FREE PROFIT AND LOSS TEMPLATE
Free profit and loss statement template — one page, in Excel, Word and PDF
A P&L template a trade owner can fill in once a month, with a worked example for a business that just put someone on the payroll, every line explained, an expense report that feeds it, and an honest word about what Zarla does and doesn't do here.
Excel, Word and PDF · Free · No email, no sign-up
The short answer
A profit and loss statement (a P&L, or an income statement) shows what the business earned over a period, what it spent, and what was left. Four blocks: income; the cost of sales — what the jobs themselves cost in materials, subcontractors and rentals; operating expenses — the cost of being open, from wages to insurance to the van; and net profit, which is what's left when the last block comes off the first.
The first hire is when a P&L stops being optional. Before Jordan, Sam's profit was whatever was in the account at the end of the month. Now there's a wages line — $3,430.00 of the $4,910.00 in expenses in the example — and the question every month is whether the extra jobs it makes possible cover it. The statement answers that in one page.
Fill it in monthly, from the invoices (income), the receipts and bank statement (expenses), and the timesheets (wages). Twenty minutes, the first week of the month, for the month before.
FREE TEMPLATE · EXCEL, WORD AND PDF
The one-page profit and loss statement, ready to fill in
Income at the top, what the jobs cost next, the cost of being open after that, and what's left at the bottom — one line per category, the same categories your tax return uses. Free as a spreadsheet that adds itself up, and in Word and PDF.
Template · replace the [brackets]
PROFIT AND LOSS STATEMENT
Income at the top, what the jobs cost you next, the cost of being open after that, and what's left at the bottom. One line per category — the same categories your tax return uses.
1. Income
| Line | Amount |
|---|---|
| Sales — labor and services | |
| Materials and parts billed to customers | |
| Other income (tips, rebates, interest) | |
| Total income |
2. Cost of sales — what the jobs themselves cost
| Line | Amount |
|---|---|
| Paint, parts and materials | |
| Subcontractors | |
| Equipment rental, permits, dump fees | |
| Total cost of sales | |
| Gross profit (total income − cost of sales) |
3. Operating expenses — the cost of being open
| Line | Amount |
|---|---|
| Wages and payroll taxes | |
| Insurance | |
| Vehicle, fuel and repairs | |
| Tools and small equipment | |
| Advertising and website | |
| Phone and software | |
| Rent or storage | |
| Accountant, bank and card fees | |
| Licenses and training | |
| Other | |
| Total operating expenses |
4. Net profit
Owner's draw — the money a sole proprietor pays themselves — is not an expense on a profit and loss statement; it comes out of net profit. Wages you pay employees are an expense.
| Line | Amount |
|---|---|
| Net profit (gross profit − operating expenses) |
The spreadsheet is a standard .xlsx: open it in Excel, Numbers or LibreOffice, or upload it to Google Sheets (File → Import) — the totals are formulas and work themselves out.
The income lines start with being found
Start your website — the top line is the one you can grow
Add what you do, your town and your business name, and Zarla builds the site from that one line, with a page for each service and town you list. Every other line on the statement is a cost; the first one is the jobs the website brings.
Already have a website? Bring it across →Zarla keeps your old page addresses where it can and redirects the ones that change, helping you keep the Google standing you've built.
WORKED EXAMPLE
The same statement, filled in
Harbor Coat Painting, a fictional business, in its first month with an employee on the payroll. Income of $17,160.00, a gross profit of $14,940.00 after the materials and rentals, and $10,030.00 left after wages, insurance, the van and the rest — a 58% net margin. Every figure is an example, worked out from the lines.
Example · fictional business
PROFIT AND LOSS STATEMENT
Harbor Coat Painting's first month with an employee on the payroll. Income at the top, what the jobs cost next, the cost of being open after that, and what's left at the bottom.
1. Income
| Line | Amount |
|---|---|
| Sales — labor and services | $14,850.00 |
| Materials and parts billed to customers | $2,310.00 |
| Other income (tips, rebates, interest) | $0.00 |
| Total income | $17,160.00 |
2. Cost of sales — what the jobs themselves cost
| Line | Amount |
|---|---|
| Paint, parts and materials | $1,980.00 |
| Subcontractors | $0.00 |
| Equipment rental, permits, dump fees | $240.00 |
| Total cost of sales | $2,220.00 |
| Gross profit (total income − cost of sales) | $14,940.00 |
3. Operating expenses — the cost of being open
| Line | Amount |
|---|---|
| Wages and payroll taxes | $3,430.00 |
| Insurance | $285.00 |
| Vehicle, fuel and repairs | $640.00 |
| Tools and small equipment | $190.00 |
| Advertising and website | $150.00 |
| Phone and software | $95.00 |
| Rent or storage | $0.00 |
| Accountant, bank and card fees | $120.00 |
| Licenses and training | $0.00 |
| Other | $0.00 |
| Total operating expenses | $4,910.00 |
4. Net profit
Owner's draw — the money a sole proprietor pays themselves — is not an expense on a profit and loss statement; it comes out of net profit. Wages you pay employees are an expense.
| Line | Amount |
|---|---|
| Net profit (gross profit − operating expenses) | $10,030.00 |
Every figure is an example, not a benchmark. The point is the shape: the wages line is new this month, and the statement shows exactly what it did to the bottom line.
