Free profit and loss statement template

A profit and loss statement is a financial report that shows a business's profits or losses over a set period of time. It summarises the business's income and expenses, and typically, it shows profits both before and after taxes. Monthly, quarterly or yearly are the most common periods to do a P&L statement.

A P&L statement often doesn’t report income tax. Instead, it reports profit or loss before tax. This profit or loss – which is on the final row of this free P&L template – is used to help calculate taxes. A business will generally be taxed on its profits. If you find a P&L statement showing income taxes, that amount will then be subtracted to give a final figure that is net profit after tax.

The most important part of a profit and loss statement is the bottom line. It shows how much your business earned or lost during the time period used. If you have a profit, your business strategy is working. If you have a loss, you may need to take a closer look to see where the problem lies. Pay attention to your revenue, cost of goods sold, operating expenses, and taxes as they have a direct impact on the bottom line and should be considered when making investments or budget planning.

Yes, you can make a profit and loss statement with Excel or Google Sheets, but our simple profit and loss template is easier to complete and can be used over and over again. An even easier option is to use accounting software to generate your profit and loss reports. With cloud-based software, you can access accurate, up-to-date numbers and financial reports from anywhere.

Go to the download section on this page, fill in your details and we’ll send you an email with the template as a downloadable PDF. We’ll also send a guide on how to use it with a sample P&L statement. You’ll need to have a PDF reader installed to use the template.

Record your income and expenses in line with your chosen accounting method. With the accrual method, you record revenue or expenses when you earn the money or incur the expense, but with the cash basis method, you don't record anything until the cash actually exchanges hands. You must be consistent about using one or the other if you want to create accurate reports.

Profit and loss statements cover specific periods of time such as weeks, months, quarters, or years. Consider looking at a variety of time periods to see how your business does during different intervals – for example, an annual report will show how your business did over a year, while quarterly and monthly reports help to track seasonal trends. When comparing different time periods, make sure to use consistent date ranges.

List all of your business's revenue from different sources in the designated fields, and the template will automatically calculate a total. Next, list your cost of sales and all of your fixed and variable expenses in their designated fields. Once you've entered everything, the template will subtract expenses from revenue to calculate your net profit before tax.

Your net profit before tax will be displayed at the bottom of the template. Use this number and the other details on your report to make informed decisions for your business. Understanding the profitability of your business at different time periods can help you create budgets and make smart financial decisions.

The final row of this free P&L template will display the net profit before tax, which can be used to help calculate a business’s tax bill. This assumes that all the expenses listed on the P&L are deductible. Reasonable or ordinary expenses generally are, but there are exceptions and nuanced rules in certain cases. Your tax office has details to help you understand what qualifies.

Once you’ve created the statement, it's time to print and/or save it. You can use past P&L statements to track the history of your business's finances and compare with new reports to see how your business is improving.

Want to learn more about how to understand your profit and loss statement or check you're in line with local regulations? An accountant or bookkeeper can help you complete your profit and loss statement template and avoid mistakes.