How to Read a Profit and Loss Statement (Without Falling Asleep)

Let’s be honest — most small business owners didn’t start their business because they love spreadsheets. You’re out there doing the work you’re great at… not dreaming about Profit & Loss reports.

But here’s the thing: your P&L (aka Profit and Loss Statement, aka Income Statement) is one of the most powerful tools you have. It tells you if your business is actually making money — or just staying busy.

So let’s break it down, real simple, no snoozing required.

What Is a Profit and Loss Statement?

It’s a summary of your income and expenses over a specific period of time — usually monthly, quarterly, or yearly.

At the end of the day, it shows:

• How much money came in

• How much went out

• What’s left over (profit or loss)

If your business was a game, this is your scoreboard.

What Timeframe Should You Look At?

Monthly is the sweet spot. You want to catch problems early — not once a year when it’s too late to fix them.

The Key Sections (Without the Jargon)

1. Revenue (a.k.a. Sales or Income)

This is the money your business brought in before expenses. If you clean houses, detail cars, or install gutters — this is what your clients paid you.

2. Cost of Goods Sold (COGS)

These are the direct costs to do the work. Think: cleaning supplies, subcontractor pay, materials, etc.

If you’re in a service business, COGS might be lower — but still important to track.

3. Gross Profit

Revenue minus COGS. This shows what you really made before paying for overhead.

Gross Profit = Revenue – COGS

4. Operating Expenses

These are the everyday costs of running your business. Examples:

• Insurance

• Advertising

• Office supplies

• Software subscriptions

• Vehicle expenses

This is where most of your money disappears without you noticing.

5. Net Profit (or Loss)

The bottom line. This is what’s left after everything — the true health check of your business.

If this number is negative, it’s time to reassess your pricing, spending, or both.

So… Why Should You Care?

Because your P&L can tell you:

• Are you charging enough?

• Are you spending too much?

• Are you on track to meet your goals?

• Can you afford to hire help, buy equipment, or take a break?

And when tax season rolls around? Having a clean P&L saves you time, stress, and possibly money.

Quick Action Plan

1. Pull your P&L for the last month

2. Highlight your top 3 biggest expenses

3. Check if your net profit is where you want it to be

4. Ask yourself: What can I tweak?

Final Thoughts

You don’t need to be an accountant to read a Profit and Loss — you just need to look at it. Regularly. A messy P&L is better than no P&L at all.

Need help making sense of yours? I offer 1 month free catch-up — no pressure, just clarity.

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Or you can send us an email at David@ruckandreconcile.com

How to Know if Your Cleaning Business Is Actually Profitable

You’re booking jobs, sending invoices, and staying busy — but are you actually making a profit?

It’s easy to assume that money coming in equals money made, but without a clear look at your numbers, it’s just guesswork. Let’s break down how to tell if your cleaning business is truly profitable — and how to make sure it stays that way.

Revenue ≠ Profit

Just because your bank account has deposits doesn’t mean you’re in the clear. Profit is what’s left after all your expenses — not before.

Example:
You made $5,000 this month cleaning houses.
You spent $1,500 on supplies, gas, and insurance.
You paid $1,000 to a part-time helper.
That leaves $2,500 in profit.

Knowing that number — consistently — is what helps you grow your business without burning out or going broke.

What Counts as a Business Expense?

To figure out your profit, you need to subtract all business-related costs, like:

• Cleaning supplies & equipment

• Gas or mileage

• Advertising or lead generation

• Insurance

• Subcontractor or employee pay

• Business licenses or software (like scheduling or bookkeeping apps)

• Etc.

Understand Your Income Statement

The Income Statement (also called the Profit & Loss statement) shows your:

• Revenue (your sales)

• Expenses

• Net Profit (the number that really matters)

It’s the best snapshot of how your business is performing — and you should be reviewing it monthly.

Reconcile Monthly, Not Just at Tax Time

Reconciling your books every month ensures:

• All income and expenses are recorded

• You spot any double charges or missing payments

• You know where your business stands at a glance

Don’t wait until tax season to find out how your business is doing — by then, it’s too late to make changes.

What If You're Not Making as Much as You Thought?

If your profit margins are low, here are a few places to look:

• Are your prices too low? You might be undercharging.

• Are you overspending on supplies or gas? Look for bulk buying or route efficiency.

• Are you doing too many “freebies”? Time is money — track it.

• Are you paying helpers but not billing enough? Labor costs should be built into your pricing.

Quick Profit Check-In (DIY Style)

Every month, jot down:

1. How much money came in

2. How much you spent

3. What’s left over

If that leftover number feels smaller than expected, it’s time to dig deeper.

Final Thoughts

Your business should be serving you — not the other way around. If you’re working hard but still not seeing results, your bookkeeping might be the missing link.

Want help breaking down your numbers?
Let’s do a quick Bookkeeping Health Check together — no pressure, just clarity.

Contact us by clicking here or send us an email at David@ruckandreconcile.com.

Check out the services we offer here.