After this tutorial, you’ll know how to run a basic Profit and Loss Report in QuickBooks Online, as well as some advanced tips and tricks to get the most out of understanding your report.
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How to Get to Your Profit and Loss Report
The Shortcut Method
Step 1: On the QuickBooks dashboard (the home screen), go to the tile called Profit and Loss.
Step 2: Hover over the net income amount in the tile, at the very top. You’ll notice that your cursor becomes a hand.
Step 2: Click the net income amount. You’ll be taken to your Profit & Loss report (magic… I know).
The Sidebar Menu Method
Step 1: On the QuickBooks dashboard, click Reports on the left sidebar menu.
Step 2: Once you click Reports, you will see a list of Favorited Reports at the top. QuickBooks automatically defaults the Profit and Loss Report as one of your Favorited Reports, so you don’t need to go looking around for it.
Step 3: Click the report labeled Profit & Loss and you’re there!
If you want to run some other types of Profit and Loss Reports, take a look at the Business overview report list where you’ll see various types of Profit and Loss Reports.
QuickBooks automatically defaults your view of the report to the last month and on an Accrual accounting basis. If this is the report that you want to see, then hooray, you’re done! If not, keeping reading.
Customizing Your Profit and Loss Report
Step 1: Got to the top of the report and to the drop-down box under Reporting Period. Click on the down arrow. You’ll see a long list of reporting periods that you can run our report for. As you scroll down the list your options will go from current time periods to past time periods.
Step 2: Next to the reporting period drop down there are two boxes that contain the starting the ending dates of the report. The report time frame changes every time you select a reporting period. BUT you can also change the dates of the reporting period manually if you’d like to create a report for a custom date range.
Step 3: Adjust the accounting method. The Accounting method is going to directly impact the type of data that shows up on your report.
The cash accounting method means that you’re only showing money that has been received. This is actual cash that has been paid for your products or services. It doesn’t count open invoices because, while an open invoice is due to you, it is not real money that has landed in your bank account.
When you choose the Accrual accounting method, in addition to showing all the cash that has come into your business, you’ll also see unpaid income and expenses that have been billed. This will include open invoices, open bills you owe to others. In other words, anything you’re expecting to BE PAID or money that you are expecting to PAY TO OTHERS. Keep in mind, that you have to have entered this information into the system for it to appear on your report.
The method you choose depends on what you want to know about your business. If you just want to know how much cash you received in a time period, you will choose the cash method. If you want to know everything that you’ve been paid PLUS what you’ve billed for, you’ll choose the accrual method.
Step 4: Adjust the Display Columns by setting.
The Display columns by selection defines how you want your data displayed. As a default, the selection is set to Total Only, which means you’ll just see the total for every line on your Profit and Loss Report.
There are some very cool columns that you can display your report by. If you click the dropdown, you can see all of your options. For this tutorial let’s choose Months.
Step 5: Once you choose Months as your “display columns by” method, click Run Report.
Now you’ll see a column for each month in the reporting period with the ability to compare each month side-by-side. At the bottom of there is the total for the period of time that you’re running the report. You can use this report to look at your numbers month to month, compare your quarterly numbers, and even look at a week-to-week view.
Step 6: Go to Show non-zero or activity only, which is another drop down box. Your options are to show All Active rows, All rows, or Non-zero rows.
All Active rows are all of the categories in your system that are active and have transactions assigned to them.
All rows include rows that don’t have any data. If you have a row that doesn’t have a dollar amount, it will still show on the report. For example, say you have a line that says promotional expenses and you didn’t spend any money for promotional purposes. You will still see promotional expenses on your report with a zero total.
If there are categories that you’re tracking your zero-spending in, and you want to see that, I recommend showing all. However, what will also happen, is you will see deleted categories which can clutter up your Profit and Loss Report.
Non-zero is anything without a zero balance in it.
Step 7: The next thing option is Compare another period. This will compare the current report to another time period and show you the dollar and/or percentage difference.
If you’re using QuickBooks Simple Start, you will not have this feature, this is only for Essentials and Plus users.
Compare another period is REALLY useful because you can click the dropdown to compare your data to various filters and see how you’re business has grown and changed over time.
Previous period always refers to the Report period. So, if you ran this report for a year, it’s going to show you the year before. If you ran the report for the current month, it will show you the previous month.
Previous year shows you the Report period you originally selected compared to the year before. For example, if you ran a report for January 2019, the previous year will show you January 2018.
Finally you have the Year-to-date option. Year-to-date shows you what your current period is compared to all the money you’ve made this year to date. You’ll see how much of your total income for the year-to-date was made in a single time period. This is really helpful to see how your reporting periods have contributed to your profitability.
After you’ve chosen the comparison period, select HOW you want to see the comparison. You can choose to see it in dollars, percentages, or both.
Believe it or not, there are EVEN MORE ways that you can use the Compare Another Period feature in QuickBooks Online. I go into detail about how to do that in my Quick & Dirty QuickBooks course, but I do want to show you my favorite secret trick.
Check the box called % of Income under Compare another period. Once you check this option and click Run report, you’ll see what percentage of your total income each income category makes up for the reporting period. You’ll also see how much of your income each expense category is eating up.
Report Hacks for QuickBooks Users
If you’re using QuickBooks Simple Start, let’s talk about a few hacks, because you’re not going to have the Compare another period option.
One of the ways that you can hack it is by comparing your numbers month-to-month. At step 1 run the report for Last Month and adjust the date to include the previous TWO months. Then Choose Months under Display Columns by. Now you’ll see the monthly comparison. It will not show you that nice little column, with the breakdown of the dollar or percentage change, but you can do the math yourself…which is well worth skipping a monthly $10 or $15 upgrade.
The pencil icon by your business name opens up a few settings for you to show or hide your logo, as well as change the name of the report.
You can also add notes to the bottom of the report! You could make notes about things like expenses being a little higher than usual because you invested in something or your income dipping because of a vacation. This is SUPER helpful if you’re sending this report to other people, like a business partner or an investor, or even just someone who is helping you manage your finances.
You can export the report as a PDF or excel document. Exporting your report to an Excel file is fantastic if you’re making custom reports or income projections and need to adjust your numbers outside of QuickBooks.
This is just the tip of the iceberg when it comes to customizing reports in QuickBooks Online and I cover even more reporting features in my rouse Quick & Dirty QuickBooks.