Self Employed Profit And Loss Statement Template

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If you’re self-employed, preparing a profit and loss statement can seem like an overwhelming task. No matter how expert you are in your craft, you’ve probably never studied finance. You started your business because you love it or are good at it, not because you enjoy crunching the numbers every month.

Self Employed Profit And Loss Statement Template

Being self-employed can be complicated enough as it is, so for your convenience (and headache) we’ve created a simple and easy template to help you prepare a professional P&L in no time.

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Accounting has been widely practiced since ancient times. Some of the oldest writings ever recovered come from ancient Sumer, one of the oldest known civilizations associated with finance and trade. And the ancient Chinese and Romans are known for their records, including financial statements.

Fortunately for us, we no longer cut figures into clay tablets or scratch numbers on papyrus. Thousands of years of progress have also partially simplified our accounting.

If you are self-employed and want to track 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 your company’s assets, liabilities and equity. If you also need a balance sheet template, here are some great templates.

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A profit and loss statement (also known as a P&L) is a financial document that summarizes your company’s revenue and expenses over a period of time, usually monthly, quarterly or annually.

The information you add to your P&L tells you about your company’s ability to make a profit by increasing revenue, decreasing costs, or both.

You may also find that the P&L statement has slightly different names, including the profit and loss statement, the statement of operations, the income statement, the statement of financial results, and the income and expense statement.

If you are self-employed or a business owner, an income statement is absolutely necessary for:

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A profit and loss 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 “big three” financial statements used by accountants and other stakeholders.

Financial statements are specially prepared documents of the company’s financial activity. They are recorded either over a period of time (for example annually) or in a specific period of time (for example at the end of a quarter).

For added clarity, a cash flow statement, unlike an income statement, cannot be used to prepare your income tax return. That’s because cash flow statements don’t show “net income” or profitability like a profit and loss statement.

A Guide To Financial Statements With Template

Of course, there are many bookkeeping and accounting software alternatives available. Some offer mobile apps, automated bank reconciliation reports, automated payments, and even tracking your inventory.

But they come at a price. Accounting software like Intuit Quickbooks can cost as much as $1,800 a year. And these are just the costs that have been revealed. This type of accounting software also has a hidden cost – complexity.

Many accounting alternatives are difficult to learn and have a steep learning curve. You will pay not only in money, but also in your time.

Fortunately, the income statement template we’ve created and offered you here for free is easy to use and provides everything you need to get started.

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Even better, unlike accounting software, you have 100% control over personalizing your income statement, perfecting it for your individual needs.

Breaking these lines allows you to quickly track your profits with two equations that are so simple to a 7-year-old:

In English, you can find the gross profit by subtracting the cost of goods sold from the total revenue. And you find your net profit – your bottom line – by subtracting your operating expenses from your gross profit.

Revenue is the total amount of credit and cash sales you made over a period of time, such as a month, quarter, or year. The total income can be calculated using the formula:

Profit And Loss Statement Profit And Loss Spreadsheet P And

Remember that it is important to distinguish between costs and expenses. Costs (or “cost of goods sold” as they are called in the template) are products that you have bought with the intention of selling them.

Meanwhile, expenses are the general “operating costs” or “operating costs” of your business. Your expenses may include rent, utilities, office supplies, updated computers or software, and postage. Depreciation is also considered an operating cost.

Your gross profit is determined by subtracting CoGS (cost of goods sold) from your total revenue. This template has a built-in gross profit margin.

The amount of gross profit is shown as a percentage below the gross profit/(loss) figure. Your gross profit margin is calculated by dividing gross profit by revenue.

Profit And Loss Statement

What is the gross profit percentage? It is simply the profitability ratio. It is used to measure the efficiency of the company. Different industries have different expectations for efficiency, and we recommend researching this for your specific business, but around 50% is a good goal.

This template shows your gross profit monthly and yearly as shown below.

Meanwhile, your net profit after taxes can be considered your take home income. This is sometimes referred to as “net income”.

If your total operating expenses were greater than your total gross income, you would have made a net loss.

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At the bottom is the net profit/(loss) percentage. It shows the percentage of your total income that you will keep after all fees and taxes have been paid.

Your company logo or name can be changed in cell A1 in the top left corner of the statement. Select cell A1 and enter your business or trade name.

Depending on the nature of your business, your revenue streams may include product sales, consulting services, or online courses.

You can list your products and services in the Revenue section. If you have more than 3 products or services, enter as many rows as you need.

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To update the template to match your financial year, select cell E2 to the right of ‘Start of financial year’ and enter the first day of your financial year in DD/MM/YY format.

Helpful prompts are included in the template to help you enter the data correctly. If you see a cell with a red triangle, hover over that cell to see a prompt.

This template contains placeholder rows for all your statements. All you have to do is enter the numbers. You can check your bank statements to make sure you have included all your business expenses.

Or you might find it useful to change the wording of some expenses to suit your needs. For example, instead of “Office Supplies” you can choose “Stationery” or “Gas Mileage”. Simply select Operating Expense Name and enter the name of your expense.

Comparative Income Statement

Alternatively, if you have expenses that are not shown in the template, you can add a line to add specific business expenses.

To add another row, click on the row header where you want to add a new row and click Insert from the shortcut menu.

Once you have identified your business income and expenses, you will have a good overview of how profitable you are as a self-employed entrepreneur.

Your completed profit and loss statement shows your gross income. It will list all your business expenses for the year. And finally, it will tell you if you are making a net profit or a net loss. If anyone owns a business in the United States (regardless of the industry), they are aware that they must report financial results. We all count our money, whether it’s personal savings or the budget of the business we manage. To make life easier for accountants and managers, there are special templates. By filling them in, it is easy to understand what is currently happening in the audited entity.

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Although the income statement is an indispensable template, it (many people refer to it as an “income statement”) helps to collect specific indicators and figures for further analysis. Most businesses and entities in the United States, regardless of size, use these records to determine their current financial position, the amount earned and lost, and their results over a period of time .

Two other templates are essential for accounting: the balance sheet and the cash flow statement. These documents have different purposes, but they are also necessary to make plans and forecasts about the business and its future actions.

Like any other legal document, a profit and loss statement has a unique structure, requirements and information to contain. In this article, we will review the completion of the template and describe the elements that should be used in it, so that whoever has questions understands all the details of this article.

It can be defined as a document that lists all the income and expenses of a business

Free Profit And Loss Form

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