Your revenue total will include all your sales within a set period of time. In accounting terms, revenue relates to the income generated by providing services or selling products to customers. Once these costs have been included, this will give you your net profit value. This is the amount of profit you generated without factoring in day to day expenses. Your turnover, the amount of money you generate from sales, combined with direct costs, will give you your gross profit value. This will include daily running costs or overheads, such as renting a workshop or office space, and direct costs, such as buying materials. This means that your expenses and outgoings exceed the value of your turnover.Ī profit and loss account, sometimes called a P&L account, outlines your business income minus outgoings, over the course of a month, a year or a 5-year period. If you fail to generate a profit, you’ll make a loss. The profit and turnover figures essentially form the outline of your statement for the year.Īt the top, you’ll find the turnover, and at the bottom, you’ll find the profit.
If you turned over £50,000 and your expenses amounted to £25,000, you’d have a profit of £25,000, for example. Profit is the name given to the residual sum of money once all expenses have been taken into account. Turnover is a term used to describe the net sales of a business or the total income of a contractor.
Contractor expenses for profit and loss how to#
How to read a profit and loss balance sheet.
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