A profit and loss statement (also called an income statement or P&L) summarizes your income minus your expenses over a period of time. The bottom line tells you whether you made a profit or a loss. It's the single clearest measure of how a small business is actually doing.
The parts of a P&L
- Revenue — the money your business earned in the period.
- Cost of goods sold (COGS) — the direct cost of what you sold (only if you sell physical products or resold services).
- Gross profit — revenue − COGS.
- Operating expenses — everything else it takes to run the business (software, contractors, marketing, rent, fees).
- Net profit — gross profit − operating expenses. This is your true bottom line.
How to make one without accounting software
- Pick a period (a month is a good default).
- Total your income for the period.
- Total your expenses, grouped by category.
- Subtract expenses from income.
The hard part is having clean, categorized expense records — which is exactly what ExpenseBot produces automatically.
How ExpenseBot gives you a live P&L
ExpenseBot captures spend from your receipts and Gmail, categorizes it into tags, and can produce a per-tag P&L (profit by client, project, or category) on request. The Monthly Books Review flags when a month has both income and expenses recorded and is "ready for a P&L," and takes you straight to your profit-and-loss view. It's a look at what already happened — not a forecast or a budget.
Ask the AI assistant for "my P&L this month" or "profit by client" once your spend is captured.
Estimates only — for tax filing, confirm figures with your tax professional.