Simple P&L for a facial harmonization clinic
Quick facts
- Goal
- Show, month by month, whether the clinic makes or loses money and why.
- Structure
- Revenue, deductions, variable costs, contribution margin, fixed expenses and net result.
- Basis
- The P&L usually follows accrual accounting; the cash flow shows what came in and went out.
- Common mistake
- Mixing the owner's salary, personal withdrawals and profit on the same line.
Many owners of orofacial harmonization (HOF) clinics know how much they billed in the month, but not how much was left over. The gap between the two is where the surprises live: billing grows and cash stays tight, profit "disappears" without explanation, the owner's withdrawal ends up being what balances the books. The tool that organizes this is the DRE (the income statement, or P&L), and a simple version fits in a spreadsheet.
This guide shows how to build a lean management P&L with the typical HOF lines, how to fill it in, how to read it and how to avoid the most common mistakes. It is a management model for making decisions and does not replace official accounting. Ask your accountant to validate the classifications. For the concept, see DRE and, for the flow of money in and out, cash flow of the HOF clinic.
What is the structure of a simple P&L?
The layout has seven blocks, always in the same order:
| Block | What it contains |
|---|---|
| 1. Gross revenue | Everything sold in the month, by type of service |
| 2. Deductions | Taxes on sales, refunds and discounts granted |
| 3. Net revenue | Gross revenue minus deductions |
| 4. Variable costs | Products, disposables, card fees, commissions |
| 5. Contribution margin | Net revenue minus variable costs |
| 6. Fixed expenses | Rent, staff, systems, fixed marketing, owner's salary |
| 7. Net result | Contribution margin minus fixed expenses |
The logic is that of a staircase: each line shows what is left after what came before. See the concept in contribution margin.
Which typical HOF lines should you include?
Adapt them to your clinic, but these lines usually appear:
Gross revenue
- Assessment consultations
- Botulinum toxin
- Hyaluronic acid fillers
- Collagen biostimulators
- Threads and other procedures
- Follow-ups and reviews that are charged for
- Sales of skincare products, when applicable
- Other revenue
Separating by type lets you see which contributes the most. See profit ranking by procedure in HOF.
Deductions
- Taxes on the service invoice. See service invoices at the HOF clinic and Simples Nacional (Brazil's simplified tax regime) for the HOF clinic
- Discounts granted (recorded separately so you can see the habit)
- Chargebacks and refunds
Variable costs
- Injectable products used
- Disposables. See disposable supply cost per patient
- Card terminal fees. See card terminal fee
- Commissions for partner professionals. See partner professional commission
- Product losses and expirations
Fixed expenses
- Rent and building fees, electricity, water, internet
- Staff salaries and payroll charges
- Management, scheduling and patient record software
- Fixed marketing (agency, tools)
- Accountant, legal, insurance and licenses
- Equipment installments and maintenance
- Owner's salary. See the clinic owner's salary
How to fill it in, in practice?
A routine of one afternoon a month:
- Export the month's sales from the management system or the cash spreadsheet.
- Classify each sale by type of service. It does not need to be perfect, it needs to be consistent.
- Add up the deductions: taxes, discounts granted, chargebacks.
- Work out the variable costs from the month's purchases and consumption. If inventory changed a lot, adjust to actual consumption.
- Add up the fixed expenses based on statements and contracts.
- Calculate the contribution margin and the net result.
- Compare with the previous month and with the same month last year.
Accrual or cash: which one to use?
The management P&L usually follows accrual accounting: a service provided counts as revenue in the month it was done, even if payment is in installments. Cash flow shows the money that actually comes in and goes out, on the day it happens. In clinics with a lot of card installments, the difference is big: the month's revenue can be high while cash is low.
| View | Shows | Useful for |
|---|---|---|
| P&L on an accrual basis | The month's economic result | Knowing whether the business is profitable |
| Cash flow | Money in and out | Knowing whether there is money to pay the bills |
| Both | The full picture | Deciding on investment, withdrawals and pricing |
Understand the difference in cash and accrual accounting and see the impact of installments in advancing card receivables at the clinic. Ask your accountant how to treat installments and advance payments in your P&L.
How to read the P&L?
You do not need to be an accountant. Five questions are enough:
Always compare the same months across different years, because of seasonality. And track the HOF clinic indicators alongside it.
Which mistakes show up most?
- Using billing as profit. Billing is the top of the staircase, profit is the bottom.
- Not recording discounts and losing track of how much the clinic gives up. See discount policy.
- Forgetting annual expenses, such as property tax, business permit and insurance. Divide by 12 and post them monthly.
- Counting product purchased, not product consumed, without adjusting inventory.
- Not separating investments (equipment purchases) from the month's expenses.
- Leaving it for "when there is time." A P&L without a monthly routine stops existing.
How to use the P&L to decide on pricing, scheduling and investment?
The number is only worth something if it becomes a decision. Three practical uses, all with the same method: look at the line that weighs the most and ask what can change.
| If the P&L shows... | Questions to ask | Possible paths |
|---|---|---|
| Low contribution margin | Does the price cover product, disposables, fees and taxes? Is there too much discounting? | Review the price list, discount policy and suppliers. See pricing per ml |
| High fixed expenses for the billing | Is the structure bigger than the schedule? | Raise occupancy or cut the structure. See cost of the clinical hour |
| A result that swings a lot | Is there seasonality or dependence on a few patients? | Plan a cash reserve. See cash reserve of the HOF clinic |
| A steadily positive result | Is there room to invest or take out profit? | Set a distribution rule, without compromising cash |
Before any large investment, such as equipment or an expansion, simulate the effect on the P&L: the new fixed expense must be covered by the expected additional margin, using conservative assumptions. See the equipment investment return calculator.
What if the clinic is small and short on time?
A minimal version of the P&L fits in ten lines and one hour a month: gross revenue, discounts, taxes, products, disposables, card fees, commissions, fixed expenses (added together), the owner's salary and the net result. It is less detailed, but enough to spot a trend. Over time, break out the lines that weigh the most. What matters is keeping the same format month after month, because comparison is worth more than the precision of each line.
A simple P&L done every month is worth more than a sophisticated report done once. It turns "I think it's going well" into "I know where we stand," and it is the first step toward decisions on pricing, scheduling and investment based on numbers instead of gut feeling.
Frequently asked questions
What is a P&L (DRE) and what is it for in a clinic?
The DRE is an income statement: a table showing revenue, costs and expenses for a period and the bottom line. It tells you whether the clinic is making a profit or a loss and where it comes from.
What is the difference between a P&L and cash flow?
The P&L organizes results on an accrual basis, that is, when the service was provided and the cost occurred. Cash flow shows when money came in and went out. The two complement each other.
Do I need an accountant to build the P&L?
For the official accounting, yes. A simple management P&L can be built by the clinic itself in a spreadsheet, with the accountant's help to validate the classifications.
Where does the owner's salary go in the P&L?
As a fixed personnel or administrative expense, separate from profit distribution. The owner's salary pays for work; profit pays for capital.