If Interested in diving deeper. Here is a video where I take a look at a Profit and Loss Statement and What it is Telling Us.... ua-cam.com/video/tldpl71jF5g/v-deo.html
I’ve watched a few videos explaining the income statement/ P&L And you were the only one that clarified labor costs (COGS) vs labor costs (Overheads) So appreciative, thank you!🙏🏻🙏🏻
I appreciate the feedback. I've noticed a lot of folks lump them together and I just don't think that helps you price correctly and have a true gross margin. - Tammy
It has it's time and place, especially if you have smaller units or stores that play into the bigger picture but for most folks, they just need to make sure that number is bigger than their expenses and I have found the it just confuses smaller business owners and they can work around it in most small businesses that don't have a lot of skus
Thank you for this video. Im always asked to give a P/L to my insurance Company and I try to avoid it ALOT lol this has really helped me along with finding the spreadsheet you created as well. FOLLOWING FOR MORE GREAT INFORMATION!
Awesome. I have heard of folks that make some good money doing those Christmas lights. Especially as they retained clients and get quicker on those homes. Good luck! - Tammy
@@BadassBusinessOwners good money with repeat business and charging premium pricing. Just found you searching P & L on UA-cam. Going into 4th years and really diving into numbers now.
Great video, thanks for sharing your wisdom and knowledge. I’m fuzzy on the COGS section with regard to taxes? What taxes are you referring to that should be in COGS? Is it the prior years taxes on profit? Some clarity would be appreciated. TIA
Great question. Sometimes folks will have payroll taxes, rental tax, stuff like that. So if you pay taxes on other things outside of your federal or state taxes you would capture it there typically. - Tammy
Thank you. It was the best one l saw. One question, if you need to prepare them with the monthly bank statements and you have money from the previous month, how do you make these calculations? Does it has to match the endings balance? I need to prepare some and been breaking my head for 3 weeks already. How is it going to match if l cant use the balance of previous month. Thanks in advance
Your Profit & Loss is just a snapshot of a particular time. So if you are doing say last month. You just need the items that came in or went out for that month. Anything prior is part of past months. So you would count all sales from the 1st thru the 30th for example and any bills/money spent. If you take in $1,000 in sales, yet your COGS & Expenses ran $1,200 (so you dipped into past money to pay the bills), then your P&L would just register a $200 loss. - Hope this helps. Tammy
Great presentation! Easy to understand. Thank you. Question: What kind of software can you recommend? I have VERY BASIC knowledge about accounting. I deal with Buying, Mantaining and Renting Real Estate. Thank you, again.
Glad it was helpful! I'm a huge fan of Quickbooks (babolearning.com/quickbooks) . When I had rentals in the past, I also used Quicken for business and property (amzn.to/3tyUgVM) I find they both are helpful. At least they were for me. Tammy
Thanks for sharing. It was great to see the statement and numbers to accompany the explanation. I work for myself so i'm directly involved with the creation of the service, however I put my salary in operational expenses because regardless of if i close a client or not, i still need to be paid. For me if i hired another freelance to work on a service that would be COGS right? I think i may have gotten confused around the Net Profit area, I saw other definitions say it's the Profit after taxes, but i think you say we are paying taxes out of Net Profit?
Hey there! A lot of small business owners put their income under operational. But the reason you hear me say to put the hours you pay yourself for "doing" the work is, technically whether it is you or someone else, it is a cost of goods for that sale. You want it here so you always know what you are spending on the sale. Plus down the road as you hire for folks that will replace you as the "doer" it is already in your cost of goods. Some folks will say, I spend 50% of my time on "doing" and 50% on the operations of the business so they just split it into two lines on the p&l, one under COGS and one under Operational expenses. In the typical P&L for most small business owners, the net income is before they pay taxes. There are some accountants/bookkeepers that will put a tax line in there. I tell folks to keep in mind that your profits will have to pay for your taxes, your retained earnings and any owner's draw. Here is a video I did on your pay and your p&L if interested. ua-cam.com/video/fC2_IZ2VPhI/v-deo.html. hope all this helped. (and didn't make it more confusing. LOL
Great question! Those are the months that you show a "loss". Typically when you have to dip into the retained earnings you kept in the business during the better months. One reason I always preach that profit has 3 jobs: pay taxes, retained earnings you keep in the business and finally an owners draw. Hope this helps - Tammy
Hi there. Most bookkeeping software will have them in reports. I always recommend Quickbooks (babolearning.com/quickbooks) They make it very easy to get your report. If you don't use a bookkeeping report, you will have to build your own, unfortunately. - Tammy
How does this work for a physical therapy clinic? I need a P and L done for three years to valuate my business as I want to sell...It is expensive to have these done! Thanks
Have you been using Quickbooks or something similar? You should have a P&L that is pretty close but maybe needing some tweaks. Or are you starting from scratch? You can do yourself but it can be time consuming but there are some bookkeepers that charge reasonable amounts that can also help you get it keyed in. - Tammy
Great question. I've seen some bookkeeping systems that put it under Operational expense but I'm not a fan of putting it there.The owners draw comes out of the profits, so the best place would be just after the Net Income. Best way to think of it is, Net Incomes pays owners draw, taxes and the rest you retain in the business. hope that helps - Tammy
Great question. It is just the year to date numbers. Same concept just Jan thru Nov in this particular example. But great feedback to remember for next time. THanks! Tammy
![Дон ДОН, Алаудинов и СБЕЖАВШИЕ из под Курска ахматовцы 😁 [Пародия]](http://i.ytimg.com/vi/dEfCf5IK26Q/mqdefault.jpg)
![Accounting Basics for Small Business Owners [By a CPA]](/img/n.gif)
If Interested in diving deeper. Here is a video where I take a look at a Profit and Loss Statement and What it is Telling Us.... ua-cam.com/video/tldpl71jF5g/v-deo.html
Thanks
TY
I’ve watched a few videos explaining the income statement/ P&L
And you were the only one that clarified labor costs (COGS) vs labor costs (Overheads)
So appreciative, thank you!🙏🏻🙏🏻
I appreciate the feedback. I've noticed a lot of folks lump them together and I just don't think that helps you price correctly and have a true gross margin. - Tammy
I love your videos. They’re so informative and easy to understand.
