Most directors rely heavily on their P&L to make decisions. But if that’s the only report you’re reviewing each month, you’re probably missing critical information.

A solid P&L is essential – but it’s not the full story.

Directors often use the profit and loss report as their go-to document each month. It shows revenue, costs, and net profit – what more could you need?

Plenty, it turns out.

Here’s what the P&L won’t show you:

Cash position

You can be profitable on paper and still run out of cash. Without a rolling forecast and clear visibility over receivables and payables, you’re flying blind on short-term liquidity.

Margins by site or department

A top-line gross margin is useful, but not granular. Which locations are underperforming? Which product lines are eating into your profit? A P&L won’t tell you.

Trends in costs or labour efficiency

If you’re only looking at totals, you’ll miss early warning signs. Are staffing costs creeping up week by week? Are supplier costs jumping line by line? Without tracking these in detail, you won’t catch issues early.

Balance sheet movements

P&Ls don’t explain changes in your balance sheet – things like loan repayments, VAT liabilities, stock levels, or deferred revenue. You need separate reporting for that.

A monthly P&L is a starting point – not the whole dashboard.

To run a tighter, more informed business, you need layered reporting that looks beyond the surface.

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