Profit and Loss Statement Template

What is in the template, tab by tab

The workbook is a reporting P&L: it records what happened after you close the books each month. Most templates that rank for this search are one generic page with "sales" and "expenses" lines. A software company needs revenue split by type, cost of revenue that holds hosting and support, and operating expenses grouped the way investors and benchmark reports group them.

The lines follow the order of a SaaS income statement in a public filing: revenue, cost of revenue, gross profit, operating expenses by function, then the items below operating income. Depreciation and amortization sit on their own line below EBITDA so the department totals stay clean.

The SaaS P&L, line by line

Every line answers one question. The table shows what goes in each one and the classification mistake that most often distorts it.

For a longer list of what belongs in cost of revenue, see what to include in SaaS COGS. The point of the split is comparability: if support moves from cost of revenue to opex one quarter, gross margin jumps and nothing in the business changed.

How do I write a profit and loss statement?

Pick the period, record revenue and costs for it on an accrual basis, sort every cost into a line, then subtract down to net income. With the template, that is six steps a month.

1. Close the month. Book revenue, accrue the costs that have not been invoiced yet, and run the trial balance from your accounting system.
2. Map the accounts once. Use the Account map tab to assign every ledger account to one P&L line. Write the rule down for the costs that need judgment, such as customer success and payment fees, and keep it.
3. Enter the month. Type the totals into that month's yellow cells on the Monthly P&L tab. Costs go in as positive numbers. Interest expense goes in as a positive number too; other expense goes in as a negative.
4. Fill in the memo lines. Stock-based compensation that is already inside the department lines, ending ARR from your ARR waterfall, and ending headcount. None of them is added into the P&L.
5. Read the % columns. Each line as a share of revenue, by month and for the year. A line that moves more than a point or two without a reason is the first thing to explain.
6. Compare. On the Annual P&L tab, enter last year and this year's budget once, and the variance columns update as the months come in. The Ratios tab puts your margins next to public medians.

The P&L formulas, in Excel and Google Sheets

Every formula uses functions both apps share. Row and column references are from the Monthly P&L tab, January column. Examples come from the full year of the worked example.

Divisions are wrapped in IFERROR so the blank file shows zeros instead of errors. The full-year column adds the twelve months for every flow line and takes the last month entered for ARR and headcount, so a half-finished year still reads correctly. For more on the margin lines, ORM's glossary covers the EBITDA margin and how it differs from operating margin.

Profit and loss statement example: a $12M SaaS company

This is the worked example inside the example file. The company and every number are illustrative, made up to show the mechanics. It sells annual subscriptions plus implementation services and closes its books monthly. Amounts are in thousands of dollars.

Revenue grew 43.1%, from $8,480,000 to $12,137,400. EBITDA margin improved from -31.6% to -7.1% because operating expenses grew 14.4% while revenue grew 43.1%. Four things the template shows that a one-line "expenses" template would hide:

• Services lose money in slow months. In January the company billed $62,000 of services and spent $59,400 delivering them, a 4.2% services gross margin. For the year it reached 23.4%, still below the 30% median, and the blended gross margin hides it because services are only 8.4% of revenue.
• Revenue missed budget, costs did not. Subscription revenue came in $377,600 under budget, sales and marketing $45,000 over, and EBITDA $363,500 below the -$502,000 plan. The variance column puts that on one row each.
• One-time costs show up in the % block. The annual audit lands in March: legal, audit and accounting jumps from $18,000 to $63,000, and G&A goes from 18.0% of revenue in February to 22.1% in March. The monthly % columns flag it. The note in your board pack explains it.
• ARR is ahead of revenue. Ending ARR is $12,777,000 while the year's revenue is $12,137,400, and December's subscription revenue times 12 is $12,501,600. In a growing company ARR runs ahead of recognized revenue. If ARR were below the subscription run rate, that gap would be the first thing to reconcile.

The Rule of 40 score is 43.1% growth plus a -7.1% EBITDA margin, or 36.0%. Adjusted EBITDA, which adds back $690,000 of stock-based compensation, is -$175,500. Show both: the add-back is common in SaaS reporting, and a board will ask which one the plan is built on. ORM's glossary explains the Rule of 40 and which margin to use in it.

SaaS P&L benchmarks: how does yours compare?

Compare against your own history first, then against a public median to see which lines need a written reason. These are the medians the Ratios tab uses.

The Benchmarkit report uses 2024 data from B2B SaaS companies. It also shows that private companies above $100M of ARR spend a median 33% of revenue on sales and marketing, so larger companies should expect a lower S&M line. Medians of separate lines do not add up to a median P&L, so use them line by line, not to build a target EBITDA.

Monthly or annual P&L?

Both, from the same numbers. The monthly view is where you manage: it shows seasonality, one-time costs and margin drift while there is time to act. The annual view is where you report: boards, lenders and investors compare full years and the budget. The template keeps one set of monthly inputs and builds the year from them, so the two can never disagree. For a quarterly view, add three monthly columns; every line is a flow, so the quarter is the sum.

P&L, financial forecast, balance sheet and cash flow

A P&L reports profit for a period that has ended. A forecast projects it forward. The balance sheet shows what the company owns and owes on one date, and the cash flow statement explains how cash moved, which for a SaaS company with annual upfront billing can be very different from profit.

