Profit and loss (P&L) management is the process of determining how to cut costs and increase revenue. You can start that process by looking at your business’s profit and loss statement (aka income statement). Since your income statement breaks down your business’s costs and gains, it offers key insights into growing your revenue and upping your business’s chance of success.
If you already understand profit and loss and simply want to generate a P&L statement, check out our article on how to prepare a P&L statement by hand. But if you want to know more about how exactly a business income statement can help you manage profit and loss, keep reading—we explore the meaning of profit and loss, how to read a profit and loss report, and why P&L management is so important to small businesses.