Every business needs to figure out how they are doing on a periodic basis. This figuring out requires a business to prepare a profit and loss statement for itself. Preparation of this statement is rendered easier with the use of a profit and loss statement template to calculate the values.
How to Use the Profit and Loss Statement Template
- First, adjust the free profit and loss template category by category. Do this step to make sure that the statement properly reflects this business. During this adjustment it would be a good idea to frequently save the file.
- Second, enter the numbers for each category. The template is setup to complete the calculations automatically.
- Third, review the statement. Check it for errors both spelling and values. Be sure to note any areas that have been flagged or colored red. Both indicate areas the business needs to work on financially.
Tips on Using the Profit and Loss Statement Template
- First, once the profit and loss statement template has been prepared, it is time to use what it reveals. Start by tackling what has been flagged by either reducing the expenses or increasing revenues for the category.
- Second, remember to use the template periodically to get a good look at how the business is doing. At a bare minimum, check the values at least twice a quarter for an accurate measurement of the business’s performance.
- Third, relax and print off copies of the statement. Profit and loss statements are snapshots in time. Some of these snapshots will look ugly. However, it is the trend of the snapshots that truly matters. Be sure to check the copies to check for those trends, the good and the bad.
It is important for a business to keep track of its performance on a regular basis. To track the performance of a business, a profit and loss statement is a powerful tool, highlighting both strengths and weaknesses. The preparation of a profit and loss statement is made easier through the use of a downloadable profit and loss template for Excel.
Download: Profit and Loss Statement
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