Profit and Loss (P&L) Report

 

Profit and Loss (P&L) Reporting

The Budget Report can also be used as a Profit and Loss Report (generally referenced as the P&L Report) when you enter budgeted amounts and expenses for all Account Categories including Card processing fees, loan interests, depreciation of equipment, amortization, and EBITDA margin, in your Budget.

P&L Reports are more accurate than a Budget Report when tracking cash flow metrics.

Below are a few terms to help identify the differences between a Budget and a P&L report:

  • Profit - defined as the revenue including all Net sales and Service Fees

  • Loss - defined as all expenses including all Total Cost in COGS, payroll, rent, advertising, etc.

  • EBITDA margins report the revenue prior to deducting your loan interest, taxes, depreciation, and amortization. EBITDA is a proxy for a company's current operating profitability.

  • Amortization defined as an accounting technique used to periodically lower the book value of a loan or intangible asset over a set period of time. In relation to a loan, amortization focuses on spreading out loan payments over time. When applied to an asset, amortization is similar to depreciation.

  • Depreciation - defined as the process of deducting the total cost of something expensive you bought for your business. For example, the IRS might require that a piece of computer equipment be depreciated for five years, but if you know it will be useless in three years, you can depreciate the equipment over a shorter time.

Some clients will opt to build their P&L directly from their accounting platforms, such as Sage or Quickbooks. This is because all AP and AR journal entries are typically tracked there and the P&L is a preloaded reporting option that does not require you to build it.

If you want to build your P&L in Decision Logic, this can be done by converting the Budget report. Please reach out to your Account Manager to discuss how to build a P&L Report versus a Budget Report.

Typically bank loans applications and IRS audits will require a P&L report, and they will not require a budget report.

Table of Contents

For additional questions or assistance, please submit a support ticket by visiting the Decision Logic Service Center.

 

 

 

 

Unable to access this feature in the Decision Logic platform?

  • Contact your Decision Logic Administrator to make Scope and Security adjustments to your user profile and/or add new features.

  • Some features are client-specific.