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Why Your Profit & Loss Statement Matters (Even If You Hate It)

A Must-Read for Busy AFH Owners Who Avoid the Numbers


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If you run an Adult Family Home (AFH), chances are you didn’t get into this work because you love spreadsheets.


You’re focused on care, not accounting — and the words “Profit & Loss statement” might make your eyes glaze over.


But here’s the truth:


Your Profit & Loss (P&L) statement is one of the most powerful tools you have to run a successful, sustainable AFH.


And ignoring it? That can cost you money, missed opportunities, and serious stress.


Let’s break it down simply — no jargon, no overwhelm.


What Is a Profit & Loss Statement?

A P&L (also called an income statement) shows:

  • How much money your business brings in (revenue)

  • How much money your business spends (expenses)

  • What’s left over as profit or loss


It’s usually broken down by month, quarter, or year. And while it sounds like something your accountant might love, it’s exactly what YOU need to make smart decisions.


Why It Matters for Your AFH

1. It Tells You If You’re Really Profitable

  • Just because money is coming in doesn’t mean you’re making money.

  • Your P&L tells you if you’re running at a profit — or just treading water.


2. It Helps You Catch Red Flags Early

  • Are your groceries costing more than usual?

  • Is your payroll eating up 80% of your income?

  • Are you spending more than you’re making?


Your P&L will show you trends — before they turn into big problems.


3. It’s Required for Loans or Grants

  • Want a business line of credit? Equipment loan? Expansion funding?

  • Lenders always ask for your P&L — and it better be accurate and up to date.


4. It Makes Tax Time 100x Easier

  • When your P&L is current, your taxes are faster, cleaner, and less stressful.

  • You’re less likely to miss deductions, overpay, or file with mistakes.


What Should Be on Your P&L?

For AFH owners, a good P&L includes:

  • Resident payments (private pay, Medicaid waiver, etc.)

  • Wages and payroll taxes

  • Food, supplies, utilities, and rent/mortgage

  • Licensing fees, insurance, and training costs

  • Professional services (bookkeeping, taxes, consultants)


The clearer your categories, the more useful your P&L becomes.


What Happens When You Don’t Have One?

  • You rely on gut feelings instead of data

  • You guess when making big decisions (like hiring or expanding)

  • You risk overspending or undercharging

  • You miss out on planning opportunities to reduce taxes


In short: You run your business in the dark.


Final Thought

You don’t have to become an accountant. But you do need to know your numbers.


A clean, consistent Profit & Loss statement gives you the confidence to:

  • Make decisions

  • Set goals

  • Pay yourself

  • And grow your AFH with clarity, not chaos


Need help building or understanding your P&L?


I help AFH owners review their finances, clean up their books, and make their numbers work for them — not against them.


Email: christina@acuitytaxgroup.com or Call: 564.888.1687


Let’s take the mystery out of your money and turn your P&L into a powerful business tool.

 
 
 
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