P&L statements are like the fortune cookies of business owners. Everyone has one, and the more you crack it open, the more insights you uncover.
While it is common for the internal executive team to look at their P&L statement regularly, it’s rare that people open up their books to allow it to be reviewed by fellow business owners.
That’s precisely what The P&L Audit is all about.
This process is an example of a Deep Dive > Roundtable Discussion > Topical Discussion.
Typically, this process is done only by more senior Forums that have been together for a while because it involves a high level of vulnerability.
Here’s how it works.
Setup: Have everyone print out one copy of their P&L for every group member. The timeframe for the P&L can either be the prior year, prior quarter, or prior six months. While it does help to review each other’s P&L before the meeting, it’s only sometimes possible due to the time and comfort levels of sharing P&L statements electronically.
When: The P&L Audit is usually done during the Deep Dive part of the meeting.
How:
- Deep Dive Coordinator Set Up (1 mins)
- Person 1 walks through their P&L for 4 mins
- The group asks questions/gives feedback about the P&L for 6 mins
- Person 1 reflects on feedback and offers action steps if needed
- Person 2 (same process)
- Person 3 (same process)
- Repeat for each person
- Final thoughts (20 seconds per person)
The timing per person can be adjusted based on the needs of the groups. Some groups will do The P&L Audit at a retreat, spending up to 30 minutes per person and only doing a few at a time.
Running a P&L Audit is a great way to not only expose the group to a deeper level of vulnerability but also help each other better understand the group’s businesses.