How to Create a Profit and Loss Statement in Google Sheets

Published: December 8, 2023 - 3 min read

Julian Alvarado

Creating a profit and loss statement in Google Sheets is more than a financial chore; it’s a strategic tool for business owners to track their financial performance.

It helps companies lay out income, expenses, and profit or loss over a specific period. Understanding the nuances of a profit and loss statement empowers you to make informed decisions for sustainable growth.

In this tutorial, we’ll navigate through the steps to craft a comprehensive profit and loss statement tailored for business operations teams in B2B SaaS companies.

Understanding Profit and Loss Statement

A Profit and Loss (P&L) statement, also known as an Income Statement, is a financial report that summarizes a company’s revenues, expenses, and profits or losses over a specific period. It helps businesses track their performance and make informed decisions.

Importance of Profit and Loss Statement

A well-organized P&L statement is essential for various reasons:

  • Financial management: It allows business owners to monitor their company’s finances and identify areas where they can cut costs or increase revenue.
  • Decision making: P&L statements provide valuable insights for making critical decisions regarding expansions, investments, and budget allocation.
  • Tax reporting: Companies need a comprehensive P&L statement for accurately filing taxes and ensuring compliance with legal requirements.
  • Stakeholder communication: Investors, lenders, and other stakeholders rely on P&L statements to understand the financial health of a business.

Key Elements of a Profit and Loss Statement

A standard P&L statement includes:

  • Revenues: All income from sales, services, or investments.
  • Expenses: Costs incurred, split into:
    • Direct Costs (COGS): Directly linked to product/service production.
    • Indirect Costs: General business expenses like rent and marketing.
  • Net Income: The final profit or loss, calculated as Total Revenues – Total Expenses.
Example table showing key elements of a profit and loss statement in Google Sheets.

Creating a Profit and Loss Statement in Google Sheets

Setting Up Your Google Sheets

  • Open a new Google Sheet or use a template.
  • Input Basic Information: Business name, address, and the statement period at the top.
  • Create Income and Expenses Sections: Customize categories relevant to your business.
Creating a Profit and Loss Statement in Google Sheets

Inputting Income and Expenses

  • In the Income section, list all revenue sources. Use separate rows for clarity.
  • In the Expenses section, detail all business costs.
 Detailed income and expenses sections in a Google Sheets profit and loss statement.

Calculating Net Profit or Loss

Calculating the net profit or loss is an essential part of creating a profit and loss statement. Subtract the total expenses from the total income to determine your company’s net profit or loss.

spreadsheet ai
Free AI-Powered Tools Right Within Your Spreadsheet

Supercharge your spreadsheets with GPT-powered AI tools for building formulas, charts, pivots, SQL and more. Simple prompts for automatic generation.

In Google Sheets, use formulas to calculate the totals for both sections and the net profit or loss. In this example:

  • Total Income: =SUM(C2:C3)
  • Total Expenses: =SUM(C5:C6)
  • Net Profit or Loss: =C4 – C7
Calculating net profit or loss in a Google Sheets profit and loss statement.

Conclusion

By mastering the creation of a profit and loss statement in Google Sheets, you can make well-informed financial decisions for your business.

Don’t forget to install Coefficient for seamless integration of live data into your spreadsheets, elevating your business

Sync Live Data into Your Spreadsheet

Connect Google Sheets or Excel to your business systems, import your data, and set it on a refresh schedule.

Try the Spreadsheet Automation Tool Over 350,000 Professionals are Raving About

Tired of spending endless hours manually pushing and pulling data into Google Sheets? Say goodbye to repetitive tasks and hello to efficiency with Coefficient, the leading spreadsheet automation tool trusted by over 350,000 professionals worldwide.

Sync data from your CRM, database, ads platforms, and more into Google Sheets in just a few clicks. Set it on a refresh schedule. And, use AI to write formulas and SQL, or build charts and pivots.

Julian Alvarado Content Marketing
Julian is a dynamic B2B marketer with 8+ years of experience creating full-funnel marketing journeys, leveraging an analytical background in biological sciences to examine customer needs.
350,000+ happy users
Wait, there's more!
Connect any system to Google Sheets in just seconds.
Get Started Free

Trusted By Over 20,000 Companies