Profit and Loss Statements: A Guide for Moving Companies

United States Census data has revealed that about half as many people move each year as they did in the 1950s, causing a financial strain on the moving industry. As a result, moving companies must act as good stewards of their finances to endure this downtrend in moves. 

Our team at Pro Mover Accounting can help you gain a better understanding of the money moving in and out of your business. Keep reading to learn more about Profit and Loss Statements and how they influence the financial health of your business.  

What Are Profit and Loss Statements? 

Profit and loss statements are financial documentation that provide an overview of the revenues and expenses incurred for a fiscal year. These documents reveal if a business can produce a profit by raising sales, cutting expenses, or doing both.

Profit and Loss Statements are significant because many businesses must provide them to shareholders and legal entities. However, they are also helpful for your internal team. Once you compile Profit and Loss Statements, your team can better comprehend the net income of the company, which may aid in decision-making.

Diligently Track Your Income and Expenses

Tracking your business expenses and profits is an important component of your financial success. Documented financial information can be used to monitor the profitability and cost management of your business. 

All money coming in or out of your business must be accounted for on the P&L. Bookkeeping tools and accounting systems can help you track business expenses properly.

Banking

Many entrepreneurs take and spend money for their businesses out of their own bank accounts when they first get started. Although this may seem like an easy fix to handle your finances, it can usher in many financial  and legal headaches.

Business accounts are both appropriate and offer benefits such as accepting credit card payments and keeping a digital record of all transactions and deposits. This form of collecting payments is often most convenient for your consumers and a good financial management tool. 

As a new or inexperienced business owner, you will want to open up a bank account and select an accounting system that works for your business. By enlisting the aid of a bank or bookkeeping system, you can add securities to protect your financial information and your business. 

Expense Tracking

Even if you are connected to a bank, what about the small-dollar expenses that are paid in cash? Or handled through reimbursements? Keeping track of all business transactions can be difficult.

To alleviate some pressure, consider using an expense management system. You can use mobile apps and online systems to guarantee that you are accurately tracking your business spending. Many expenditure management applications offer sophisticated software that can easily integrate business plans.  

For a moving company, there are a lot of additional expenses for materials, gas, and reimbursements. This can be a headache if you don't have an organized system. With an expense tracking platform, movers can easily upload receipts and file for reimbursements. 

With so many miscellaneous costs when moving, it is important to review your expenses with a scrutinizing eye. Once you have properly recorded your financial data, you can review it to ensure that your financial figures are correct and continue to generate a healthy profit. 

Review Where Your Money Is Going

An accountant is going to do much more than compile a list of your expenses and revenue. They will help you double-check your financial records and create a game plan for the upcoming year. 

Once it's time to review your data and your numbers are double-checked, it is likely that you will review percentage-based profit and loss statements. By adding a percentage filter you can gain a more comprehensive understanding of what is happening with your finances. 

With a percentage-based breakdown of your spending, you can see how much money was spent on repairs, labor, materials, fuel, etc.

Mark Up Your Drafts

Reviewing your profit and loss statements is a great way to find financial discrepancies. By marking up your drafts you can find missing receipts, and instances of fraud or financial neglect. 

Even if you are working with a seasoned expert, you should be active in the reviewing process. Ask questions so that you can learn more about your business's spending and find ways to expand your earnings. 

Identify Areas of Concern 

Taking a holistic view of your company finances will let you see how they measure up to others in the moving industry. Once you do this you can determine how your overhead costs compare and how you can lower them. 

Profit and loss statements help you find areas of your business model that are money pits. By pinpointing areas that need improvement, you can improve your moving services and cut back on overhead costs.

The most beneficial part of profit and loss statements is your analysis. By comparing profit and loss and key performance indicators, you can identify areas in your business to expand or streamline. 

Leverage Profit and Loss Statements in Your Business

If you are not using profit and loss statements to guide your business choices, you are leaving money on the table! As a professional mover, you know how to relocate a family like no one else. Rather than relocating families, our team is trained to reallocate your spending to expand your profit margin. 

Interested in leveraging profit and loss statements to make your business more profitable? Contact us at Pro Mover Accounting today!