Prepare a quick profit and loss statement

You are applying for a loan and your bank has requested profit and loss statement (P&L). Or your accountant wants to lodge your tax returns and is in need of your P&L. What is it?

A profit and loss statement (P&L) is a financial statement that summarizes the income and expenses incurred during a specific period of time, usually a fiscal quarter or year.

In Manager, there are two ways to get P&L out. The “dirty” way assumes you already know the final figures and “clean” way means you don’t know the figures so you will enter all transactions within a period individually and let Manager sum them up for you.

Create a business

Click Add Business button then Create New Business, enter your business name and click Add Business button.

Your business should be successfully created.

Normally at this point we would click on Customize to add new tabs but if all you want is to generate a P&L statement and you know the figures (dirty way), we don’t have to enable any additional features as we have all we need.

Record a journal entry

Let’s say we need to generate P&L for December 31, 2016. If you know your figures, go to Journal Entries tab and click New Journal Entry button.

Then enter your figures for all applicable Income and Expense accounts. Income figures always go to Credit column and expense figures go to Debit column. Also, make sure to set the date to 31/12/2016.

Normally all journal entries must balance to adhere to rules of double-entry accounting principles. Since we only want to generate P&L statement, we can relax rules a bit for now.

Once you are done, click Create button.

Generate Profit & Loss statement

Once your journal entry is saved, go to Reports tab.

Then click Profit and Loss Statement

And finally New Report button.

Here you will need to enter period for which your P&L is for. Let’s say the income and expense figures you have entered in journal entry cover the whole year 2016. Your period should be set to be from January 1, 2016 until December 31, 2016. Optionally you can also set column name to FY 2016 which is abbreviation for Financial Year 2016.

After you click Create, you will be able to view your newly-created report.

So there you go. Quick & dirty way to generate professional-looking P&L for your bank or an accountant.

Make a Comparative P&L

Your P&L will look even more trustworthy if you make it show multiple periods side-by-side. For example, we can show FY 2015 figures next to FY 2016 figures. In order to do that, record another journal entry which will capture income & expense figures for FY 2015. The journal entry should be dated as at December 31, 2015.

Then edit this P&L report to add comparative period by clicking on Add comparative column button. Then enter period details for FY 2015.

Click Update button to view new P&L.

As you can see, now you have two periods side-by-side which looks much better. You can keep going to add as many periods as you like.

Create a Multi-step P&L

Manager also supports custom income & expense groups, sub-groups (unlimited levels) and custom totals which can cater for entities with more complex layout requirements. If you want your P&L to show gross profit, operating profit, net profit before income tax in addition to custom sub-groups, you can re-organize your Chart of Accounts to reflect your business requirements with ease. Your end result could look like this:

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