How to use this P&L template
- Choose annual for a single column, or monthly for 12 columns plus a total. The two sets of numbers are stored separately.
- Rename, add or remove lines to match your chart of accounts.
- Enter totals from your bank statements, bookkeeping software or the expense tracker.
- Download Excel: every subtotal and margin is a formula, so you can keep editing there.
How the statement flows
Revenue − Cost of goods sold = Gross profitGross profit − Operating expenses = Operating incomeOperating income + Other income − Other expenses = Net incomeThe three margins
| Margin | Tells you |
|---|---|
| Gross margin | Whether pricing covers the direct cost of what you sell |
| Operating margin | Whether the core business is profitable after overhead |
| Net margin | What's left after financing costs and other items |
If gross margin is healthy but operating margin is thin, look at overhead. If gross margin itself is low, look at pricing or direct costs, with help from the profit margin calculator.
Using the monthly view
Twelve columns make seasonality obvious. Compare each month with the same month last year rather than the month before, and watch for expenses creeping up faster than revenue.
Mapping to Schedule C
Sole proprietors and single-member LLCs report these figures on Schedule C. Revenue goes on line 1, COGS in Part III, and operating expenses on lines 8–27 by category. The net figure feeds the self-employment tax calculator.
Common mistakes
- Recording loan proceeds as revenue, or loan principal payments as an expense.
- Recording owner draws as wages.
- Expensing a large equipment purchase in full without deciding on depreciation or Section 179.
- Leaving out months with no invoices, which hides real costs.