How Long Should My P&L Be?
The answer is simple, not long.
Why?
Because if it gets too long, it loses its meaning and becomes too hard to decipher.
I like a 1 page P&L.
Like almost all entrepreneurs, I don’t have endless time to study financial reports. I want to look at my P&L and quickly know whether things are moving in the right or wrong direction.
If things aren’t going well, and I need to dig into the numbers more, I can easily dial down into the details of any P&L line item and figure out where the problem is. I don’t need the detail on the face of the P&L.
Some people think by adding my account and line items, making their P&L longer and longer, they are getting more and better info. Instead, what they are getting is a meaningless, jumble of numbers that tells them very little.
All I want from a P&L is to initially tell me whether I am making money or not.
03/09/2020
By: Gary Grottke, CPA, Quality Back Office LLC