Profit and Loss Statement template should be saved in computers to be used anytime. So, what is actually the profit and loss statement? It is basically a kind of financial reports included in the accounting cycles produced in a certain period. It involves all the elements of incomes and expenses of the companies. When it is calculated well, the real conditions can be seen whether the company has profits or loss.
How to Arrange Profit and Loss Reports
In fact, the activities of arranging profit and loss reports are quite easy. Well, there are still more reasons aside from the availability of the profit and loss statement template Excel. You only need to quote all the balances from the income account alongside the operating expenses in the columns of profit and loss on the balance sheet.
Some elements contained in the reports are as follow. They are the income from the sales that are reduced by the main burdens of sales. The result is gross profit or loss. You can just keep the result while calculating other elements. Next, the operating expenses are added by the income and other expenses. The result is namely the profit or loss before the tax. Then, the gross profit or loss is lessened by the profit and loss before the tax. Keep it. The result is again lessened by the tax expenses and it gives you the final result; net profit or loss.
The Types of Profit – Loss Reports
In general, there are two main forms of profit-loss reports. First, it is the Single Step or the direct form. There are some points that must be included in this form. The entire income as results of the sales are grouped and then added up. Next, All the expenses are also grouped and added up. Then, the sum up of income is lessened by the expenses. Finally, the result is namely the net profit and loss.
Second, it is namely the multiple steps or the indirect form. The steps are longer indeed but it seems that the descriptions tend to be clearer. What are the steps? In the income account, there are two types of income; operating revenues and non-operating revenues. The expenses are also differed into two types, operating expenses and non-operating expenses. The operating revenues and expenses are served on the first part. It is followed by the data of non-operating revenues and expenses.
Both forms are actually just similar from one to another. They are only differed by if the revenues and expenses need to be included or not.
Formats of Profit-Loss Reports
The profit and loss statement template can indeed be simply downloaded on the internet. However, it is better for sure if you are able to arrange it by yourself. This way, the process of making the reports can be easier and more understandable. In general, the format of the template is similar to other types of reports. On the header, there is the identity of the company, the title, and the period. Under the “Identity of the company”, there are is name of the company along with the types of reports to be served and the year or period.
Next, there is the description of the profit and loss to be reported. Some points need to be included; they are the total income or revenue, the total expense, and the profit or loss. The components of total revenue and total expense are found from the columns of profit and loss mentioned in the trial balance. As information, the components of profit and loss are the difference between the total revenue and total expense.
The conclusions are as follows; if the revenue is bigger than the expense, it means you get the profit while if the revenue is smaller than the expense, it is namely loss.
The Purposes of Profit-Loss Reports
So, what are actually the main purposes of arranging the profit and loss report? More than just to know whether your company is profitable or not, the report has some purposes. First, it is to know the number of tax to be paid. It has been mentioned in the previous point that the tax is one of the results given by the calculation.
Second, it is to check the histories of profits and loss from time to time. If you keep well the profit and loss statement template, you can just see whether your business or company is improved or not. It is such an evaluation regarding what to be repaired when there is something wrong in the management. Third, it is to check the efficiency and effectiveness of the business or company based on the value of business costs.
How to Get the Profit and Loss Statement Template
In a case you cannot arrange the template by yourself; there are some ways to get the profit and loss statement template free on the internet. One of them is visiting some websites for accounting templates like Beecloud.com, Paper.com, and Business.Tutplus.com. Not only you can find various templates to ease your works, but they also provide some apps for accounting with modern and sophisticated features. This way, you don’t need to spend too much time in front of your computer for the templates. Undeniably, making the templates need to be accurate to avoid any errors in the calculation.
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But sure, no matter how easy and practical the templates are, it doesn’t mean you can ignore the basic concepts and knowledge and accounting including in making reports for profit and loss. The templates and apps are just to make you feel more convenient anyway.
There are some important points in arranging the Profit-Loss reports. Some of them are the ways to arrange the reports, types, formats, purposes, and all about the templates. Aside from creating the templates by yourself, it is possible to go on some websites to download the profit and loss statement template for easier jobs.