable you are as an FIE.
Your full income statement shows your gross income. It shows all your business expenses for the year. And finally, it will show you whether you made a net profit or a net loss. Anyone who owns any type of business (regardless of industry) in the US is aware of the need for an income statement. We all count our money, whether we’re reviewing our personal savings or the budget of the business we run. Custom templates are available to make life easier for accountants and managers. By filling them in, you can easily understand what the current situation is in the organization in question.
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Although the income statement is an indispensable template, the income statement (many people refer to it as the “income statement”) helps to collect certain ratios and figures for further analysis. Most companies and organizations in the United States, regardless of their size, use this data to determine their current financial situation, the profit and loss they are making, and their performance over a period of time.
Two other templates are important for accounting: the balance sheet and the cash flow statement. These documents serve different purposes, but are also necessary for making plans and making predictions about the company and what they will do next.
Like any legal document, an income statement has a unique structure, requirements, and details that must be included. In this article, we’ll go over how to fill out the template and explain the elements you need to use so that anyone with questions can understand all the features of this document.
It can be defined as a document that lists all the income and expenses of an organization
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