How to Automate Your Profit and Loss Statements

 At a high level, your profit and loss statement shows the revenues earned, any refunds / chargebacks, expenses, and any amount remaining is your profit/loss for each period. Using QuickBooks or other Software / ERP systems will often give you automated exports of profit and loss statements, balance sheets, and other reports. What if you don't use those software programs, or what if you want to build budgets and actuals without those programs? Well, then you can still produce automated financial statements with spreadsheets (Excel or Google Sheets).

Relevant Templates:

Both the spreadsheets linked above use a database style data entry system and formulas to populate relevant statements over various time frames.

General Methodology

Profit and loss statement (also known as income statement) automation with spreadsheets can greatly simplify the process of creating and updating financial statements. Here are the steps you can follow to automate your profit and loss statement using a spreadsheet program like Microsoft Excel or Google Sheets:
  • Set up your spreadsheet: Create a new spreadsheet and label the first sheet "Profit and Loss Statement." Create rows for your revenue, cost of goods sold, and expenses, and add rows for each category.
  • Enter your data: Enter your revenue, cost of goods sold, and expenses data into the appropriate cells. Use formulas to calculate subtotals and totals automatically.
  • Format your data: Use formatting features such as bolding, shading, and borders to make your spreadsheet easy to read. Study indenting features to make sub-total labels more indented and individual rows less indented. There are a few different formatting styles, just be consistent.
  • Update your data: Regularly update your spreadsheet with new data as it becomes available. You can use the same formulas you created earlier to automatically calculate new subtotals and totals.
  • Analyze your data: Use your profit and loss statement to analyze your business's financial performance. Look for trends, identify areas where you can reduce costs, and make adjustments to your business strategy as needed. Here are some balance sheet KPIs (and other Accounting KPIs)
  • Share your data: Share your spreadsheet with key stakeholders, such as your accountant or business partners. This can help them understand your financial performance and provide valuable feedback.
By automating your profit and loss statement with a spreadsheet program, you can save time, reduce errors, and gain valuable insights into your business's financial performance.