P&L Tips: Simplify Expense Categories and Improve Business Insight
🧾 How Should You Categorize Expenses on Your Profit and Loss Statement?
When categorizing expenses on a Profit and Loss (P&L) statement, there isn’t always just one “correct” way to do it. Some costs could reasonably fit into multiple categories. What matters most isn’t the exact category name—it’s whether your financial reporting helps you make informed decisions.
📊 Examples to Consider:
▪️Marketing & Advertising
Think social media ads, sponsorships, printed materials. Do you want them grouped under one umbrella or separated to track ROI more closely?
▪️Software Subscriptions
Should these go under “Office Expenses” or “Technology”? That depends on what makes the most sense for your operations.
📌 Key Tip: Be Consistent
Once you decide how to categorize an expense, stick with it. Consistency makes your reports easier to read and improves your ability to track trends and manage cash flow.
💼 How MJ Webb Bookkeeping Can Help
At MJ Webb Bookkeeping, we use industry best practices to recommend categorization methods—but we always tailor your reports to reflect how you want to see your financial data. After all, these reports should work for you, not just your accountant.
📣 Need Help? Let’s Simplify Your Finances.
Contact MJ Webb Bookkeeping today for customized support that makes your financial data work for you.