What Is a Profit & Loss (P&L) Statement?
A Profit & Loss statement (also called an Income Statement or Statement of Financial Activities) shows your organization’s financial performance over a period of time — usually a month, quarter, or year.
It tells you:
- How much money came in
- How much money you spent
- And whether you made a profit or a loss
Key Sections of the P&L
1. Revenue - All the money you earned from services provided. Common sources include:
- Medicaid reimbursements
- Commercial insurance payments
- Grants or contracts
- Donations
2. Expenses - All the money you spent to run your organization. We typically group them into two types:
- Direct Expenses — Costs tied directly to client services (e.g., clinician salaries, supervision, therapy supplies)
- Indirect (Overhead) Expenses — Costs that support the whole organization (e.g., admin salaries, rent, EHR software)
💡 Knowing and reviewing your expenses helps you spot opportunities to reduce costs, operate more efficiently, and plan for growth.
3. Net Income (aka “Bottom Line”) - What’s left after expenses — this is your profit or loss.
Net Income = Revenue - Expenses
- Positive = you earned a profit
- Negative = you operated at a loss
✅ Goal: Consistently bring in more than you spend so you can build reserves and plan ahead.
Where to Start (If You're Feeling Overwhelmed)
If the P&L feels intimidating, start simple:
- Look at the bottom line — Did we bring in more than we spent?
- Check your totals — What was our total revenue and total expenses?
- Then explore the details — What’s contributing to those totals? Any surprises?
💡 You don’t need to know everything — you just need to ask good questions and look for patterns.
What’s Behind the P&L: Your Chart of Accounts
Your Chart of Accounts (COA) is the list of all the financial categories your organization uses to track money coming in and going out. It’s the backbone of your financial reports — including the P&L.
Each account in the COA represents a type of income or expense. For example:
- Revenue accounts might include Medicaid, Private Insurance, and Grants
- Expense accounts might include Salaries, Rent, and Office Supplies
🎯 Goal: Set up a Chart of Accounts that reflects how your organization actually operates. That way, your P&L tells a story you can use.
Why Comparison Helps: Month-to-Month Analysis
Looking at one month’s P&L is helpful. But comparing it to the previous month gives you much more insight.
This P&L comparison helps you:
- See trends in revenue and expenses over time
- Spot anything unusual (like a sudden dip in revenue or a jump in costs)
- Make more informed decisions by seeing the big picture
💡 Even small shift scan become big trends — comparisons help you catch issues early.
Action Plan: How to Use Your P&L
- Review monthly. Block time each month to look at your numbers.
- Compare to the prior month. Spot trends and red flags early.
- Ask simple questions. Start with: Are we bringing in more than we’re spending?
- Drill into categories. Look closer if something seems off.
- Involve your team. Share highlights with program leads and admin staff.
💡 Not sure how to get your P&L? Ask your bookkeeper or accountant to send it to you every month — most accounting software can generate it automatically.
Need Help?
Onyx Analytics helps behavioral health providers understand their financial reports. If you're new to reviewing your P&L, we're happy to walk you through it.
Email us at info@onyxdataanalytics.com to get started.
