Why is my profit number different than what shows in my bank account?

 

Question: Why is my profit number different than what shows in my bank account?

Answer: On your profit and loss statement (income statement), the payments that you make to yourself are not expenses. When you pay yourself, these transactions are called owners draws, and they will show up on your balance sheet. These transactions will not impact your bottom line profit, which is why the profit/loss on your income statement is different than the amount in your bank account.

*This applies if you’re a single member LLC or a sole proprietor

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Amy Northard, CPA

The Accountant for Creatives®
+ taxes + bookkeeping + consulting
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