Running the Profit & Loss report

The Profit & Loss report (also called the Income Statement) shows how much money your business made or lost over a specific period, such as a month, quarter, or year. It answers the question: "Did we make a profit?" By reviewing this report regularly, you can identify which parts of your business are profitable and where you might need to cut costs.

Before you start

• You need permission to view financial reports (ask your administrator if you don't see the Reports menu).
• Choose a date range: a Profit & Loss report covers a period (e.g., January 1 to January 31), not a single day.
• Ensure all invoices, bills, and expenses have been posted to the general ledger.

Steps

1. Go to Reports and look for the Financial Statements or Profit & Loss section.

   Open Reports

2. Click Profit & Loss or Run Profit & Loss Report.

3. Choose your start date and end date. This is the period for which you want to see income and expenses (e.g., June 1 to June 30).

4. (Optional) Filter by department, cost center, or other criteria.

5. Click Run Report or Generate.

6. Review the report. It will typically show:

   • Revenue or Sales (money coming in)
   • Cost of Goods Sold (COGS) (direct production costs)
   • Gross Profit (Revenue minus COGS)
   • Operating Expenses (salaries, rent, utilities, etc.)
   • Net Income or Net Profit (the bottom line: profit or loss after all expenses)

Accounting impact

Every invoice posted increases Revenue. Every bill or expense posted increases Expenses. The Profit & Loss automatically calculates the difference. Discounts and refunds reduce Revenue; returns reduce COGS.

Tips & common mistakes

• Period is critical: A Profit & Loss for June 1–30 will differ from one for June 15–July 14 because they cover different transactions.
• Don't confuse with Balance Sheet: Profit & Loss measures performance over a period; Balance Sheet shows financial position at a point in time.
• Review monthly: Many businesses struggle because they only review P&L once a year. Monthly review helps you catch problems early.
• Investigate negative values: If a line shows an unexpected loss or expense, drill down to see which transactions caused it.

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