finance-pl

> **Templates and analytical tools only - not personalized financial, tax, accounting, or legal advice.** P&L line classification, revenue recognition (ASC 606 / IFRS 15), and basis-of-accounting choice materially affect the figures. Review with a CPA before sharing externally (lender, investor, tax preparer). # Finance - P&L Statement Generate a Profit and Loss statement with period-over-period comparison and key margin metrics. ## When to use - Monthly or quarterly P&L review - Comparing actuals to a prior period or budget - Building a financial summary for a business partner, lender, or investor - Checking gross margin, operating margin, and net margin trends > For advanced financial modeling (scenario analysis, DCF), load the financial-modeler skill. ## Required first prompt - basis of accounting Before generating the P&L, ask: > **Basis of accounting**: `cash` / `accrual` / `modified cash` - REQUIRED. > This materially changes what counts as "revenue" and "expense" for the period and which schedule (cash vs accrual) ties to the cash-flow statement. **Do not generate a P&L without this declaration.** The P&L header MUST display `basis_of_accounting: <selected>` so any downstream reader sees it. ### ASC 606 / IFRS 15 deferred-revenue treatment (accrual filers) For SaaS / subscription / annual-prepay / multi-element / progress-billed contracts, recognize revenue **as performance obligations are satisfied**, not when invoiced or cash is collected. Common SMB pitfalls: - **Annual prepay SaaS** - invoice $12,000 in January; recognize $1,000 / month; remainder sits in **deferred revenue** liability. **A SaaS SMB selling annual prepay overstates revenue 12× without this treatment.** - **Implementation / setup fees** - generally recognize ratably over the expected customer life unless distinct from the subscription. - **Variable consideration** (rebates, refunds, usage credits) - estimate and constrain per ASC 606-10-32-11. - **Right of return** - if material, recognize net of estimated returns. Cash-basis filers do not apply ASC 606 - revenue equals cash collected in the period - but should still note the deferred-revenue economic reality when sharing the P&L externally. ## Inputs - **Basis of accounting**: cash / accrual / modified cash (REQUIRED - see above) - **Period**: month (YYYY-MM), quarter (YYYY-Qn), or year (YYYY) - **Revenue** by category (product, service, subscription / recurring, other) - current and prior period - **Cost of revenue / COGS** - current and prior period - **Operating expenses** by category (R&D, S&M, G&A) - current and prior period - **Depreciation & amortization (D&A)** - current and prior period (REQUIRED operating line) - **Owner compensation / draws** (sole-prop or S-corp) - flagged separately for normalization - **Other income / expense** (interest, one-time items) - optional - **Tax rate** - optional; if unknown, output pre-tax income and note - **Budget** - optional; include for budget vs actual variance column - **Business scale**: revenue tier (`<$1M` / `$1–10M` / `$10M+`) - used to set scale-aware variance thresholds ## Output format ``` PROFIT & LOSS STATEMENT Period: [Period description] basis_of_accounting: [cash | accrual | modified cash] Jurisdiction: [SELECTED] (in dollars, unless otherwise noted) Current Prior Variance Var % Period Period ($) (%) -------- -------- -------- -------- REVENUE Product revenue $XX,XXX $XX,XXX $X,XXX X.X% Service revenue $XX,XXX $XX,XXX $X,XXX X.X% Subscription / recurring $XX,XXX $XX,XXX $X,XXX X.X% Other revenue $XX,XXX $XX,XXX $X,XXX X.X% -------- -------- -------- TOTAL REVENUE $XX,XXX $XX,XXX $X,XXX X.X% COST OF REVENUE $XX,XXX $XX,XXX $X,XXX X.X% (For SaaS, break out: