What is a profit and loss statement? It tells you how much revenue (commissions) you bring in. It tells you how much money you spend on expenses. It tells you how much money you will bring home (profit.)
If maintained correctly, it is a snapshot of your financial health you can access at any time to understand what is happening with your money. It will tell you how you can make more money by either increasing your income or reducing your expenses. Operating a business without it is like driving a car with a blindfold on. Given you are self-employed, YOU ARE THE BUSINESS. You are an entrepreneur and the only way to be a better one is to understand your finances and your P&L is a great place to start.
How does it work?
Gross income (Revenue) = Commissions, W-2 Income, other revenues
- (minus) Cost of goods sold (COGS) = commission splits and other brokerage fees
= Gross Profit = Profit before operating expenses
- (minus) Operating Expenses = meals, gas, general marketing, CPA fees, office rent, etc
Net Profit = How much you take home
Maintaining a P&L statement can be tedious and time consuming. In order for it to be accurate and useful, it has to be up to date at all times. Symba will do all of this for you! At all times, you can open Symba and see how much money you are making and what your expenses are.
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