Why profit and loss reports are important

Profit and loss reports are used by Swindon Accountants and business owners to see the income and expenditure of a business and how well it is performing. Swindon based accountants Chippendale and Clark will use this report on a regular basis to help inform their clients of how well the business is doing and to highlight whether the businesses are reporting a profit or a loss on a monthly, quarterly and yearly basis.

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A profit and loss report is also known as an income statement as it shows the money that has been received and the money that has been spent or lost during a given time period. For some businesses, it might be appropriate to view their profit and loss on a monthly basis or perhaps a quarterly or annual one. This of course will depend very much on the size of your business and the level of reporting that you require for your business financial information.

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By regularly reviewing this information you will also be able to see whether there are opportunities for you to grow your business offering as well as highlight areas where you might want to look at reducing costs. It is often the profit and loss that highlights businesses where there may be a need to have a conversation with suppliers or switch to cheaper alternatives.

If you are unsure how to pull a profit and loss report or to interpret the information that it gives you, it is a good idea to ask your accountant to give you a quick run-through.