Profit & Loss Report

Overview

The Profit & Loss (P&L) report shows how your business is performing over a selected period—what you earned, what you spent, and what’s left over.

Also called an Income Statement, it’s one of the most important reports you can run as a business owner. It helps you understand whether your business is actually profitable—not just how much cash is in your bank account.

Why the Profit & Loss Report Matters

Your bank balance shows how much cash you have right now. Your P&L shows whether your business is profitable—and those two things aren’t always the same.

For example:

You might have a high bank balance because a client paid early
Or a low balance because you prepaid a large expense

The P&L removes that timing noise and shows your true financial performance.

Use the Profit & Loss report to:

Understand overall business performance
Track income and control expenses
Prepare for taxes (including Schedule C)
Identify trends and patterns in revenue or spending
Share financials with accountants, lenders, or partners

Understanding Your Profit & Loss Report

Your Profit & Loss Report includes two main sections:

Top Chart

Income (green): Money earned
Expenses (purple): Money spent
Net Income (red line): Profit (or loss) over time

This gives you a quick visual of how your business is trending month to month.

Summary Table

Breaks down rows by income and expenses by Category, Account, Tag, or Payee
Shows column totals across time, accounts, clients, and more
Use the Category and Month controls above the table to customize how rows and columns are displayed
Helps you understand where your money is coming from—and where it’s going

When to Use It

Review your P&L regularly to stay in control of your business.

Monthly reviews let you catch problems early and make adjustments before they compound. Quarterly and annual statements are useful for longer-term trend analysis and are required for most loan applications.

Recommended cadence:

Monthly — Review expenses, confirm income is on track
Quarterly — Compare and identify trends and adjust strategy
Annually — Prepare taxes and share with your accountant

How to Run a Profit & Loss Report

Go to Reports and click the Profit & Loss report card.
In the business selector (top left), choose which entities to include. You can select:
- A single business or multiple businesses
- Personal finances
- Any combination of businesses and personal finances together

This is especially useful if you want to see all of your financial activity in one view, or if you need to keep businesses separate for tax or legal reasons.

Select a time frame (month, quarter, year, or custom)

Apply Filters to focus the report on specific areas of your finances (optional)

Use Category and Month (top right) to adjust how data is grouped

Review the chart and category summary below

Use Filters to Drill Deeper

Filters help you drill into your data. For example:

View a single income stream (e.g., consulting vs. product sales)
Analyze a specific expense (e.g., travel, software, subcontractors)
Limit results to certain accounts or businesses

Your report updates instantly as you change selections, so you can explore different views without losing your work.

Save, Export, or Print a Report

Once you’ve set up a report you’ll use again:

Click the ⋮ (three-dot menu)
Select Save as new report
Name your report (e.g., Monthly Review or Annual Tax P&L)

Your saved report appears as a tab at the top of the Reports page and on the Reports dashboard in Saved Reports.

From the same menu, you can also:

Export — Download for spreadsheets or sharing
Print — Create a physical copy

Note:

Reset report clears your current view but does not delete saved reports

Choose Your Accounting Method

Your Profit & Loss report can be viewed using either Cash basis or Accrual basis accounting. This setting changes when income and expenses appear in your report.

To switch between methods:

Click the ⚙️ (settings icon) above the report table
Select Cash basis or Accrual basis

What’s the difference?

Cash basis (most common for small businesses)

Income appears when money is received
Expenses appear when they are paid
Best for understanding actual cash flow

Accrual basis

Income appears when it’s earned (e.g., when you send an invoice)
Expenses appear when they’re incurred (even if not yet paid)
Best for understanding true business performance over time

When to use each

Use Cash basis for day-to-day tracking and tax prep (most Schedule C filers)
Use Accrual basis if you want a more complete picture of revenue and obligations, or if your accountant requires it

Tip:
If your numbers look different than expected, check your accounting method first—it’s one of the most common reasons totals change.

Examples

Freelance designer checking quarterly profitability
Jamie runs a solo design business and works out of a home office. At the end of Q2, she runs a P&L for April–June, selecting her business only. She can see that her income was up 20% compared to last quarter—but so were her software subscription costs. She uses a filter to isolate the Software expense category and discovers she signed up for three tools she barely uses. She cancels two of them before Q3.

Tax prep for a side business Marcus has a W-2 job and a small photography business on the side. At year end, he runs the P&L for January–December. He filters by business accounts to confirm only business income and expenses are included, then saves the report so he can share the settings with his accountant. She runs the same saved configuration to gather what she needs for his Schedule C.

Preparing for a business loan Priya and her husband run a landscaping company and are applying for a small business loan. They run P&L reports for the current year and the prior year to show the bank. The reports show steady revenue growth and decreasing supply costs—exactly what the lender wants to see. Because they had been saving monthly P&Ls all year, pulling that history together took minutes, not hours.

Guidelines for Use

Run your P&L monthly. Small shifts over time can signal bigger underlying trends. Waiting until year-end makes it harder to act on what you find.
Compare periods side by side. Month-over-month or quarter-over-quarter comparisons help you identify trends and highlight problem areas.
Keep your categories accurate. A P&L is only as useful as the data behind it. Review expense categories regularly to make sure personal expenses aren't mixed in with business ones, and that all income is captured.
Use your P&L alongside your bank balance—not instead of it. It's common for a business to have cash in the bank even when the P&L shows a loss. The two reports answer different questions and are most useful together.
Save reports you run repeatedly. Named, saved reports help you build a consistent review habit and make it easy to share your financials with an accountant, lender, or partner when the time comes.

Tips and Notes

Tip:
If your P&L shows a profit but your bank balance is low, you may have unpaid invoices. Follow up to close the gap.

Tip:
Create a saved year-end P&L at the start of the year so it’s ready for tax season.

Note:
Partial invoice payments are reflected based on the amount received—not the full invoice. Your P&L updates automatically as payments are completed.