Oct 1, 2015
Episode 42- P&L (profit and loss)
Today I wanted to give you some
More actionable content that you can immediately implement into you
business. This habit is crucial to creating and maintaining an
organized successful business. Without seeing where you money
is coming from and going to it is virtually impossible to be
successful. I cover a very generalized way that I keep track of my
numbers which helps simplify the business and keep my numbers in
check
By keeping tracking of your revenue you are able to forecast your budgets so you can prepare and plan for slow times of the year or even better yet find ways to increase the revenue stream for that time period.
Here's a fool proof way of keep track!!!!
Get a yellow pad and at the top of the sheet wrote down the Month (I recommend doing this weekly)
Make 3-columns and at the top of each column wrote down its category. First column Income, second expenses ,and third totals.
In the income column right down all your revenue(if some days have multiple sales just do a total for that day). Write down date and total of transaction and at the bottom add it up and write down the total.
In the expense column write down all your expenses. Make sure
you categorize them according to the expense. If it was a purchase
for cost of goods (rent, material, gases, electrical, etc) put a
"M" next to the number. If the expense was an Office Supply (
copy paper, shipping supplies, shipping costs , etc) put an "O"
next to that expense.
In a separate box under these columns make a box for mileage.
Keep track of mileage when making deliveries to and from. Keep a
small ledger in your glove box to make it more convienent and make
it a habit!!!!!!!
At the bottom add up the totals for "O" and "M" and keep them separate but under the totals add them up for a grand total.
So if your income was $5,000 and your total expense was $2,500. You Net profit is $2,500. (This is the number you use to gauge your taxes ). Most tax professionals recommend , depending on tax bracket , that you out away 15-25% of profit for taxes which will go towards your quarterly estimate.
Hope this helps!!
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