P&L Inquiry
When preparing the P&L, should we factor in the amounts we have already received from our clients, or should we only consider the outstanding amounts?
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P&L
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In the Profit and Loss (P&L) statement, you should include all revenue earned during the reporting period, regardless of whether you have already received payment or if the amounts are still outstanding. This means that the P&L reflects accrued income, which recognizes revenue when it is earned, not when cash is received. So, both amounts you have received and those that are still outstanding should be accounted for based on when the services were provided or products were delivered.