Many shop owners in Sri Lanka count the cash at closing time and call it the day's earnings. It is an easy habit, and a costly one. The cash in your drawer includes money that belongs to your suppliers, your landlord and your staff. Your real profit is what is left after all of them are paid.
Here is a simple, accountant-approved way to work out your actual daily profit, with a worked example in rupees.
Gross profit = Sales - Cost of goods sold
Net profit = Gross profit - Daily overheads
Here is an illustrative example. Replace the figures with your own.
| Item | Amount (Rs.) |
|---|---|
| Today's sales (cash, card and credit) | 85,000 |
| Cost of the goods sold | (68,000) |
| Gross profit | 17,000 |
| Daily share of overheads (see below) | (6,000) |
| Net profit for the day | 11,000 |
The daily overhead figure comes from monthly costs:
| Monthly overhead | Amount (Rs.) |
|---|---|
| Rent | 60,000 |
| Salaries (2 staff) | 90,000 |
| Electricity, water and internet | 15,000 |
| Transport and other | 15,000 |
| Total | 180,000 |
| Days open per month | 30 |
| Daily overheads | 6,000 |
So although Rs. 85,000 passed through the counter, the shop earned Rs. 11,000. That is the number to compare day to day.
Divide gross profit by sales: Rs. 17,000 / Rs. 85,000 = 20% gross margin. Track this every week. If it drops, something is wrong: a supplier raised prices and you did not, stock is going missing, or staff are giving unrecorded discounts.
This trips up many owners. If you buy an item for Rs. 100 and sell it for Rs. 125:
If you think you are making 25% but price on markup, your real margin is lower than you expect. Always plan with margin.
Doing this by hand every evening is hard to keep up. Excel helps, but only if every sale and cost price is entered correctly. A POS app does it automatically: each sale is recorded with its cost price, overheads are entered once a month, and the daily profit & loss report is ready at closing time.
That is exactly how VeeraOne's profit & loss report works. It accounts for overheads, so you see what you actually made, not just what you sold. To keep your cost of goods sold accurate, you also need good stock records. Our guide to stock management for small shops covers that.
It depends heavily on what you sell. Groceries and essentials usually run on thin margins with high volume, while items like cosmetics, accessories or prepared food often carry higher margins. The most useful benchmark is your own margin over time: track it weekly and investigate any drop.
Both. Daily figures catch problems quickly. Monthly figures are what your accountant and the tax authorities need.
Yes. Without cost prices you can only see sales. Start with your top-selling items and add the rest over time.
Sales, stock, staff logins and daily profit & loss in one simple app. Free plan, no card required.
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