Profit Soup Podcast

Talking About Income Statements

Episode Summary

Beyond sales and profit, the income statement (P&L or Profit and Loss) provides insights into productivity, expense management, pricing, labor costs and more. Are you learning all you could from your P&L? Listen for insights and financial review routines every business owner needs.

Episode Notes

• The Income Statement is also known as the Profit and Loss (P&L) Statement—it shows how your business performs financially over time.
• It focuses on sales, expenses, and profit—usually over a month, quarter, or year.
• Your Chart of Accounts is the backbone of your financial tracking system—it defines how transactions are categorized and reported.
• Organize your Chart of Accounts by functional areas (e.g., operations, marketing, admin) to better assess cost efficiency.
• Payroll should be broken down by function (direct labor, sales, admin) rather than lumped into one total—this helps clarify where your people costs are going.
• Involve a CPA early in your business setup to ensure your systems provide accurate, useful info for both decisions and tax filing.