The profit and loss (P&L) sheet is another central part of your pitch deck. But what exactly should you include in it?
Well, good news – there’s a standard P&L format that investors are used to seeing. It's best to stick with the standard, so investors don't have to put in any extra mental effort to understand your numbers. Using the standard format also helps investors to easily benchmark you against other SaaS businesses.
Check out an example from SaaS Capital below.
Notion Capital recommends adding extra granularity to the Revenue section, incorporating separate lines for recurring revenue, usage-based revenue, and implementation fees, then summing these up into total revenue.
Breaking it down like this allows you to more clearly align your cost of goods sold (COGS) with different revenue line items. It also allows investors to dissect your business a little more and understand the financial drivers.
Next, a quick look at COGS. Here, it’s important to stay consistent with what other SaaS businesses are doing.
In particular, our experts recommend breaking the customer success line into two separate line items:
1) customer success/support for logo retention
2) customer success for expanding revenue.
The first type of customer success (logo retention) supports the recurring revenue in the previous section, making it a COGS item.
On the other hand, customer success activities more focused on cross-selling and upselling (which are actually sales activities) should be placed below the line, either as part of the sales or marketing lines or on their own line altogether.