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. 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”.
You can run a Profit & Loss Report by doing the following:
- Go to the Reports section
- Select Profit & Loss under Accounting Reports.
To adjust your view of the Profit & Loss Report, click on Filters under Settings. From there, you can change:
- Reset all - Click on this link to restore the filters back to the default settings
- Date Range - Choose from This Year, Last Year, This Quarter, Last Quarter, or Custom to enter a specific date range (or if you’ve changed your Fiscal Year End date, choose from the extra options)
- Income - Run the Profit & Loss Report by either Billed (Accrual) or Collected (Cash-Based) 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 - Toggle between multiple currencies
The Profit & Loss Report is broken down into several sections, making it easy to see where your totals come from:
- Sales - Displays the total of all Invoices (if set to Billed) or Payments (if set to Collected), as well as Other Income entries and Credit Notes
- Invoice / Payment
- Set to Billed - Displays all Invoices with Issue Dates during the date range (except for Invoices with Deposits until 0.01 more than the Deposit has been paid). Credit Notes are deduced from Sales instead
- Set to Collected - Displays all Payments including those paid with Credits made during the date range, click on the total to see the specific Invoices or Payments
- Invoice / Payment
- Other Income - Displays the total of all Other Income entries logged during your date range, click on the total to see the specific entries
- Cost of Goods Sold (COGS) - Displays the total of Expenses marked as COGS (including Categories marked as COGS)
- Set to Billed - Displays all created Expenses and Bills during this date range, with totals for each Expense's Category
- Set to Collected - Displays all created Expenses and Bill Payments during this date range, with totals for each Expense's Category
- Click on the total next to a Parent Category or Subcategory to see the specific Expenses/Bills
- Custom Expense Accounts created by your Accountant are not clickable, export out your General Ledger to see the specific Journal Entries making up that total instead
- Expense Refunds from Bank Rec will be reflected in the Total Expenses only (individual amounts next to each Category is for Expenses only)
- The total amount earned (or lost) after Expenses, by subtracting your Total Expenses from your Gross Profit
Clicking More Actions in the top right will give you the option to Export for Excel, or Print your Report.
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?
Sales Taxes are not included in the Profit & Loss Report, so you don’t overstate your Income. This information can be pulled from the Sales Tax Summary Report and your Invoice Details Report. Note that when you click on any total in the Less Expenses section, the list of filtered Expenses that appear may include Sales Taxes if applied to any of these Expenses.
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.