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Profit and Loss Report

This guide explains how to generate and analyze Profit and Loss reports in Fiskl to understand your business's financial performance.

Understanding the Profit and Loss Report​

The Profit and Loss report, also known as an Income Statement, summarizes your business's financial performance over a specific period. It shows your revenue, costs, and expenses to help you determine whether your business is profitable.

Why is the Profit and Loss report important?

The P&L report helps you:

  • Determine if your business is making money
  • Identify areas where you can reduce costs
  • Fulfill requirements for tax filing and loan applications
  • Make informed business decisions based on financial data

Profit and Loss vs. Balance Sheet​

The Profit and Loss report and Balance Sheet serve different purposes in financial reporting:

The Profit and Loss report tracks your business's financial performance over a period of time. It starts with revenue and subtracts various costs and expenses to calculate your net profit or loss. Think of it as a video showing how your business generated or lost money during a specific timeframe.

The Balance Sheet captures your business's financial position at a specific point in time. It follows the accounting equation: Assets = Liabilities + Equity. This equation must always balance, which gives the statement its name. Think of it as a photograph of your financial status at a particular moment.

Key Components of the Report​

Your P&L report contains several important sections:

  1. Revenue: The total amount earned from your primary business activities
  2. Cost of Sales: Direct costs associated with producing your goods or services
  3. Gross Profit: Revenue minus Cost of Sales, showing funds available to cover operating expenses
  4. Operating Expenses: Costs incurred in running your business that aren't directly tied to production
  5. Operating Profit: Gross profit minus Operating Expenses, reflecting core business profitability
  6. Non-Operating Income and Expenses: Income or costs unrelated to your main business operations
  7. Net Profit or Loss: The final figure showing overall profitability after accounting for all income and expenses
Focus on Key Metrics

Monitor your Gross Profit and Operating Profit closely. These figures help you identify whether you need to adjust pricing, reduce costs, or improve operational efficiency.

Generating Your Report​

To create and customize your Profit and Loss report:

  1. Navigate to reports

    Click Accounting in the left menu, then select Reports and choose Profit and Loss.

  2. Select your date range

    Choose the date as of which you want to view the report.

  3. Customize display options

    Adjust the report using these options:

    • Compare periods side by side
    • Switch between Cash and Accrual accounting methods
    • Hide empty accounts to simplify the view
    • Divide large numbers by 1000 for easier reading
    • Show or hide unrealized foreign exchange gains and losses
    • Toggle between summary and detailed views

Comparing Periods​

You can compare up to three different time periods to track performance:

  1. Click Compare after selecting your initial period
  2. Choose additional periods to compare
  3. View differences shown in both monetary values and percentages

This comparison helps you identify trends, seasonality patterns, and unusual variances in your business performance.

Cash vs. Accrual Accounting​

Fiskl supports both accounting methods for your P&L report:

  • Cash: Records income when payment is received and expenses when paid
  • Accrual: Records income when earned and expenses when incurred, regardless of when cash changes hands
Which method should I use?

Learn more about Cash vs Accrual accounting and how to switch between them in Fiskl.

Analyzing Your Report​

To get the most value from your P&L report:

  1. Review regularly

    Conduct monthly or quarterly reviews to stay on top of your financial performance.

  2. Compare to previous periods

    Look for trends, patterns, and seasonality in your business operations.

  3. Calculate key ratios

    Determine metrics like gross profit margin and operating profit margin to assess efficiency.

  4. Investigate variances

    When you notice significant changes, explore the underlying causes.

  5. Use for forecasting

    Apply insights from your P&L to budget planning and financial projections.

Drill Down into Details

Click on any total in the detailed view to see all related transactions. This helps you investigate specific entries and understand the numbers behind your report.

Exporting and Sharing​

You can export your P&L report in multiple formats:

Export to spreadsheet:

  1. Click the export button at the top right of the screen
  2. Choose between Google Sheets or Excel format

Create a PDF:

  1. Click the print button at the top right of the screen
  2. Save as PDF or print a physical copy

All exported reports include a timestamp and the selected accounting method for reference.

Adding Notes​

To provide context or explanations for your financial data:

  1. Click the note icon at the top right of your screen
  2. Add your comments or explanations
  3. Your notes will be included when you export or print the report

Regular review and analysis of your Profit and Loss report helps you make informed decisions and drive your business toward greater profitability.