Ah, thanks! Glad they are helpful! More to come soon! - tammy
This is by far the best P/L video
Ah, thanks! Glad it was helpful! - Tammy
Here is another video on Paying Yourself as a Business Owner on your Profit & Loss if it helps: ua-cam.com/video/fC2_IZ2VPhI/v-deo.html - Tammy
WELL SAID, VERY SIMPLE AND STRAIGHT TO THE POINT..GREAT VIDEO❤💯
thanks!
Thanks for your help, this is one of the best explain videos out there for p&l
Ah, thanks! Glad it was helpful! - Tammy
*What Part of the P&L Gives You the Most Trouble? - Tammy*
Thank you for the simple explanation. I'm so excited to watch more ❤❤
Glad it helped! :-). Tammy
P&L made very clear, thank you for the explanation !
Great to hear! Thanks for the feedback! - Tammy
I'm glad you exclude gross profit which I think it's an unnecessary number in most practical situations.
It has it's time and place, especially if you have smaller units or stores that play into the bigger picture but for most folks, they just need to make sure that number is bigger than their expenses and I have found the it just confuses smaller business owners and they can work around it in most small businesses that don't have a lot of skus
The way you explain is so easy to understand. Doesn’t sound too confusing
Excellent Resource. Thanks for an easy-to-follow guide without dumbing it down.
thank you! - Tammy
U made it seem easy to understand .
Thanks! Glad it helped! - Tammy
Exceptionally explained
Well explained. Thank you so much
glad it helped! - Tammy
@@BadassBusinessOwners big time
Awesome video, quick, efficient and comprehensive.. you're an educator. Nice voice 😊
Ah, thanks! Glad you found it helpful! - Tammy
I absolutely love your explanation opened my eyes.
Ah, thanks! - Tammy
Thank you for this video. Im always asked to give a P/L to my insurance Company and I try to avoid it ALOT lol this has really helped me along with finding the spreadsheet you created as well. FOLLOWING FOR MORE GREAT INFORMATION!
Glad it was helpful! - Tammy
I looked everywhere for a video just like this! Thanks! Subscribed!
glad it was helpful! - Tammy
NAILED IT!! Thank you sssooooooo much.
Thanks!!! :-). - Tammy
My first time watching you videos. Thank you this was great 👍 oh....I love your UA-cam channel name too 💪🏾💯
Ah, thanks! Glad you liked it! Hope you stick around :-). Love to have you join the Badass Team! - Tammy
Very helpful to my Christmas light business!
Awesome. I have heard of folks that make some good money doing those Christmas lights. Especially as they retained clients and get quicker on those homes. Good luck! - Tammy
@@BadassBusinessOwners good money with repeat business and charging premium pricing. Just found you searching P & L on UA-cam. Going into 4th years and really diving into numbers now.
Terrific.. Thanks.
Awesome presentation!!! Thanks
Thanks! Glad it was helpful. - Tammy
Awesome! Thank you!!❤❤❤
Ah thanks
Really interesting thank you
Thanks ❤ very educative
Glad it was helpful! Tammy
Thank you so much!
Thank you!❤
Great video, thanks for sharing your wisdom and knowledge. I’m fuzzy on the COGS section with regard to taxes? What taxes are you referring to that should be in COGS? Is it the prior years taxes on profit? Some clarity would be appreciated. TIA
Great question. Sometimes folks will have payroll taxes, rental tax, stuff like that. So if you pay taxes on other things outside of your federal or state taxes you would capture it there typically. - Tammy
Thanks..❤️
thanks :)
Welcome!