LINE BY LINE
What goes on a profit and loss statement
Every block on the template, and what to put in it.
| The line | What to put there |
|---|---|
| Business, period, prepared, basis | The month or quarter it covers, when you drew it up, and whether you're counting cash (money that actually arrived and left — right for a small trade) or accrual (what you invoiced and were billed, whether or not it's been paid). |
| Income — sales, labor and services | What you billed customers for the work itself. From the invoices you sent in the period; with cash accounting, the ones that were paid. |
| Income — materials and parts billed | What you billed customers for materials, on its own line, so you can see your markup against the cost-of-sales line below. In the US, keep the sales tax you collected out of income — it isn't yours. |
| Other income | Rebates, tips, interest on the account. Usually small; keep it separate so the sales lines stay honest. |
| Cost of sales | What the jobs themselves cost: paint, parts and materials; subcontractors; equipment rental, permits, dump fees. If you'd had no jobs, these would be zero — that's the test for this block. |
| Gross profit | Total income minus cost of sales — what the work earned before the cost of being open. Gross profit divided by income is the gross margin; for a trade that's the number that says whether your pricing is right. |
| Operating expenses | The cost of being open whether or not you had a job that week: wages and payroll taxes, insurance, the vehicle, tools, advertising and the website, phone and software, rent, the accountant and the bank, licenses and training. One line each, every month, so the trend shows. |
| Net profit | Gross profit minus operating expenses — what's left. In the example, $10,030.00 on $17,160.00 of income, a 58% net margin. Owner's draw comes out of this; it isn't an expense. |
| Taxes and the forms | In the US, a sole proprietor reports the business's income and expenses on Schedule C with their personal return, and the IRS says to keep the records behind it generally for three years from filing (six if income was under-reported by more than a quarter, and employment-tax records at least four years). An LLC taxed as a partnership or corporation files differently, and the categories on this sheet still line up. In Australia the same statement works for a GST-registered business, and in the UK for a VAT-registered one. In the UK and Australia alike, the tax you collect isn't income — ask your accountant how to show it. Confirm the details with your accountant. |
STEP BY STEP
How to make a profit and loss statement
Twenty minutes in the first week of the month, for the month before.
Pick the period and the basis
A calendar month, cash basis. Write both at the top and don't change them — a P&L is only useful when this month lines up with last month.
Add up the income from the invoices
Every invoice paid in the month: labor on one line, materials billed on another. Sales tax you collected stays out.
Add up the cost of the jobs
Materials, subcontractors, rentals, permits, dump fees — from the receipts and the expense reports, by category.
Add up the cost of being open
Wages from the timesheets, payroll taxes, insurance, the van, tools, advertising, phone, rent, fees. The bank statement is the checklist.
Work out gross and net profit
Income minus cost of sales is gross profit; minus operating expenses is net profit. The spreadsheet does both, and the two margins.
Compare it with last month and act on one line
Margin down? Look at the materials line against what you billed for materials. Net profit down with income up? Look at the wages line against the hours on the timesheets.
Reading your P&L: what the lines are telling you
Gross margin is your pricing. In the example, $14,940.00 of gross profit on $17,160.00 of income is a 87% gross margin: the jobs themselves are priced well. If the materials you billed are less than the materials you bought, you're giving materials away — the two lines sit on the same page so you can see it.
Net margin is your overhead. $10,030.00 left from $17,160.00 is a 58% net margin. The gap between the two margins is the cost of being open — and after a first hire, most of it is the wages line. The question isn't whether wages are high; it's whether the income line grew by more than the wages line did.
Owner's draw isn't an expense. As a sole proprietor, what you pay yourself comes out of net profit; it doesn't go on the statement. Wages you pay employees do. If net profit is less than you need to live on, that's the number to fix — not by moving your pay to the expense lines.
Cash or accrual. Cash basis counts money when it moves; accrual counts invoices when you send them and bills when you get them. A small trade is usually fine on cash — it's what the bank statement shows — but say which one you used, and stick to it.
Taxes. In the US, a sole proprietor reports the business's income and expenses on Schedule C with their personal return, and the IRS says to keep the records behind it generally for three years from filing (six if income was under-reported by more than a quarter, and employment-tax records at least four years). An LLC taxed as a partnership or corporation files differently, and the categories on this sheet still line up. In Australia the same statement works for a GST-registered business, and in the UK for a VAT-registered one. In the UK and Australia alike, the tax you collect isn't income — ask your accountant how to show it. Confirm the details with your accountant.
