Profit and Loss Statement Template (With a Filled Example)
Here is the template. Select it, copy it, paste it into Excel or Google Sheets, and overwrite the zeros with your own numbers. There is nothing to download and no form to fill in — the tables on this page are the whole thing.
The profit and loss statement template
| Line item | Amount | What goes here |
|---|---|---|
| Revenue | ||
| Sales — primary product or service | $0.00 | Your main source of income |
| Sales — secondary line | $0.00 | A second product, retainer, or service line |
| Other income | $0.00 | Anything earned in the ordinary course of business |
| Total revenue | $0.00 | Sum of the three lines above |
| Cost of goods sold | ||
| Materials and inventory purchased | $0.00 | What the thing you sold cost you |
| Direct labor and subcontractors | $0.00 | People paid to deliver the specific work sold |
| Freight, shipping, and merchant fees | $0.00 | Costs that scale with each sale |
| Total cost of goods sold | $0.00 | Sum of the three lines above |
| Gross profit | $0.00 | Total revenue − total COGS |
| Operating expenses | ||
| Salaries and wages | $0.00 | Staff not tied to delivering a specific sale |
| Payroll taxes and benefits | $0.00 | Employer taxes, health insurance, retirement match |
| Rent and utilities | $0.00 | Premises |
| Software and subscriptions | $0.00 | Tools the business runs on |
| Marketing and advertising | $0.00 | Ads, content, events, agency fees |
| Professional fees | $0.00 | Legal, accounting, consulting |
| Insurance | $0.00 | Liability, E&O, property |
| Office supplies | $0.00 | Consumables |
| Travel and meals | $0.00 | Non-billable travel only |
| Bank and payment processing fees | $0.00 | If not already in COGS |
| Training and development | $0.00 | Courses, licenses, conferences |
| Telephone and internet | $0.00 | Connectivity |
| Depreciation and amortization | $0.00 | Non-cash write-down of assets you own |
| Repairs and maintenance | $0.00 | Upkeep of equipment and premises |
| Total operating expenses | $0.00 | Sum of the fourteen lines above |
| Operating income | $0.00 | Gross profit − total operating expenses |
| Other income and expense | ||
| Interest income | $0.00 | Interest earned |
| Interest expense | $0.00 | Enter as a positive number; the formula subtracts it |
| Other income / (expense) | $0.00 | Gains or losses outside normal operations |
| Total other income and (expense) | $0.00 | Interest income − interest expense + other |
| Net income before tax | $0.00 | Operating income + total other income and (expense) |
| Income tax | $0.00 | Entity-level tax, where your structure pays it |
| Net income | $0.00 | Net income before tax − income tax |
Paste it whole, add the formulas in the next section, and only then delete the lines you don't use — that way the subtotals adjust themselves as you cut. When you add a line later, add it inside a section rather than directly above or below a subtotal, so the sum range stretches to include it. Put the period the statement covers at the top — "Month ended June 30, 2026" or "Year ended December 31, 2025" — and be strict about it. A P&L that quietly mixes periods is worse than no P&L.
How do I build this in Excel or Google Sheets?
Paste the table with the header on row 1 and line items in column A, amounts in column B. The rows then land exactly where these formulas expect them:
| Cell | Formula |
|---|---|
| B6 — Total revenue | =SUM(B3:B5) |
| B11 — Total cost of goods sold | =SUM(B8:B10) |
| B12 — Gross profit | =B6-B11 |
| B28 — Total operating expenses | =SUM(B14:B27) |
| B29 — Operating income | =B12-B28 |
| B34 — Total other income and (expense) | =B31-B32+B33 |
| B35 — Net income before tax | =B29+B34 |
| B37 — Net income | =B35-B36 |
Stated in plain English, so you can rebuild it anywhere:
- Total revenue = all sales, less returns, refunds, and discounts
- Gross profit = total revenue − cost of goods sold
- Operating income = gross profit − total operating expenses
- Net income before tax = operating income + other income − other expense
- Net income = net income before tax − income tax
- Gross margin % = gross profit ÷ total revenue
- Operating margin % = operating income ÷ total revenue
- Net margin % = net income ÷ total revenue
Two formatting habits worth the thirty seconds: format column B as accounting so negatives show in parentheses, and format the three margin cells as percentages rather than typing "%" into the text.
A filled example: small service business
This is a consulting firm with six people, a full year of trading, and no inventory. Every subtotal below is calculated, not asserted.
