MunshiProfit is what remains after you subtract the cost of the goods you sold and your running expenses from your sales: sales − cost of goods − expenses. A profit and loss (P&L) report shows that for a period, so you can see whether the shop really earns money. Many owners track sales closely and are surprised at month-end. This guide shows how to read the report without an accountant.
Sales are not profit
A shop can sell more every month and still earn less. Costs may have risen, a lot of the new sales may be udhaar that has not been paid, or expenses may have crept up. The P&L report puts all of it side by side.
The simple formula
| Line | Meaning |
|---|---|
| Sales | What you sold in the period |
| − Cost of goods | What the goods you sold cost you to buy |
| = Gross profit | What is left before running costs |
| − Expenses | Rent, wages, electricity, transport, repairs and so on |
| = Net profit | What you actually earned |
A worked example (illustrative numbers)
A small shop in one month:
- Sales: Rs 400,000
- Cost of goods sold: Rs 310,000
- Gross profit: Rs 90,000
- Expenses: rent Rs 25,000, wages Rs 30,000, electricity Rs 8,000, transport Rs 7,000, other Rs 5,000 = Rs 75,000
- Net profit: Rs 15,000
Sales of Rs 400,000 sounds impressive, but the shop kept 15,000. If wages rise by Rs 10,000, profit drops by two thirds. That is the kind of thing the report shows early.
How to get your profit estimate in Munshi
- Record everything first. The report is only as complete as your entries: sales, purchases and expenses for the dates.
- On Home, tap Reports.
- Choose the dates: a month, a quarter or your own range.
- Open Profit & Loss for an estimate, then the Expense report to see which categories use the most.
- Share the report as a PDF or an Excel file if your accountant or partner wants it.
Treat the result as an estimate. How closely it matches reality depends on how consistently you record, especially goods you buy and credit you give.
What to look at in the report
- The top expense categories. The biggest two or three are where savings matter most.
- Month against month. Is profit growing, flat or falling? A single month can mislead; a trend does not.
- Profit against udhaar. If profit looks healthy but cash is short, check how much of your sales is unpaid. See getting paid faster as a small business.
Common mistakes
- Leaving out small expenses. Tea, transport and repairs add up.
- Counting stock purchases as expenses and as cost of goods. Pick one treatment and stay consistent.
- Mixing household money in. Record household withdrawals separately, so profit is honest.
- Looking only at the total. Break it down by category and by month.
Next, see how to track business expenses in Pakistan and how to create business reports in Urdu and English. This is general guidance, not tax or accounting advice.