Really good stuff!!!
Glad you think so! :-). - Tammy
Thank you. It was the best one l saw. One question, if you need to prepare them with the monthly bank statements and you have money from the previous month, how do you make these calculations? Does it has to match the endings balance? I need to prepare some and been breaking my head for 3 weeks already. How is it going to match if l cant use the balance of previous month. Thanks in advance
Your Profit & Loss is just a snapshot of a particular time. So if you are doing say last month. You just need the items that came in or went out for that month. Anything prior is part of past months. So you would count all sales from the 1st thru the 30th for example and any bills/money spent. If you take in $1,000 in sales, yet your COGS & Expenses ran $1,200 (so you dipped into past money to pay the bills), then your P&L would just register a $200 loss. - Hope this helps. Tammy
Great presentation! Easy to understand. Thank you. Question: What kind of software can you recommend? I have VERY BASIC knowledge about accounting. I deal with Buying, Mantaining and Renting Real Estate. Thank you, again.
Glad it was helpful! I'm a huge fan of Quickbooks (babolearning.com/quickbooks) . When I had rentals in the past, I also used Quicken for business and property (amzn.to/3tyUgVM) I find they both are helpful. At least they were for me. Tammy
Like for example.
Sales ko po is credit 160,000
Sales dscoutn 1800 & 2100credit
Paano gwin to minus ba ang credit na sales dscount ko po or paano?
Thanks for sharing. It was great to see the statement and numbers to accompany the explanation. I work for myself so i'm directly involved with the creation of the service, however I put my salary in operational expenses because regardless of if i close a client or not, i still need to be paid. For me if i hired another freelance to work on a service that would be COGS right?
I think i may have gotten confused around the Net Profit area, I saw other definitions say it's the Profit after taxes, but i think you say we are paying taxes out of Net Profit?
Hey there! A lot of small business owners put their income under operational. But the reason you hear me say to put the hours you pay yourself for "doing" the work is, technically whether it is you or someone else, it is a cost of goods for that sale. You want it here so you always know what you are spending on the sale. Plus down the road as you hire for folks that will replace you as the "doer" it is already in your cost of goods. Some folks will say, I spend 50% of my time on "doing" and 50% on the operations of the business so they just split it into two lines on the p&l, one under COGS and one under Operational expenses. In the typical P&L for most small business owners, the net income is before they pay taxes. There are some accountants/bookkeepers that will put a tax line in there. I tell folks to keep in mind that your profits will have to pay for your taxes, your retained earnings and any owner's draw. Here is a video I did on your pay and your p&L if interested. ua-cam.com/video/fC2_IZ2VPhI/v-deo.html. hope all this helped. (and didn't make it more confusing. LOL
What happens when purchases are bigger than revenue? How does it affect the income statement
Great question! Those are the months that you show a "loss". Typically when you have to dip into the retained earnings you kept in the business during the better months. One reason I always preach that profit has 3 jobs: pay taxes, retained earnings you keep in the business and finally an owners draw. Hope this helps - Tammy
Is there a software you recommend to create the P&L statement or do we just use spreadsheet? I’m not so good with excel. Maybe templates exist?
Hi there. Most bookkeeping software will have them in reports. I always recommend Quickbooks (babolearning.com/quickbooks) They make it very easy to get your report. If you don't use a bookkeeping report, you will have to build your own, unfortunately. - Tammy
How does this work for a physical therapy clinic? I need a P and L done for three years to valuate my business as I want to sell...It is expensive to have these done! Thanks
Have you been using Quickbooks or something similar? You should have a P&L that is pretty close but maybe needing some tweaks. Or are you starting from scratch? You can do yourself but it can be time consuming but there are some bookkeepers that charge reasonable amounts that can also help you get it keyed in. - Tammy
Where do the owners draw would show, if the owner doesn't get paid by the business? thanks!
Great question. I've seen some bookkeeping systems that put it under Operational expense but I'm not a fan of putting it there.The owners draw comes out of the profits, so the best place would be just after the Net Income. Best way to think of it is, Net Incomes pays owners draw, taxes and the rest you retain in the business. hope that helps - Tammy
Great Video. This is exactly what i was looking for. Do you have the blank template of that profit & loss statement?
I don't think I do, but I'll check in a bit and if not, maybe make one you can use..... Tammy
Here you go. I knew I had it somewhere. LOL. babolearning.com/blankPandL
@@BadassBusinessOwners Sweet. thanks.
What is the column Jan Nov 20 , you don’t say anything about that side
Great question. It is just the year to date numbers. Same concept just Jan thru Nov in this particular example. But great feedback to remember for next time. THanks! Tammy
@@BadassBusinessOwners thank you so much
Hllo pls sinong makaatulong sa akin po mali yung i/s ko po
May want to fix the typo in your owners draw definition.....you said money owner taxes out of the business, not "Takes"
Thanks for the heads up! - Tammy