Your profit and loss account (P&L) shows business performance.
It measures how much money you made, and how you made it, over a
specific period. It can measure profitability of:
- trading over short periods like a month
- trading over longer periods like a year
- specific projects,
- specific clients.
Most P&L’s are set out in a logical format that’s easy to follow:
Download the dmzine to see an explanation of the various parts of a P&L.
Some computerised accounting systems may lay the figures out
differently, but when accounts are printed, they are generally shown in
To make a P&L meaningful you should breakdown the income and expenses.
For example our accounts itemises Income under a sub-category of
professional fees which includes design, photography/illustration,
artwork, new media, design management and couriers/deliveries.
Expenses are broken down into 25 items such as accounting, bank
charges, insurance, leases and rent through to staff training and
The amount of detail really depends on the types of costs you need to track.
P&L’s are not a difficult concept and deal with the day-to-day
running of a design studio. Understanding your P&L can ensure you
have a profitable business.
illustration for Streamtime by