EXPENSE REPORT TEMPLATE
The expense report that feeds the P&L
One line per receipt — date, who you paid, what for, the category, the job and the amount — in the same categories as the statement, so a month of reports adds straight into it. For your own receipts, and for the crew member who bought the caulk on the way in.
Template · replace the [brackets]
EXPENSE REPORT
One line per receipt. The categories are the same lines as the profit and loss statement, so a month of these adds straight into it.
1. Expenses
| Date | Paid to | What for | Category | Job | Amount | Receipt? |
|---|---|---|---|---|---|---|
2. Total
Categories: Materials · Fuel and vehicle · Tools and equipment · Supplies · Parking and tolls · Meals while traveling · Advertising · Phone and software · Other. Staple or photograph the receipts.
Total this report: ____________________________
Of which to reimburse: ____________________________
Submitted by
Name: ____________________________
Signature: ____________________________
Date: ____________________________
Approved by
Name: ____________________________
Signature: ____________________________
Date: ____________________________
What Zarla does here — and doesn't
Zarla has invoicing, not bookkeeping. The invoice tool keeps every invoice you've sent and marks the ones that are paid — which is the income side of this statement: what you billed for labor, what you billed for materials, what's actually come in. It doesn't track your expenses, run payroll or produce a profit and loss statement, and we're not going to pretend it does.
For the expense side you have the receipts, the bank statement and the expense report above; for the statement itself, this template once a month is enough for a one-crew business, and bookkeeping software or your accountant takes over when the lines multiply. The habit that matters is the monthly one: a P&L you look at every month is a business you can steer. The invoice guide covers the top line in detail.
The rest of the crew pack: the timesheet is where the wages line comes from, and the crew schedule is where next month's income is planned.
Profit and loss statements: common questions
Yes. The P&L template downloads free as an Excel spreadsheet (Google Sheets imports it), a Word document and a PDF, and the expense report as Word and PDF — no email address, no sign-up.
Nothing — they're two names for the same statement. Accountants say income statement; small businesses say P&L. A balance sheet is different: it's a snapshot of what you own and owe on one day, not what you earned over a period.
Gross profit is income minus what the jobs themselves cost (materials, subcontractors, rentals). Net profit is gross profit minus the cost of being open (wages, insurance, the van, the phone). Gross profit tells you about your pricing; net profit tells you about your overhead.
Not for a sole proprietor — what you pay yourself comes out of net profit and doesn't appear on the statement. Wages you pay employees, and the payroll taxes on them, are expenses. If your business is a corporation that pays you a salary, that salary is a wage line; ask your accountant which applies to you.
For a one-crew trade, cash: income when the customer pays, expenses when you pay. It matches the bank statement and it's what most sole proprietors file on. Accrual counts invoices and bills when they're issued, and matters once customers pay you weeks later or you carry a lot of stock. Write which one you used at the top.
Monthly, in the first week of the month for the month before — twenty minutes with the invoices, the receipts, the bank statement and the timesheets. Quarterly if monthly is genuinely too much; yearly is a tax return, not management.
In the US, a sole proprietor reports the business's income and expenses on Schedule C with their personal return, and the IRS says to keep the records behind it generally for three years from filing (six if income was under-reported by more than a quarter, and employment-tax records at least four years). An LLC taxed as a partnership or corporation files differently, and the categories on this sheet still line up. In Australia the same statement works for a GST-registered business, and in the UK for a VAT-registered one. In the UK and Australia alike, the tax you collect isn't income — ask your accountant how to show it. Confirm the details with your accountant. Check your state's rules or ask an accountant.
No. Zarla has invoicing: the invoice tool keeps every invoice you've sent and marks the ones that are paid, which gives you the income lines. Expenses, payroll and the statement itself live on this template, in bookkeeping software or with your accountant.
Sources
Read October 26, 2026.
- IRS — About Schedule C (Form 1040) — sole proprietors report business income or loss on Schedule C (updated June 28, 2026)
- IRS — How long should I keep records? — generally three years; six if income under-reported by more than 25%; employment tax records at least four years (updated June 30, 2026)
- US Department of Labor — Fact Sheet #21, Recordkeeping Requirements Under the FLSA — payroll records kept three years (revised July 2008)
- Fair Work Ombudsman (Australia) — Record-keeping — time and wages records kept seven years (October 23, 2026)
Grow the top line
Add what you do, your town and your business name, and Zarla builds the site from that one line — with quotes, invoices and your inquiries in the same dashboard.
Already have a website? Bring it across →Zarla keeps your old page addresses where it can and redirects the ones that change, helping you keep the Google standing you've built.