The Small Business Specialists
Phone: 13 12 49
The profit and loss statement is a summary of the financial performance of a business over time (monthly, quarterly or annually is most common). It reflects the past performance of the business and is the report most often used by small business owners to track how their business is performing.
As the name indicates the profit and loss statement (also known as a statement of financial performance or an income statement) measures the profit or loss of a business over a specified period. A profit and loss statement summarises the income for a period and subtracts the expenses incurred for the same period to calculate the profit or loss for the business.
Sole traders, partnerships and small proprietary companies are not required to prepare and lodge a profit and loss statement with their annual tax return. However, they are very useful in helping you to objectively determine the financial performance of your business. Most accounting software packages will produce a profit and loss statement, but you may need the help of a bookkeeper or an accountant unless your business is very small.
Producing regular profit and loss statements (at least quarterly or monthly) will enable you to: