SaaS income statement template
Looking for a snapshot of your SaaS business’s financial position? Generate an income statement in minutes with this free and easy-to-use template.
How to use the SaaS income statement template
- Tally your revenue: Start by entering your company’s total revenue within your desired time frame.
- Subtract your costs: Gather your COGS (Cost of Goods Sold), such as cloud hosting, infrastructure, and support costs.
- Know your net income: Finish populating the sheet and watch as your income statement appears.
Understanding your income statement
Sometimes called a profit and loss statement (P&L), an income statement can give you a pulse on your SaaS business’ financial health and allow you to track recurring revenue, manage expenses, and evaluate your growth over time.
What is a SaaS income statement?
An income statement or profit and loss (P&L) statement is a financial document that shows how much a business has spent and earned over a specific period of time — usually a fiscal quarter or year. The statement is used to understand a company’s profitability and identify areas where cost savings can be made.
What is included on a SaaS income statement?
While every P&L differs based on the type of business, there are a few major categories you’re likely to find on most profit and loss statements:
- Revenue: A P&L statement begins with revenue, or the money a business has earned from sales or other activities during the measured time period.
- Cost of goods sold (COGS): COGS is what it costs your company to deliver its core service or product.
- Gross profit: COGS is subtracted from revenue to determine gross profit, or a business’s profit before accounting for operating expenses.
- Operating expenses: These are expenses not related to delivering your core product or service.
- EBITDA: Earnings before interest, taxes, depreciation, and amortization, which measures a business’s ability to generate cash flow.
- Interest expense: Interest owed by a company borrowing money.
- Tax expense: The amount the business paid on its income tax for a given year.
- Net income: The amount of money a company has made after paying off all expenses.
- Loss: If expenses are higher than the business’s revenue, the business will generate a loss instead of a profit.
How do you analyze an income statement for a SaaS business?
Business owners should use a profit and loss statement to understand if their business is profitable or on the path to profitability. Comparing P&L statements over time can highlight trends in revenue and expenses.
What is horizontal analysis vs. vertical analysis?
- Horizontal analysis: Looks at changes over time within a specific line item on the P&L statement.
- Vertical analysis: Considers the size of expense items relative to a company’s revenue.
What are common mistakes when creating income statements for SaaS businesses?
- Miscalculating subscription revenue.
- Not including all costs.
- Incorrectly categorizing costs.
- Missing out on tax credits.
How often should you analyze your SaaS income statements?
Most businesses generate a P&L statement monthly, quarterly, and during tax season to assess their financial performance.
What is a pro forma income statement?
A pro forma income statement forecasts your company’s future revenue, expenses, and profits over a specific period based on historical data.
How are expenses forecasted on a pro forma income statement?
Expenses are forecasted by reviewing past costs, analyzing trends, and adjusting for expected changes in operations or market conditions.
Keep crunching your numbers
Profit margin calculator
See how close your business is to reaching profitability with our fast and easy-to-use profit margin calculators.
SaaS magic number calculator
Quickly get a pulse on how sticky your subscription-based service is with our intuitive SaaS magic number calculator.