Month-end guide
How to explain a Profit & Loss to a client who does not read it
Updated 13 September 2026
The statement is not the problem. The order is. Lead with the one number that changed, translate the account names into work the owner recognises, and hand back questions instead of theories.
Why they do not read it
A Profit & Loss is a list of accounts in the order your software prints them. The owner of a plumbing company thinks in vans, crews, jobs and the 2 invoices that have not been paid. Nothing in the statement is arranged the way they think, so they scan for 1 number, fail to find it, and close the file.
You cannot fix that by formatting the statement more attractively. You fix it in the note that goes on top.
Lead with 1 number, not 12
The first sentence names the single movement that matters this period, with direction and figure. Everything else is support. If you cannot pick one, the honest headline is that nothing moved, and that is a valid month.
First sentence, 3 shapes
Net income fell 4.3% to $33,530, even though you invoiced 5.3% more than last month. Revenue is up 9% to $214,300, and it went almost entirely to 2 accounts I want to ask you about. Nothing unusual moved this month. The one figure worth your attention is $14,200 sitting in receivables over 60 days.
Note the second half of each sentence. It gives the owner somewhere to go, which is what turns a report into a conversation.
Translate the account names
Account names are a filing system, not language. Say the account name once, then say the thing it describes. After 2 or 3 months the client starts using the account name themselves, and you can stop translating.
| On the statement | In the memo |
|---|---|
| Total income | What you invoiced this month |
| Cost of goods sold | What the jobs themselves cost you |
| Gross profit | What was left after paying for the work |
| Subcontractors | The jobs you sent out instead of doing in house |
| Repairs and maintenance | Keeping the vans and equipment running |
| Accounts receivable | Work you have done and not been paid for |
| Accounts payable | Bills you have received and not paid |
| Owner distributions | Money you took out of the business |
Never send a percentage on its own
“Advertising is up 200%” sounds like an emergency. “Advertising tripled to $6,300, up from $2,100” is a fact the owner can weigh in 2 seconds against what they remember spending. Percentages describe the shape of a change. Dollars tell the owner whether to care.
The reverse is also true. A dollar figure with no comparison is just a number from the statement, which they already have.
Give questions, not theories
The statement records that an account moved. It does not record why. When you write “the increase in subcontractor cost reflects a busier month”, you have put a guess in writing on your own letterhead, and the client will quote it back to you.
Ask instead. 3 questions per memo is the right number, and they should be questions only the owner can answer.
Questions that get answered
What drove the 36% increase in subcontractor cost this period? Was the advertising increase to $6,300 a one-off campaign, or the new monthly level? You have $14,200 in receivables over 60 days. Do you want me to send those reminders, or will you call them?
The last one is the most valuable sentence in the memo, because it converts the close into work the client asks you to do.
Before and after
Before. “Hi, please find attached the August financials. Let me know if you have any questions.”
After. “August is closed. You invoiced 5.3% more than July, at $159,600, but net income fell 4.3% to $33,530, because the jobs cost more to deliver. Subcontractors rose 36% to $24,600. Before I write the quarter up, was that a run of overflow work, or is it the new normal?”
Same close, same statements, same 4 figures. The second one is a reason to keep you.
What belongs on a call instead
Put anything with an unresolved figure on a call, and anything you would stand behind in writing in the memo. A memo that hedges in every sentence reads worse than a short one that says 4 things plainly and defers the fifth.
Close the same way every month: what you will do next, what you need from them, and a date.
Or have it written for you
Loopwork AI writes this note from the comparative Profit & Loss and Balance Sheet you already export. Your first memo is free and takes no card.