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.