A profit and loss or income statement lists your sales and expenses and is generally recorded on a monthly, quarterly or yearly basis. It tells you how much real profit you’re making or losing. A profit and loss statement can help you develop sales targets and an appropriate sales price for goods/services using tools like the break-even, profit margin and mark up calculators. See our Analyse your finances page under our Business finances topic for more information about these financial tools.
On your profit and loss statement, list all your sales and expense items with the dollar amount for the next three years. For each year list the items and total the figures under the headings Sales and Expenses. Use the outline below as starting point for your profit and loss statement for each year.
Profit and loss statement for each year
- Total sales
- Cost of goods sold
- Gross profit/net sales (Calculate total sales minus cost of goods sold minus any other expenses related to the production of a good or service)
- Accountant fees
- Advertising & marketing
- Bank fees & charges
- Bank interest
- Credit card fees
- Utilities (electricity, gas, water)
- Lease/loan payments
- Rent & rates
- Motor vehicle expenses
- Repairs & maintenance
- Stationery & printing
- Income tax
- Wages (including PAYG)
- Total expenses (Total all of your expenses above)
- Net profit (Calculate Gross profit/net sales minus Total expenses
Whether you have already started or intending to start, you'll need to fill in actual or estimated figures against each item. If using estimated costs, you'll need to label them clearly. When preparing a profit and loss, ensure you also clearly state whether your figures are GST inclusive or exclusive.
Download our Profit & loss statement template (Excel, 0.04MB) to access an interactive version of this template.