Meridian Consulting LLC — Year ended December 31, 2025
| Line item | Amount |
|---|---|
| Revenue | |
| Consulting fees | $620,000 |
| Managed service retainers | $180,000 |
| Training workshops | $32,000 |
| Total revenue | $832,000 |
| Cost of goods sold | |
| Subcontractor fees | $96,000 |
| Project-specific software licenses | $18,000 |
| Billable project travel | $14,000 |
| Total cost of goods sold | $128,000 |
| Gross profit | $704,000 |
| Operating expenses | |
| Salaries and wages | $360,000 |
| Payroll taxes and benefits | $68,000 |
| Rent and utilities | $42,000 |
| Software and subscriptions | $21,600 |
| Marketing and advertising | $30,000 |
| Professional fees | $12,400 |
| Insurance | $9,800 |
| Office supplies | $3,600 |
| Travel and meals (non-billable) | $7,200 |
| Bank and payment processing fees | $5,400 |
| Training and development | $4,800 |
| Telephone and internet | $3,000 |
| Depreciation and amortization | $6,500 |
| Repairs and maintenance | $2,700 |
| Total operating expenses | $577,000 |
| Operating income | $127,000 |
| Other income and expense | |
| Interest income | $1,200 |
| Interest expense | $4,700 |
| Total other income and (expense) | ($3,500) |
| Net income before tax | $123,500 |
| Income tax | $24,700 |
| Net income | $98,800 |
Gross margin is 84.6%, operating margin is 15.3%, and net margin is 11.9%. Those three numbers are the point of the exercise — see below for what to do with them.
How do I adapt this to my business?
Product businesses. COGS is where the story is, and it has to include everything that varies with a unit sold: materials, inbound freight, packaging, payment processing, and fulfillment. Your gross margin will land far lower than the service example above — often 30–50% — and that is normal. What is not normal is a gross margin that moves several points month to month, which almost always means inventory is being counted wrong rather than that your costs really swung.
Service businesses. COGS may be small or empty, and that is fine. The line that decides your year is payroll. Split it deliberately: people whose time is billed to clients belong in COGS as direct labor, and everyone else belongs in operating expenses. Do it consistently or your gross margin becomes meaningless.
Agencies and anyone with pass-through costs. Media spend, print buys, and contractor costs you rebill are the trap. If you bill a client $50,000 and $35,000 of it is ad spend you hand straight to a platform, showing $50,000 of revenue makes you look three times bigger than you are. Report the pass-through in revenue and in COGS so the gross profit line shows the $15,000 you actually kept — and track that figure, not top-line revenue, as the number that has to grow.
How do I read a P&L once it's built?
Gross margin percentage tells you whether the work itself is profitable. Calculate it every month. If it drifts down, you are either underpricing, paying more for delivery, or mixing your sales toward lower-margin work. Fixing it is a pricing or delivery conversation, and no amount of expense cutting substitutes.
Operating margin tells you whether the business around the work is affordable. A healthy gross margin with a thin operating margin means overhead has outgrown the revenue supporting it.
Month-over-month trend beats any single month. Put twelve months side by side in one sheet, one column per month, and read across each row. A single month tells you almost nothing — annual insurance premiums, quarterly tax payments, and seasonal revenue all make individual months look alarming for no reason. The trend line is where the real signal lives.
Compare against your own history before you compare against anyone else's. Published industry benchmarks are built from companies that classify costs differently than you do, so a gap between your gross margin and a benchmark usually says more about the chart of accounts than about the business. Your own figures from six months ago were produced by the same rules, which makes them the only fully honest comparison you have. Once you have twelve consistent months, one habit does most of the work: each month, find the two lines that moved most against the prior month and write down why. If you can't answer, that is the thing worth investigating — not the bottom line.
The mistakes that make a P&L useless
Owner draws booked as an expense. Money an owner takes out of a pass-through entity is a distribution against equity, not an expense. Booking it as one understates profit, distorts every margin on the page, and produces a tax return that disagrees with your own statements. Owner salary through payroll is an expense; a transfer to a personal account is not.
Personal spending mixed in. One card used for both business and personal costs means every operating expense line is fiction, and it will take a bookkeeper hours of billable time to separate later. A dedicated business account is the highest return-on-effort change most small businesses can make.
COGS and operating expenses confused. COGS is what varies with what you sold. Operating expenses are what you'd pay in a month you sold nothing. Put your rent in COGS and gross margin stops meaning anything; put your direct materials in operating expenses and you can no longer tell whether your pricing works.
No monthly comparison. A P&L produced once a year, in March, for the year that ended in December, is a compliance document. It cannot tell you anything you can still act on. Monthly is the minimum useful cadence.
Cash and accrual mixed. Pick one basis and stay on it. Recording revenue when invoiced but expenses when paid produces a profit figure that matches nothing.
When to hand it over
A template gets you a statement. It does not get you a statement you can trust without checking, and the difference is reconciliation — proving the numbers against your bank and card accounts every month. That is what monthly bookkeeping services buy you, and it is the point at which most owners stop maintaining the spreadsheet themselves.
If you want someone local to own the monthly close, browse bookkeepers for small businesses near you. For the concepts behind the format — what each section means and how the P&L relates to your balance sheet and cash flow statement — see our longer guide to the profit and loss statement.
Method
1,507 of the firms in our directory list financial statement preparation as a service. That figure comes from the AccountingNearYou dataset as of 13 August 2026: 13,986 US accounting firms profiled from their own public websites, counted as offering the service if they name it on the pages we crawled. Firms that prepare statements without advertising it are not counted, so treat it as a floor.
This guide is general information about a reporting format, not tax or accounting advice for your situation. How you classify a specific cost, and what tax belongs on the bottom line, depends on your entity type and your state.