The two ORM templates are built to work together. This one closes each month with actuals. The financial forecast template has a monthly P&L tab driven by pipeline, retention and hiring, so you can lay a month of actuals next to the forecast for the same month. That comparison is the core of the monthly FP&A cycle: report, explain the variance, re-forecast.

Bookings, billings and ARR are not revenue

Only recognized revenue goes on the P&L. A $120,000 annual contract signed in March is $120,000 of bookings in March, may be $120,000 of billings in March if it is invoiced upfront, and adds $10,000 of revenue a month for twelve months. ARR is a run rate on one date. All four numbers matter, and they belong in different reports.

Pete Furseth, ORM's COO, says that if he could put one chart in front of every SaaS CFO, it would be the monthly ARR waterfall: beginning ARR, churned and contracted ARR, new and expansion ARR, and ending ARR, where each month's beginning ARR equals the prior month's ending ARR, with gross and net revenue retention on the same chart. "This reconciling waterfall by month is magic." That is why the template asks for ending ARR as a memo line. The waterfall explains the recurring base. The P&L shows what it cost to keep and grow it.

What Pete Furseth checks when finance and revenue share one set of numbers

Pete works with B2B SaaS revenue and finance teams on forecasts and plans. These points shaped how the template is built.

• The same number on every slide. "If you show one number on one slide, that number better show up on the next, or there should be a clear explanation for why it changed." The annual tab reads from the monthly tab, so the year and its months cannot disagree.
• Traceable to the source. Pete wants every figure in a board pack to drill down to how it was built. Every subtotal in the template is a formula over inputs you can see, and the Account map documents where each cost came from.
• Customer success is a cost choice with a revenue effect. Pete has seen that when renewals are run by a finance function that only sends invoices, gross revenue retention tends to be lower than at companies with a dedicated customer success team. That team costs more. The template gives customer success its own cost of revenue line so you can see the cost next to the retention it buys.
• Fewer spreadsheets, not more. Pete describes Sales Ops teams maintaining "37 spreadsheets with 12 tabs in each" to keep the numbers current. One P&L workbook with one set of monthly inputs is the opposite of that.

Common P&L mistakes the template catches

• One revenue line. Subscription and services revenue have very different margins. Blended, a weak services line disappears.
• Hosting and support below gross profit. Gross margin looks higher than it is, and it stops being comparable with any benchmark.
• Depreciation inside the departments. EBITDA then includes a non-cash charge it is supposed to leave out.
• Commissions on a cash basis. If commissions are capitalized, the P&L carries the amortized expense, not the payout.
• No % of revenue. Dollars grow with the company. Percentages show whether each line is getting more or less efficient.
• No budget or prior year next to the actuals. A P&L on its own describes the month. Next to the plan, it tells you what to do.

ORM's take: the P&L reports the quarter, the forecast decides the next one

A clean monthly P&L tells you what the business earned and spent. It cannot tell you in week six of a quarter whether revenue will land where the plan assumed, and in a SaaS company revenue is the line that moves every margin below it. The revenue line in next quarter's P&L is decided by pipeline, win rates, cycle times and renewals today.

ORM forecasts new, expansion and renewal revenue from your own CRM data and updates the forecast as the quarter moves, so finance sees which way the revenue line is heading before the month closes. ORM targets 95% forecast accuracy on the forecasts it builds.

Common questions

Can I make my own P&L?

Any company can build its own P&L from its books. Export the trial balance from your accounting system at month end, map each account to a line (revenue, cost of revenue, sales and marketing, R&D, G&A, other), and add the subtotals. The template on this page does the adding and the percentages, and its Account map tab tells you where each common SaaS cost goes.

What is the basic P&L formula?

Net income equals revenue minus cost of revenue, minus operating expenses, minus depreciation and amortization, plus or minus interest and other items, minus income tax. The steps in between matter as much as the result: gross profit tells you what delivery costs, EBITDA tells you what running the company costs, and net income adds financing and tax.

How do I calculate the change in inventory in a profit and loss statement?

Change in inventory is ending inventory minus beginning inventory. For a company that holds stock, cost of goods sold equals beginning inventory plus purchases minus ending inventory, so a build-up of stock lowers COGS for the period. Most SaaS companies hold no inventory, so their cost of revenue is hosting, support and services delivery instead, and this line does not apply.

How do I create a P&L in Google Sheets?

Download the .xlsx from this page, upload it to Google Drive, then open it with Google Sheets (or use File, then Import, in a blank sheet). Every formula uses functions both apps share, such as SUM, IFERROR, INDEX, MATCH and EDATE, so nothing breaks. Enter your monthly actuals in the yellow cells and the totals, margins and ratios update.

Is a profit and loss statement the same as an income statement?

They are the same report under two names. Accountants and public company filings tend to say income statement or statement of operations, while operators and small businesses say P&L. Both show revenue, expenses and profit for a period of time, unlike a balance sheet, which shows what the company owns and owes on one date.

How often should a SaaS company prepare a P&L?

Close the books and produce a P&L every month, then roll the months into quarters and the fiscal year. Monthly is the rhythm boards and lenders expect, and it is the only way to see a margin problem while there is still time to fix it. Compare each month with the budget and with the same month last year, not only with the month before.

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