What is a partner P&L statement?
A partner P&L statement, or partner profit and loss statement, is a key financial document used by partnership teams. This report typically outlines the revenues, costs, and expenses related to a specific partner during a specific accounting period, providing an overview of the partner’s profitability. It can also refer to a comprehensive financial overview of the company’s full partner program.
Whether it’s built for a specific partner or your full program, these are some common elements to include:
- Revenue: Outlines the total revenue generated through the partner program or per partner. It might further break down revenue by partner type, product, or region to provide a granular view.
- Cost of goods sold (COGS): Details the direct costs associated with providing products or services through partners. It includes expenses like product manufacturing, shipping, and distribution.
- Gross profit: Calculated by subtracting COGS from revenue, this figure represents the profit generated before considering operating expenses.
- Operating expenses: This section covers expenses related to running the partner program. It includes salaries, marketing costs, partner incentives and commissions, training, and any other operational costs.
- Net profit: This is the bottom-line profit after subtracting operating expenses from the gross profit, and it represents the program’s or partner’s profitability.
- Return on investment (ROI): An analysis of the return on investment for the partner or program, indicating whether the revenue generated justifies the expenses incurred.
Other things a partner P&L statement can report on include customer acquisition costs, average contract value, partner performance metrics, channel inventory, and revenue forecasts. This report is crucial for assessing the health and effectiveness of a partner program, identifying areas for improvement, and making informed decisions to optimize partner relationships and drive revenue growth.
Creating a partner P&L statement helps you, your company, and your partners better understand the financial health of your partnerships. It allows you to identify areas for improvement and make informed, data-driven decisions to optimize your partner relationships and drive growth.