Profit and Loss Statement

Knowing how much money your business has received is not enough to know whether the business is actually making a profit. A Profit & Loss Statement helps you see the financial performance of your business by bringing together sales, cost of goods sold, and business expenses to show whether you made a profit or incurred a loss during a selected period.

Savetime Calculator POS provides a Profit & Loss Statement as part of its financial reporting tools, giving business owners a clearer view of how their business is performing.

What Does the Profit & Loss Statement Show?

The Profit & Loss Statement brings together the key figures needed to understand your business’s profitability.

It can show:

• Sales Revenue – the income generated from selling products.
• Cost of Goods Sold (COGS) – the cost associated with the products that have been sold.
• Gross Profit – the amount remaining after the cost of goods sold is deducted from sales.
• Business Expenses – expenses recorded by the business during the period.
• Current Profit – the profit remaining after business expenses have been accounted for.

This gives you a much clearer picture than simply looking at the money that has passed through your sales records.

Gross Profit and Current Profit

The report separates your gross profit from your current profit, helping you understand where your business’s money is going.

Gross Profit is calculated after deducting the cost of the products sold from your sales.

Current Profit takes the calculation further by accounting for the business expenses recorded during the period.

For example, if your business makes KSh 385,000 in sales, has KSh 220,000 in cost of goods sold, and records KSh 20,000 in expenses:

• Sales: KSh 385,000
• Cost of Goods Sold: KSh 220,000
• Gross Profit: KSh 165,000
• Expenses: KSh 20,000
• Current Profit: KSh 145,000

The report therefore helps you see not only what you sold, but what remains after the costs and expenses have been taken into account.

Why a Profit & Loss Statement Matters

A business can have strong sales and still make very little profit. Looking at sales alone can therefore give a misleading picture of business performance.

The Profit & Loss Statement helps you:

• Understand whether the business is profitable
• See how much gross profit your sales are generating
• Monitor the effect of business expenses on profitability
• Evaluate business performance over a period
• Make better-informed pricing and spending decisions

It turns your recorded business transactions into information you can use to understand the financial health of the business.

Part of Your Financial Reports

The Profit & Loss Statement is one part of the broader financial reporting available in Savetime Calculator POS.

It works alongside the Cash Flow Statement and Balance Sheet, with each report providing a different view of the business.

The Profit & Loss Statement focuses on profitability. It helps you understand how much your business has earned after relevant costs and expenses.

Want to understand your business beyond daily sales? Savetime Calculator POS brings your sales, expenses, inventory and financial information together to give you greater visibility of your business.