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Tech Tip #45: Regularly Review Your Profit & Loss Statement

Knowing your firm’s revenue doesn’t actually determine how well your firm is doing. You need to look at your profit and loss statement (P&L statement), which takes into account both your revenue and expenses. Regularly checking your firm’s profit and loss statement will allow you to be more proactive with reducing expenses and increasing revenue-generators. Below are a few action-oriented insights you can gain from your P&L statement:

  • Staffing is too expensive. Replace certain roles with virtual help or freelancers.
  • Rent is too expensive. Look into working remotely or renting a co-working space.
  • Marketing ads are bringing in a lot of valuable clients. Double down on ad expenses.
  • Many invoices are overdue. Invest in a platform that offers automated invoicing, reminders and collections. 

Overall, we recommend you look at your P&L statement on a monthly basis to avoid letting your expenses get too bloated or missing out on revenue-generating opportunities.

Learn more about what a profit and loss statement looks like and includes.

CosmoLex Team

CosmoLex is a leading legal practice management solution that is trusted by thousands of law firms across North America. CosmoLex is a single solution that lets solo legal professionals & small law firms manage their practice, billing, AND accounting all in one login, on any device, at any time. CosmoLex users can eliminate the need to maintain multiple programs because CosmoLex does it all -- including time & expense tracking, billing, business accounting, trust (IOLTA) accounting, calendaring, task, email & document management, even secure client communications -- in one web-based application.