ShopMazProfit and loss for shopkeepers, explained simply
Understand margin, expenses and daily cash closing so you know if your shop is really making money.
Sales are not profit
Sales is the total money customers pay. Profit is what is left after you subtract what the goods cost you and what it costs to run the shop. A busy shop can still lose money if prices are too low or expenses are too high.
Gross profit and margin
Gross profit is the selling price minus the purchase cost of what you sold. Margin is gross profit divided by selling price, shown as a percentage.
Check margin by category. Fast items often have thin margins, so make sure slow items with better margins do not get ignored.
Subtract your expenses
Rent, electricity, salaries, transport, internet and repairs all reduce profit. Net profit equals gross profit minus expenses. Record expenses as they happen. If you only remember the big ones, your profit looks better than it really is.
Cash and credit are different
Money customers owe you is not in your drawer yet. Your report may show a profit while the cash is stuck in the credit ledger. Watch both numbers: profit tells you if the business works, cash tells you if you can pay bills tomorrow.
Close the day
At the end of each day, count the cash, compare it with what the records expect and write down the difference. A small difference that repeats every day usually points to a habit, such as giving change wrongly or forgetting to record a sale.
- Reports in the bottom bar shows sales and profit for the period you choose.
- Add costs under Expenses so profit is realistic.
- Business tools → Closing helps you check sales, cash and expenses at the end of the day.
Common questions
What is a healthy margin for a small shop?
It depends on the trade. Grocery margins are often single digits to low teens, while accessories and cosmetics can be much higher. Compare your own margin month to month rather than chasing a number from another shop.
Why is my profit lower than I expected?
The usual reasons are unrecorded expenses, discounts that were bigger than planned, expired or damaged stock and sales recorded at the wrong price. Start by reviewing expenses and stock adjustments.