How to make a simple profit and loss statement as a freelancer

A P&L answers one question: did the business make money this month? A landlord, a lender or a new client may ask you for one as proof of self-employment income, and you'll want one anyway to set your tax savings. This post, part of our taxes and expenses hub, gives a copyable template, fills it in for one month, and shows where each number comes from.

The template

[YOUR NAME OR BUSINESS NAME]
Profit and loss statement, [MONTH YEAR] (cash basis)

                                         This month    Year to date
INCOME
  Client payments received (before tax)  $________     $________
  Other business income                  $________     $________
  Refunds given to clients               ($_______)    ($_______)
TOTAL INCOME                             $________     $________

EXPENSES
  Advertising and marketing              $________     $________
  Car and truck (mileage, parking)       $________     $________
  Commissions and payment fees           $________     $________
  Contractors                            $________     $________
  Insurance (business)                   $________     $________
  Accountant and legal                   $________     $________
  Office supplies                        $________     $________
  Rent and coworking                     $________     $________
  Travel                                 $________     $________
  Meals (full cost)                      $________     $________
  Internet and phone (business share)    $________     $________
  Software and subscriptions             $________     $________
  Courses and training                   $________     $________
  Bank fees and other                    $________     $________
TOTAL EXPENSES                           $________     $________

NET PROFIT (total income - total expenses) $________   $________
Profit margin (net profit / total income)  ____%       ____%
Tax set-aside at ___% of net profit        $________   $________

Prepared by [NAME] on [DATE]. Figures from invoices and receipts on file.

Where each number comes from

• Client payments received: every invoice paid during the month, at the amount before sales tax. Sales tax you collected belongs to the state, not to you.
• Refunds: money you returned to clients in the month.
• Expenses: each receipt dated in the month, under the category you'll use on Schedule C. Use only the business share of mixed costs like your phone.
• Meals: show the full cost here so the P&L matches your bank. The 50% limit applies when you file.
• Year to date: add this month to last month's year-to-date column.

What doesn't go on a freelance P&L

• Transfers to your personal account (owner's draw). For a sole proprietor that's not an expense.
• Federal and state income tax payments, including quarterly estimates, and self-employment tax.
• Loan principal you repay. The interest is an expense; the principal isn't.
• A large equipment purchase you'll depreciate. Many freelancers show it on a separate line below net profit so one laptop doesn't make a month look like a loss.
• Unpaid invoices, on the cash method. Track them in a separate list of money owed to you.

Worked example: one month

The margin is the number to watch over time. If it slides from 78% to 65% over a few months, a cost has crept up or your pricing hasn't kept pace. The profit margin calculator works out margin and markup from any two numbers, and how much to set aside for taxes helps you pick the set-aside percentage.

When someone asks for a P&L as proof of income

1. Ask what period they want: year to date, the last 12 months or the last two calendar years.
2. Prepare the P&L for exactly that period, with your name, dates and "cash basis" in the heading.
3. Attach what backs it up, usually your last tax return with Schedule C, and bank statements if asked.
4. If an accountant prepared or reviewed it, say so. If not, don't imply that one did.
5. Send it as a PDF with a plain file name, like "Lee Studio P&L Jan-Sep 2026.pdf".

The SBA's manage your finances page lists the P&L as one of the basic statements every small business should keep, along with a balance sheet and cash flow. For a freelancer with no inventory and no loans, the P&L does most of the work.

Doing this in SoloWOS

SoloWOS builds the top of this statement for you. Expenses > Reports shows, for each month of the year, income from invoices marked paid (before the tax you charged), total expenses and profit, plus the year to date and a tax set-aside at your percentage. Income comes from invoices clients pay by card or that you mark paid, so nothing is typed twice. For the category breakdown, export the month's expenses to CSV and total the Category column in a spreadsheet. You can log business expenses with receipts as they happen. Accounting for a balance sheet or double-entry books is outside what SoloWOS does.

A self-prepared P&L is a management report, not an audited statement. Lenders often want tax returns as well; ask them what they need.