hosting / direct labor / data / payment fees) -------- -------- GROSS PROFIT $XX,XXX $XX,XXX $X,XXX X.X% Gross Margin XX.X% XX.X% OPERATING EXPENSES Salaries & wages $XX,XXX $XX,XXX $X,XXX X.X% Owner compensation (S-corp) $XX,XXX $XX,XXX $X,XXX X.X% ← reasonable-salary Owner draws (sole prop) $XX,XXX $XX,XXX $X,XXX X.X% ← BTL: not an expense Marketing & advertising $XX,XXX $XX,XXX $X,XXX X.X% Rent & facilities $XX,XXX $XX,XXX $X,XXX X.X% Software & subscriptions $XX,XXX $XX,XXX $X,XXX X.X% Professional services $XX,XXX $XX,XXX $X,XXX X.X% Depreciation & amortization $XX,XXX $XX,XXX $X,XXX X.X% Other operating expenses $XX,XXX $XX,XXX $X,XXX X.X% -------- -------- TOTAL OPERATING EXPENSES $XX,XXX $XX,XXX $X,XXX X.X% OPERATING INCOME (LOSS) $XX,XXX $XX,XXX $X,XXX X.X% Operating Margin XX.X% XX.X% OTHER INCOME (EXPENSE) Interest income $XX,XXX $XX,XXX Interest expense ($XX,XXX) ($XX,XXX) Other, net $XX,XXX $XX,XXX -------- -------- INCOME BEFORE TAXES $XX,XXX $XX,XXX $X,XXX X.X% Income tax expense $XX,XXX $XX,XXX -------- -------- NET INCOME (LOSS) $XX,XXX $XX,XXX $X,XXX X.X% Net Margin XX.X% XX.X% ``` ## Key metrics summary After the P&L, output: ``` KEY METRICS Current Prior Change Revenue growth (%) X.X% Gross margin (%) XX.X% XX.X% X.X pp Operating margin (%) XX.X% XX.X% X.X pp Net margin (%) XX.X% XX.X% X.X pp OpEx as % of revenue XX.X% XX.X% X.X pp ``` ## Material variance flags (scale-aware) Apply the threshold appropriate to business scale (single-flat threshold misleads at scale): | Revenue tier | Variance flag threshold | |---|---| | <$1M annual | 10% **or** $500 (whichever is smaller) | | $1–10M annual | 5% **or** $5,000 | | $10M+ annual | 3% **or** $25,000 | Flag any line item exceeding the applicable threshold for investigation: | Line Item | Variance ($) | Variance (%) | Direction | Likely driver | |---|---|---|---|---| | [Item] | $X,XXX | X.X% | Unfavorable | Investigate | ## Margin benchmarks (SMB reference - split bootstrapped vs venture-funded) | Business type | Bootstrapped SMB gross | VC-backed gross | Bootstrapped net | VC-backed net | |---|---|---|---|---| | Software / SaaS | 75–90% | 65–85% | 5–15% | -50% to +25% (often negative - investing in growth) | | Professional services | 40–60% | 40–60% | 10–25% | 10–20% | | E-commerce / retail | 30–50% | 30–50% | 2–8% | -30% to +5% | | Manufacturing | 25–45% | n/a | 5–15% | n/a | | Restaurants / food service | 55–70% (food cost 30–45%) | n/a | 2–9% | n/a | | Agency / services-firm | 40–60% | n/a | 10–20% | n/a (utilization-rate proxy: 65–75% billable) | **Owner-comp normalization note:** for sole-prop and S-corp comparisons, normalize net margin by adding back / pulling out owner draws (sole-prop) or reasonable salary (S-corp) so the comparison to benchmarks is apples-to-apples. Owner compensation should be flagged distinct from wages. ## Workflow 1. Collect inputs (ask for current period revenue and expenses; prior period for comparison). 2. Build the P&L table. 3. Calculate margins and key metrics. 4. Flag material variances. 5. Output the statement with observations. 6. Offer to save to `pl-<period>.md` in the workspace. --- > _**Templates and analytical tools only - not personalized financial, tax, accounting, or legal advice.** Generated [DATE]. Jurisdiction: [SELECTED]. basis_of_accounting: [SELECTED]. Revenue recognition for SaaS / annual prepay / multi-element contracts requires ASC 606 / IFRS 15 treatment under accrual basis. D&A line and owner-comp normalization are required for benchmark comparison. Variance thresholds are scale-aware. Review with a qualified CPA or accountant before sharing externally. Wayland and the plugin authors disclaim all liability for use of these templates._