Profit & Loss Preparation

Now let’s go ahead and grab your profit loss statements for the previous two years and a pen. I’m going to walk you through how to prepare your profit-loss for easy submission when building your forecasting tool. First you may have to take some time with your QuickBooks or accounting software that you use to put together your expenses in a way that makes more sense and are more easy to separate. We recommend having a section for income or revenue or collections, a section for cost of goods or cost of goods sold, staff operating expenses and then expenses or fixed and variable expenses. Finally we would have doctor expenses. Once you have your profit and loss statements, print them out and as you can see here, I’ve drawn a box and next to each line item of our expenses I want you to simply put an F, as in Foxtrot for fixed expenses. This would be to notate any expense that never changes in value, no matter what you do. This is normally limited to any loans, rent, or mortgage payments. The rest of the expenses should be notated with a V, as in victory. This would be for all of our variable operating expenses. That would be anything that does not fall into any of the other categories and changes month to month. Once you’ve completed this, we’ll show you how we’ll make it much easier when inputting this information into your forecasting tool.