How to create a profit and loss statement from bank statements

Short answer

You can build a cash-basis profit and loss (P&L) from bank statements by listing every transaction in the period, classifying each one as revenue, cost, expense or excluded, and totalling the categories. The key step is **excluding money that only moved**: transfers between your accounts, owner deposits and loans.

Step 1: Collect every statement for the period

Use the full tax or financial year. Missing one month is the most common reason a P&L is wrong.

Step 2: Classify each transaction

• **Revenue** — customer payments for goods or services.
• **Direct costs** — costs tied to delivering what you sold (stock, subcontractors).
• **Operating expenses** — rent, software, salaries, utilities, marketing.
• **Other income / other expenses** — interest, one-off items.
• **Income tax** — tax payments, shown separately.
• **Excluded** — transfers, loans, owner contributions and drawings.

Step 3: Calculate

• Gross profit = revenue − direct costs
• Operating profit = gross profit − operating expenses
• Net profit = operating profit + other income − other expenses − income tax

Step 4: Check direction and currency

Money in should not be an expense; money out should not be revenue (refunds are the exception to look at). Never add two currencies together without converting.

Doing it in NanoFora

Upload statements, open **P&L draft for filing**, choose your country and period, classify every line, then download a PDF draft. NanoFora will not build the draft until every line is reviewed, and it is clearly marked as a non-official estimate. See bank statement to profit and loss and the P&L explained.