Net Profit Explained for SMEs
Net profit is the money left after all business expenses have been deducted from income.
Include all costs
Rent, wages, stock, transport, packaging, bills, transaction costs and supplier payments all affect net profit.
Owner withdrawals are important
If the owner regularly takes money from the business, cash flow may suffer even when sales look strong.
Review net profit monthly
Daily profit is useful, but monthly net profit shows whether the business is truly sustainable.
Do not confuse cash with profit
Having cash today does not always mean the business is profitable. Bills and supplier payments may still be due.
Bizwazi reports help owners review sales, expenses and profit more clearly.
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Track sales, M-PESA, expenses, stock and daily profit in one place
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