Why Profit & Loss Matters

Profit really does matter in business. Unless a business is making a cash profit it will ultimately fail.

By cash profit, it means cash actually received in the bank account of a business from revenue that generates a profit for that business.

This is very different from accrued profit, which is the revenue that has been billed to a client but they have not yet paid the invoice. Without cash profits, a business will ultimately fail.

A Profit and Loss Statement is a key management tool for any business. A Profit and Loss Statement shows the revenue generated for a set period of time together with expenditure incurred in that same period for producing that revenue and also running the business.

A Profit and Loss Statement shows if a business is profitable and forms part of the annual statutory accounts, which also includes a Balance Sheet. A Balance Sheet is a snapshot in time meaning it is prepared at a particular date is basically a statement of assets and liabilities for a business as at that given date.

The profit and loss position of a business needs to be monitored regularly and carefully managed as the competitive landscape in which it operates and wider economic climate is constantly changing which means that a business that is making profit one day, may not be necessarily doing so the next.

Now the big question to answer is – Is your Business Profit–Friendly?

It’s really easy to find out. Simply enter your details in the opt in box in the side bar of this blog and we will sent you details immediately of how you can take your FREE test (Valued at $37) and get your results instantly.

Profit in Focus - More Profit in Less Time with Less Stress