Other Expenses Lines: Compare each expense line to the matching expense from the previous month. For example, some express parcel shippers tacked on a  fuel surcharge increase when gasoline prices kitchen Storage Box surged to over  a gallon.Compare the Total Income figures and the bottom line Net Income figures.Tip: Get all of your suppliers to fax you their latest price sheets and compare these figures to the costs you have for the items in your accounting system.Cost of Goods Sold: Look at your cost of goods sold to see if your inventory was replenished fully or you were out of stock on some items that you could have sold. 

Deciding to cut back on talking to your current and potential customers can cause them to forget your company and to shop at your competitor who is still promoting. Consumers have not stopped buying, they are just being more selective about what they buy and where they shop. Investigate whether the costs have gone up and you need to pass on the cost increases.There are many ways to analyze your P&L to identify some lost income opportunities; here are just a few.Advertising & Promotion: The first expense item(s) to look at are your advertising and promotion expenses. 

Whether you are up or down compared to the previous month, you need to use the rest of the report to figure out why that may be the case.Pull last months P&L statement so you can compare it with the current months statement. Notice how a well -known coffee shop raises its prices for coffee a nickel or a dime every months and customers keep right on buying.This would eliminate the strange sensation that you may have experienced when you are selling more but making less. Did you cut back or increase promotion? Did you change your promotion and is working better or perhaps not working as well?Too many businesses cut back on promotion in tough times.This ensures the sales you make have an adequate profit margin built into them. They did this because their prices increased, so they had to pass them on to you  their customer. Thats a big mistake. Did previous cost cutting measures help the bottom line profit? If so, congratulate yourself. 

Then decide if you should raise your prices to pass any increased costs on to your customers.What do you do when you get your Profit & Loss Statement (P&L) from your accountant, or when you print one from your accounting software?Do you ignore it, or look at the total income and the bottom line net income and then toss it in a drawer or file folder without analyzing it?If thats the case, then you are missing out on some potential opportunities to increase your sales and your profits. And you think, What the heck is going on here?So be sure to look this over with a critical eye.If your suppliers have raised prices, you should increase your pricing structure on the products you are selling. Smart money management practices include staying in control of how your companys income is being used and to make adjustments that are in the companys best financial interest. Sometimes suppliers raise their costs and forget to inform you, or the announcement gets lost before it reaches your in-box, and you don notice the increase right away. Your balance sheet shows you the credit debt (liabilities) you owe and paying those is not deductible except for the finance charges or interest. You can lose sales by being out of stock as well as not passing on price increases from your suppliers.Tip: Its better to increase you r prices a smaller bit by bit over time, rather than increase them by a large amount all at once. Are expenses creeping up without you realizing it? If so you can decide where to cut back.Balance Sheet Items: If the bottom line Net Income is up, but you dont have that cash sitting in a bank account where you can see it, it usually means that you paid out the profits to principal owed on debt.

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