A profit and loss statement from your bank statements

What the P&L contains

Income, cost of goods sold, gross profit, expenses by category and net income for the month. The P&L sheet is built from live formulas that sum the Ledger sheet, so clicking any number shows what it adds up. Catch-up uploads get one column per month.

Why a categorized ledger comes first

A P&L is only as good as the categories. Each transaction gets one of a standard small-business set (Sales, Cost of Goods Sold, Payroll and Wages, Rent, Utilities, Insurance, Vehicle and Fuel, Supplies, Advertising, Software, Professional Fees, Bank and Merchant Fees, Meals, Travel, Loan Payments, Owner Draws and others), with a reason where the choice is not obvious. Transfers between your own accounts are excluded, so they do not inflate income or expenses.

How to read it

1. Start at net income: is it positive, and is it what you expected?
2. Look at gross profit. If it is thin, your costs of goods or pricing need attention.
3. Scan the biggest expense lines for surprises.
4. Open the Questions tab: items still undecided can move the numbers.

What is not in it

• No balance sheet or cash flow statement.
• No accruals: it works from cash transactions on your statements, so unpaid invoices and bills are not in it.
• No tax treatment: it does not say what is deductible or compliant.

If you need accrual books or tax filing, use an accountant. This is prep.

Cash basis vs accrual, briefly

A P&L built from bank statements is on a cash basis: income when money arrives, expenses when money leaves. Accrual accounting records income when earned and expenses when incurred. For many small businesses cash basis is a fine view of how the month went. If you invoice customers on credit or carry inventory, an accountant may advise accrual. We do not decide that for you.

A short worked example

A small shop in one month: card deposits of $18,400 are sales, supplier payments of $7,900 are cost of goods, payroll debits are $4,200, rent and utilities $2,300, and other expenses $1,100. Gross profit is $10,500 and net income is $2,900 before any tax. The numbers are illustrative, not a customer result. In the workbook each of these lines is a SUM over the Ledger rows with that category, so you can click through to the transactions.

Template vs. real numbers

Searching for a P&L finds templates: empty tables to type into. A template is useful when you already know your numbers. When you only have statements, the hard work is the categorizing, and that is the part this service does. If you only want a template, plenty are free. If you want the numbers filled in from your own statements, upload them.

Checking the P&L before you trust it

Three checks take five minutes. First, open the Notes tab and read the reconciliation line: it states whether the ledger total matched the statements. Second, click a big number on the P&L and look at the ledger rows behind it. Third, read the Questions tab for items that could change a category. If all three look right, the P&L is a sound draft for you and your accountant.

How to get one

Upload the month statements (up to 60 files), say the business type and your software, and the P&L comes back in the same workbook. A fictional taco truck sample is described on how it works. See pricing.

A sample workbook for a fictional taco truck is at books.myclawn.com/examples/sample-books.xlsx.

Upload this month's statements. Bookkeeping prep only, not tax advice. 14-day refund if it misses, two rounds of changes, cancel any time.

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