Guides
Part of Building clear profit and loss forms
Getting profit and loss forms format right the first time
Profit and loss format: indentation, rounding, sign conventions and column layouts that fit one page, plus what belongs in a schedule behind the form.
The same twelve numbers can be laid out so that a reader sees the answer in ten seconds, or never. Indentation, rounding, column order, and where the subtotals sit are not decoration on a profit and loss form. They are the grammar that tells the reader which lines add up to which.
What the lines should be is in the profit and loss overview. This page is about presentation only: the rules that make one form readable, and the layouts that fit different jobs.
What to take away
- Three levels of indentation and no moresection, line, subtotal.
- Round to whole units on any form meant to be read rather than audited.
- One page for the summary, always. Detail goes in schedules behind it.
Indentation as grammar
A reader should be able to tell which lines are added together from their position alone.
Indentation and emphasis by line type
Line type
- Section heading
- Flush left
- Line item
- Indented two spaces
- Section subtotal
- Same indent
- Major subtotal
- Flush left
Position
- Section heading
- Capitals
- Line item
- Regular
- Section subtotal
- Rule above, bold
- Major subtotal
- Bold
Style
- Section heading
- Line item
- Section subtotal
- Major subtotal
REVENUE <- section heading, flush left, capitals
Fees [ ] <- line, indented two spaces
Recoverable expenses [ ]
Less credits ([ ])
Net revenue [ ] <- subtotal, same indent, rule above, bold
DIRECT COSTS
Delivery salaries [ ]
Subcontractors [ ]
Total direct costs [ ]
GROSS PROFIT <- major subtotal, flush left, bold
Gross margin [ %]
Section headings flush left in capitals, lines under them indented. Section subtotal at the same indent as its lines, separated by a rule.
Major subtotals (gross profit, operating profit, net profit) flush left and bold so the eye can skim the left edge and read only the four numbers that matter. No fourth level; if a line needs sub-lines, it needs a schedule.
Numbers
- Whole units on a management form.Pennies on a form read by a manager are noise; the reader compares magnitudes, not cents. Round every line the same way and make the subtotals the sum of the rounded lines, so the form agrees with itself.
- Thousands separators, always. A six-figure number without them is misread.
- Negatives in brackets, and only for lines that reduce: credits, costs shown in a revenue section, a loss. Costs in a cost section are positive numbers, because the heading already says they are subtracted.
- No currency symbol on every line.State the currency once, in the header. A column of symbols is a column of visual noise.
- Percentages to one decimal place, and only in a column labeled as such.
- Dashes for zero, not blanks.A blank looks like a missing figure; a dash says the figure is nil.
- Right-align every figure on the decimal, even when the decimals are hidden.
The same rules apply to the totals block of a quote. A business that formats money the same way on every document looks trustworthy before anyone checks the numbers. The federal plain language design guidance makes the same argument about tables generally: layout decides whether the content is read.
Number formatting rules
- Round every line the same way
- Use thousands separators always
- Negatives in brackets only
- No currency symbol on every line
- Percentages to one decimal place
- Dashes for zero, not blanks
- Right-align every figure on the decimal
Column layouts that fit a page
The trap is a form so wide that it prints across two pages, split down a column of figures. Three layouts that fit.
Two-period portrait. This period, prior period, change, percent of revenue. Four figure columns; the description column takes the left third. Fits portrait at a readable type size.
This Prior Change % rev
Net revenue [ ] [ ] [ ] 100.0
Total direct costs [ ] [ ] [ ] [ ]
Gross profit [ ] [ ] [ ] [ ]
Thirteen columns across a wide page. Twelve months and a year-to-date total. Only subtotals fit at this width; the categories go on a second sheet. Description column narrow, figures in whole thousands if the business is large enough, month names abbreviated to three letters in the header.
Budget comparison portrait. Actual, budget, variance, and variance as a percent of budget. The variance column carries a sign convention explained in a footnote: favorable positive, or simply actual minus budget, but not a mix.
Never place two of these on one page. A reader given twelve months and a budget comparison at once reads neither.
The one-page rule
The summary form fits on one page: the four major subtotals, the sections between them at category level, and the comparison columns. Everything else is a schedule, one per category that needs it, laid out in the same style, with a total that matches the line on the face of the form to the unit.
If the one-page form runs over, the answer is never smaller type. It is fewer categories on the face and more schedules behind.
Header and footer
The header carries, in this order: the business name, profit and loss, the period from and to, the basis.
The footer carries, on every page: produced on date, produced by role, version number, page x of y. A form that circulates without a footer will be compared against a later version and cause an argument over which is right.
Screen and print
- Design for print in black and white, then check it on a screen. Not the other way round; screens forgive what paper does not.
- Color never carries meaning. A red negative is fine as a second signal, but the brackets do the work, because the form will be printed on a shared printer that has no red.
- Shading on subtotal rows, lightly, survives most printers and helps the eye. Colored bands do not.
- On a screen, freeze the description column and the header row if the form is wider than the window.
- Sending the form as a spreadsheet invites edits. Send a fixed-format copy for the record and the spreadsheet only to someone who needs to work in it.
Consistency with everything else
The header block, the type, and the way money is written should match the rest of what the business issues. A form that looks like it came from a different company than the letterhead invites the question of which one is right.
The materials in business card formats set the identity; the form should inherit it. Where the form is the main document in a management meeting, the page the meeting looks at is the one-page summary, and the schedules are there for the question someone asks.
Before it goes
- Four major subtotals visible by skimming the left edge.
- Three indent levels, no more.
- Every figure rounded the same way; subtotals equal the sum of their lines.
- Negatives in one style; zeros as dashes.
- Header has period and basis; footer has date, version, page count.
- Fits on one page upright, or one wide page for the monthly view, at a type size a reader will not squint at.
- Printed once in black and white and read from the paper.
