Profit and Loss Statement (P&L)

A profit and loss statement, or P&L, is the report that shows your revenue, costs and the profit left over across a period, usually a month, quarter or year. Read top to bottom it tells a story: revenue at the top, then the cost of delivering it (which gives you gross profit), then your operating costs, landing on the bottom line, your net profit or loss.

For a lean founder the P&L is the single document that answers "am I actually making money?" Revenue in the bank is not profit; the P&L forces you to subtract what it cost to earn that revenue. Reviewing it monthly catches creeping costs early, shows whether a price rise is reaching the bottom line, and stops you confusing a busy month with a profitable one.

Say you're invoicing clients in Moneybird: it categorises every invoice and expense, so your P&L builds itself rather than being a once-a-year scramble in a spreadsheet. Say you bill projects by the hour and the bottom line looks thin, tracking delivery time in Toggl shows whether a client is quietly eating your margin, the cost the P&L can't see on its own. And say you want the net-profit number in front of you every morning instead of buried in the accounts, Databox can pull it onto a dashboard so the trend is impossible to ignore.

Pair the P&L with a cashflow view too, because a profitable business can still run out of cash if customers pay late.