P&L Targets - Set Benchmark Percentages

P&L Targets

P&L targets record the percentages your business is aiming for -- what COGS should be, what marketing should cost, what net profit should land at. On their own they are a statement of intent. Their real job is to give Flow AI a benchmark, so that when you ask how the month went it can answer against your plan instead of against nothing.

Set them at Dashboard → Settings → P&L Targets.

What you can set a target for

Seven line items, each expressed as a percentage of revenue:

Targets are stored as either a percentage or an absolute amount. The settings page only writes percentages, which is the right choice for almost every use -- a percentage target stays meaningful as the business scales. A percentage target must sit between -100 and 100.

Each line shows the target currently in force, an input to set or update it, and a delete control. Deleting a target drops the line back to "no target" until you set a new one.

Effective dates

Every target carries an effective from date, and the active target for a line item is the most recent one whose effective date has already passed.

This means targets are a history, not a single mutable value. Raising your net profit target from 8% to 12% in March does not rewrite January -- January keeps the 8% target it was actually run against.

The settings page always stamps the effective date as today; it does not offer a date picker. Back-dating a target, and the notes field that records why a target changed, are supported by the underlying data model but are not exposed in the settings UI today.

What targets currently affect

All seven targets feed the context that Flow AI reads before answering, each paired with your actual figure, the gap in percentage points, and whether the line is on track, above, or below. With targets set, questions like "how did last month go?" or "is my ad spend too high?" get answered against your own benchmarks rather than generic industry figures.

On screen, only one target renders today: Net Profit % appears as a variance pill on the Net Margin card at the top of the P&L page, with your target repeated underneath it. The pill reads "on track" when the actual is within 1.5 percentage points of target, and otherwise shows the gap as +2.3pp or -4.1pp. The other six targets do not yet render anywhere in the dashboard, and the daily breakdown has no variance column.

No target triggers an alert. If you want to be told when a metric moves sharply, use anomaly alerts, which watch for deviations rather than for target misses.

Choosing targets

If you have no baseline yet, run a few months in MerchantFlow first and set targets slightly better than your trailing average -- a target you have never hit teaches Flow AI to call every month a failure.

A workable starting frame for a typical DTC store:

• COGS % -- what you need it under for the rest of the P&L to work
• Marketing % -- derive it from your target MER: a 3.0 MER implies roughly 33% marketing
• CM3 % -- the one to watch, since it is the last line before fixed costs
• Net Profit % -- the number the business is actually run for

Revisit them when your cost base changes: a supplier price change, a new fulfillment contract, or a shift in channel mix all move the achievable range.

Common questions

Do targets change any calculated figure? No. They are benchmarks, read alongside your actuals. Nothing in the P&L is computed from them.

Can I set a target for a past period? Not from the settings page -- saving always stamps today's date. What you already saved stays effective for the periods before your next target takes over, so the history builds itself from the moment you start setting targets.

Why is my target not being used in an AI answer? Confirm the target's effective date is in the past. A target dated in the future is stored but not yet active -- only the most recent target whose effective date has already passed counts.