Your Guide to the Profit & Loss and Balance Sheet Reports
Getting your head around the numbers in your business isn’t always easy—especially when accounting jargon starts flying around. If you’re not quite sure what a profit and loss statement or a balance sheet actually tells you, don’t worry—you’re not alone.
At Cross Group, we work with a lot of small business owners who are experts at what they do, but don’t always feel confident when it comes to the financials. That’s where we come in.
Let’s break down two of the most important reports in your toolkit.
What’s a profit and loss statement?
You might have heard this called a P&L, income statement, or earnings report. Whichever name it goes by, it’s all about tracking what’s coming into your business and what’s going out.
Your P&L lays out:
Revenue (your sales and other income)
Expenses (everything from direct costs to general overheads)
This report helps you see whether your business is actually making money, over a specific period—like monthly, quarterly, or annually. It highlights where your income is strong, and where expenses might be creeping up.
It’s particularly helpful for:
Spotting trends in your sales and costs
Seeing how profitable your business is over time
Making informed decisions to keep things on track
What’s a balance sheet?
While your P&L looks at how your business has performed over time, your balance sheet gives you a snapshot of where things stand right now.
It’s based on a simple equation:
Assets – Liabilities = Equity
In other words, it shows:
Assets – what the business owns (like cash, stock, equipment)
Liabilities – what it owes (such as loans or supplier bills)
Equity – what’s left for you as the owner or shareholder
Your balance sheet is useful for:
Understanding your current financial position
Showing lenders or investors how solid your business is
Valuing the business, if you're planning to grow, restructure, or sell
Want to feel more confident reading your reports?
If terms like “retained earnings” and “net assets” make your eyes glaze over, we get it. Accounting can feel overwhelming—but it doesn’t have to be.
We’re always happy to walk you through your P&L, balance sheet, or any other part of your accounts in plain English. Whether you’re just starting out or ready to dive deeper into your numbers, we’ll help you understand what’s really going on in your business.
Get in touch and let’s make your numbers make sense.