The Profit & Loss Report (commonly known as P&L) is along with your balance sheet and trial balance one of the most crucial reports when running a business. A Profit & Loss Report lists your turnover less your cost of sales to give you your gross profit. Expenses are then subtracted from your gross profit to give you your net profit.
Running the Report
Access your Profit & Loss report by going to Tools & Reports > General Reports > Profit & Loss Report. Using the date selectors, select the start date and end date for the report. P&L reports are usually run for financial years, meaning your start date should usually be the financial year start and the end date would be the last day of your financial year. If required, tick the box to show a breakdown of each product or sub-outgoing type you've set up. When ready, click the Next button.
Understanding the Report
The next page of your report will list your whole P&L. It will give you a total of how much each nominal code has made (or lost) over the period you've selected. By totalling all these figures and subtracting the appropriate amounts you will be left with a gross profit and a net profit.
Nominal Code in the wrong section
If you've noticed that you've got a nominal code in turnover when really it should be in expenses then you've misclassified the nominal. You can easily correct this by clicking the Edit Turnover, COS & Expense classifications link in the bottom right of the P&L report. From the next page, classify your nominal code using the selector.
Nominal Code should be on the Balance Sheet
If you've got a nominal code on your P&L report when really it should be on your balance sheet then you've misclassified the nominal. You can easily correct this by clicking the Edit Turnover, COS & Expense classifications link in the bottom right of the P&L report. From the next page, classify your nominal code using the selector to select Balance Sheet and click Update. You will then need to go into Tools & Reports > General Reports > Balance Sheet > Edit Classifications > Change the nominal to be an appropriate balance sheet item.