If you run a business, chances are you’ve heard of a Profit & Loss Account (also known as a P&L or income statement). But what exactly is it – and why does it matter?
At Insight Finance Solutions, we like to keep things simple. Think of us as your dedicated finance team – but without the overheads of hiring a full-time member of staff.
So, what is a Profit & Loss Account?
A Profit & Loss Account shows your business income and expenses over a set period – usually monthly, quarterly or annually. It helps you understand:
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How much money is coming into your business
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What you’re spending money on
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Whether you’re making a profit or a loss
It’s basically a snapshot of how your business is doing financially.
We do this on a monthly basis, so you always know where you are – every step of the way.
Why do you need one?
Running a business without looking at your P&L is a bit like trying to drive with your eyes shut. You might get somewhere, but it’s probably not going to end well.
Here’s why keeping an eye on your Profit & Loss is so important:
1. Make better decisions
Your P&L helps you spot trends – like rising costs or a dip in income – so you can take action early. It gives you real insight into where your money is going and where you can make improvements.
2. Stay tax-ready
Having an up-to-date P&L makes your life a whole lot easier when it comes to working with your accountant. It keeps everything organised and helps avoid last-minute panic.
3. Support funding and finance applications
Banks, lenders, and investors love a well-prepared P&L. It shows them you’re in control of your numbers and gives them the confidence to back your business.
4. Measure progress and performance
Seeing your profits grow (or losses shrink!) is a great motivator. Your P&L lets you track your goals and see if you’re heading in the right direction.
What should be included?
A good Profit & Loss Account will show:
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Your total income (sales, services, etc.)
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Your cost of sales (materials, stock, subcontractors)
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Your gross profit (income minus cost of sales)
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Your overheads (rent, wages, utilities, marketing, etc.)
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Your net profit or loss (what’s left after all expenses)
It can be tailored to your business – and we’ll walk you through it so it actually makes sense.
We’re here to help
Insight Finance Solutions isn’t your average accountancy and bookkeeping business. We’re here as part of your team – working with you behind the scenes each month to keep your finances clear, simple, and stress-free.
We make sure you know where you stand financially, every step of the way – so you can make confident decisions and grow your business with clarity.
Ready to feel more in control of your numbers? Let’s chat.