What is a Profit & Loss Report?
The Profit and Loss Report (P&L) is a Report that shows your total Income and your total Expenses in a specific period of time. It’s a really useful Report as it shows you your net profit (or loss) based on your Income & Expenses, and that can be used to come up with some cost-cutting strategies!
This Report also goes by a few other names, so it might be referred to as an “Income Statement”, a “Statement of Operations”, a “Statement of Financial Results” or “Income & Expense Statement”. In FreshBooks, we call them Profit & Loss Reports.
You can run a Profit & Loss Report by doing the following:
- Go to the Reports section
- Select Profit & Loss under Accounting Reports.
There are a few things you're able to change when running the Profit & Loss Report. Click on the button next to the Report title, and you'll see some filters:
- Date Range - With the date range drop down, you're able to choose one of the preset ranges (This Year, Last Year, This Quarter, Last Quarter) or choose a Custom date range so you're able to find exactly what you're looking for
- Income - You can choose to run the Profit & Loss Report with either Billed or Collected income:
- Billed - This will show you income info for everything that has been sent out, whether the Invoice has been paid or not
- Collected - This will show you income information only for those Invoices which have been paid
- Group By - Choose to see your Income and Expenses by Month or by Quarter
- Currency - If you've either billed or tracked Expenses in different currencies, you can toggle the currency of your Profit & Loss Report here
The Income section of the Report will display your sales for the period. If you run the report in Collected (Cash-Based), you can click on any of the blue numbers under any period to see the specific payments that make up the total.
The Cost of Goods Sold will display the sum of Expenses that have been rebilled to your Clients. You can learn more about COGS and how to mark Expenses or Categories as COGS here.
The Less Expenses section will display all of your Expenses for the period. The sum of your Expenses are easily viewed in the Total Expenses row.
Net Profit is the total amount earned (or lost) after Expenses. It is worked out by subtracting your Total Expenses from your Gross Profit.
How does the Profit & Loss Report handle multiple currencies?
If you’ve sent Invoices in multiple currencies, you can use the Currency toggle under Filters to run your Profit & Loss in different currencies.
Where are the Sales Taxes?
How do Deposits work on the Profit & Loss Report?
Because Deposits are made to prior to the delivery of goods/services (in most cases), they are not initially recorded as Income.
When a Deposit is paid (or additional payments are made), only the paid amount will appear on both Collected and Billed settings.
How do I get my P&L to display monthly totals?
- Click on the filter icon next to the Profit and Loss title at the top left
- Under Group By, select Month
- Click Apply
- On the report, click on the Enlarge button in the top right corner, and you'll see a landscape view of the P&L with all the months visible.