If you have wondered how to make a financial income statement of profit and loss in Excel? You have to know that this is an administration tool that works for all those companies, be they small, medium or large.
The profit and loss income statement is the way to know if our business premises or company is having good results. Or on the contrary, how many losses do we have at that time? Excel will be useful for this process. With which we can make use of a wide range of formulas.
What is a financial income statement of profit and loss?
In a more extensive way, the income statement is what allows us to realize whether we are having a profitable commercial activity or not. With it we can know if our money is being badly spent or well managed. This tool can be used at various times of the year, there are those who use it 2 times a year and others who do it every month.
Despite having a simple structure, it provides us with all the necessary information to be able to make prudent decisions regarding our capital. It is extremely important that you carry out at least a financial statement of profit and loss at least once a year.
To be able to do it correctly, you should know that you have to have several important data on hand , such as total sales, advertising costs, labor and salaries paid to employees. Also the transportation costs of the sales employees. Everything will depend on the type of business you lead.
To perform this financial statement it is not necessary to perform large or complex calculations , you will only have to do some basic additions and then some simple subtractions. You can also, and to make the work much more automated, use Excel’s addition functions.
Structure to do it in Excel
As a first rule you should know that you have to organize the form starting with the title or heading , in which you will have to place the data of your company, such as the name, the tax address, below this you have to state that you are making a status of financial results of profit and loss. And finally, the period of time that this state covers.
As the first box we will have to place the most important thing, which in this case are sales, the total of everything sold in the time span for this financial statement, this figure is a gross number, from which we will have to make a series of deductions . Then we will subtract the cost required to make those sales, without placing administrative expenses.
When doing the subtraction, we will have a number that is the gross profit , which has another box below the previous one. Then we will have to deduct all the administrative expenses, for each expense a line will be used and they will be stacked one below the other to finally make the total subtraction of all the administrative expenses.
When finished, it will give us a value and this must be subtracted all personnel expenses , both fees, transportation, food and everything that is needed for the sellers to do their job in the best way. This will give us the net profit. In addition, we will have to make another box with its respective row in which we will add other income such as minor sales and commissions.
Steps to make a profit and loss income statement in Excel?
As we previously talked about the structure, to put it into practice you just have to open the program and start filling in the rows with the data previously exposed. The requested data must be provided by your company’s accountant or whoever keeps track of everything that happens in it.
Once you have made your respective income statements, you can store them in the cloud for free through the services offered by Google. You can make use of Google Sheets , transforming your Excel to this Google format.
Once you have everything ready as a last step, you can share this information with your other partners or colleagues so that everyone is aware of what is happening in the company and that they have good profits, they have the best spirit to continue working.
