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If you are self-employed, preparing an income statement can seem like an overwhelming task. No matter how much experience you have in the industry, you may never study finance. You got into what you do because you love it or are good at it – not because you like the numbers every month.
Simple Profit And Loss Statement Template For Self Employed
Self-employment can be overwhelming, so for your convenience (and headache relief) we’ve created a simple and straightforward template to help you quickly prepare a professional income statement.
Profit And Loss Account: Meaning, Format & Examples
Accounting has been widely used since ancient times. Some of the oldest documents ever discovered—from ancient Sumer, one of the oldest known civilizations—relate to finance and trade. And the ancient Chinese and Romans are famous for their records, including financial records.
Fortunately, we no longer cut images on clay tablets or write numbers on papyrus. Thousands of years of progress have simplified our record-keeping in part.
If you’re self-employed and need a way to keep track of your finances, this model is for you. Alternatively, if you need an income statement template for a company, you can find one on this page.
Remember that your income statement is different from a balance sheet, which is a summary of your business’s assets, liabilities, and capital. If you still want a budget model, we have some great models for you here.
Preparing A Profit And Loss Statement
A profit and loss statement (also known as a P&L) is a financial document that summarizes a business’s income and expenses over a specific period of time, usually a month, quarter, or year.
The details you add to the P&L provide information about the company’s ability to make a profit by increasing revenue, decreasing expenses, or both.
You’ll notice that the profit and loss account goes by quite a few different names, including the profit and loss account, the operating account, the profit and loss account, the profit and loss account, and the profit and loss account.
Whether you are self-employed or a business owner, an income statement is required if:
Income Statement Template
An income statement (also called an “income statement”) can be used to analyze the financial performance of your business over a year.
The income statement is one of the “big three” financial statements used by accountants and other stakeholders.
Annual accounts are specially prepared documents for the financial affairs of the company. They are reported over a period of time (for example a year) or for a specific period of time (for example the end of a quarter).
For additional clarification, unlike an income statement, a cash flow statement cannot be used to prepare the income statement. That’s because cash flow statements don’t show “net income” or profit like the income statement.
Profit And Loss Statement Guide And Free Templates
Of course, there are many other bookkeeping and accounting software options. Some offer mobile apps, automatic bank reconciliation statements, automatic payments and even track your inventory for you.
But they come at a price. Accounting software like Intuit Quickbooks can cost as much as $1,800 per year. And that’s just the obvious cost. This type of accounting software also comes with a hidden cost – complexity.
Many accounting options are difficult to master and have a steep learning curve. Pay not only in cash, but also in your time.
Fortunately, the income statement template we’ve created, which you can get for free here, is easy to use and provides everything you need to get started.
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Even better, unlike any accounting software, you have 100% control over customizing your income statement, perfecting it for your personal needs.
By specifying these lines, you can quickly follow your profit, from the age of 7 with two simple equations:
In English, you can find your gross profit by subtracting the cost of your goods from your total revenue. You find net profit—the bottom line—by subtracting operating expenses from gross profit.
Revenue is the total amount of credit and cash sales you’ve made over a period of time, such as a month, quarter, or year. Total revenue can be calculated using the formula:
Profit And Loss Template ≡ Fill Out Printable Pdf Forms Online
Remember that it is important to distinguish between costs and expenses. Cost (or “cost of goods sold” as they call it in the model) is the products you buy with the intention of reselling.
Meanwhile, expenses are the general costs of “running” or “operating” your business. Your expenses may include rent, utilities, office supplies, updated computers or software, and postage. Depreciation is also considered an operating cost.
You find your gross profit by subtracting CoGS (cost of goods sold) from your total revenue. This model has a “gross profit margin”.
Gross profit margin is shown as a percentage below the figure for gross profit/(loss). Your gross profit margin is calculated as gross profit divided by revenue.
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What is Gross Profit Margin? It is only a profitability ratio. It is used to measure business efficiency. Different industries have different expectations for efficiency, and we recommend researching this for your specific business, but aiming to meet around 50% is a good goal.
This template easily presents the gross profit margin for the month and year as shown below.
Meanwhile, your net profit after taxes can be considered your “take-home” income. This is sometimes called “net income”.
If your total operating expenses are greater than your total gross income, you have a net loss.
Projected Income Statement
At the bottom is the net profit/(loss) percentage. This tells you what percentage of your total income you get to keep after all expenses and taxes.
Your logo or company name can be edited in the A1 box and top left of the statement. Select cell A1 and enter the name of your company or business.
Depending on the type of business you run, your income streams may include selling products, consulting services, or online courses.
You can include your products and services under the income heading. 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 fiscal year, select cell E2 to the right of “Start of fiscal year” and enter the first day of the fiscal year in the format DD/MM/YY.
To help you enter data correctly, there are helpful hints built into the template. Where you see a box with a red triangle, hover over that box to display the prompt.
This template comes with placeholder files for all your expenses. All you have to do is fill in the numbers. You may want to look at your bank statements to make sure you’ve reported all of your business expenses.
Or you may find it helpful to change the wording of some expenses to suit your needs. For example, instead of ‘office supplies’, you might prefer ‘station equipment’ or ‘gas miles’. Select the Operating Expenses topic and enter your expense name.
Income Statement: Why It’s Important + Examples (2023)
Alternatively, if you have an expense that doesn’t appear in the template, you can insert a line to add specific business expenses.
To add a new row, right-click the row header below which you want to add the new row and click Insert from the context menu.
Once you enter your company’s income and expenses, you’ll have a good idea of how profitable you are as a self-employed person.
Your completed income statement shows your gross income. It will list all your business expenses for the year. Finally, it will tell you whether you are making a net profit or a net loss. Income: 1 Your business income. 2 Full review. $. Business Expenses: 3 Advertising/Marketing. $. 4 Credit/Debit Card Charges. $. 5 Equipment rental/hire…
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Subtract all operating expenses, such as rent, utilities, and wages, from gross profit to calculate operating profit.
Take into account additional income or expenses, such as interest income or loan interest, to arrive at a net profit or loss.
Investors and shareholders rely on profit and loss accounts to assess profitability and potential returns on investment.
Share via email, fax or income declaration form URL. You can also download, print, or export forms to your favorite cloud storage service.
Small Business Income Statement Templates
Upload a document. Select Add New on the dashboard and transfer a file to the system in one of the following ways: upload it from your device or import it from the cloud, web or internal email. Then click Start Editing.
Edit the income statement form. Rearrange and rotate pages, add new and modified text, add new objects and use other useful tools. Click Done when you are finished. You can use the Documents tab to merge, share, close or unlock your files.
Save your file. Select it from the list of records. Then move the pointer to the right toolbar and choose one of the different export methods: save in multiple formats, download as PDF, send by email or save to the cloud.
It is much easier to work with documents with pdfFiller
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