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The Simple Numbers P&L

One of the most common areas of feedback we receive from clients comes from our Simple Numbers P&L view. Traditional financial reporting has so many lines and accounts that the reader will go cross-eyed! In developing our view of the P&L, we had a couple of objectives in mind.

The first was to keep the most critical and actionable data visible. This would include gross margin, direct labor, management labor, and operating income. We then attacked the remainder of the P&L by bucketing income and expenses into logical buckets to help make decisions. For example, unless you plan to stop sewer and water services, it is likely not essential to list them as accounts on the P&L. Once this approach was complete, we created a P&L simplified to the following accounts (example available for download at

Sales – one account for all sales activity

COGS – all non-labor direct cost

Direct labor- labor cost for the team who directly delivers your service or product

Facilities – any building, vehicle and software expenses

Marketing – all non-labor sales and marketing cost

Management labor – all management and support labor cost

Payroll taxes & benefits

Other OPEX – catch-all for remaining operating expenses

Other income – non-recurring items such as interest income, etc.


Other expenses – interest, bad debt, etc.

Once you have your P&L formatted this way, you can quickly view the trend in your data and easily spot when something doesn’t look right. This leads to action and progress instead of drowning in details and becoming cross-eyed!


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