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Accounting | How To

How To Run a Profit and Loss Report or Income Statement in QuickBooks Online

Updated October 20, 2022

Tim Yoder, Ph.D., CPA

REVIEWED BY: Tim Yoder, Ph.D., CPA

Tim is a Certified QuickBooks Time (formerly TSheets) Pro, QuickBooks ProAdvisor, and CPA with 25 years of experience. He brings his expertise to Fit Small Business’s accounting content.

 

WRITTEN BY: Mark Calatrava

Published July 4, 2022

Mark has researched and reviewed accounting software at Fit Small Business since 2019 and has developed an extensive knowledge of accounting software features and how unique business needs determine the best accounting software.

Published July 4, 2022

This article is part of a larger series on Accounting Software.

Learn More With Our QuickBooks Online Course
Explore the chapters in the guide.
  1. How to Set Up QuickBooks Online
  2. Part 1: Setting Up QuickBooks
    1. How to Set Up Company Information
    2. How to Customize Invoices, Sales Receipts & Estimates
    3. How to Set Up Invoices, Sales Receipts & Estimates
    4. How to Set Up Products and Services
    5. How to Set Up Messages
    6. How to Set Up Statements
    7. How to Set Up Expenses
    8. How to Set Up Advanced Settings
  3. Part 1: Setting Up QuickBooks (Cont.)
    1. How to Import Bank Transactions
    2. How to Import Credit Card Transactions
    3. How to Set Up Multiple Users
    4. How to Set Up the Chart of Accounts
    5. How to Set Up the Products and Services List
    6. How to Set Up Customers
    7. How to Set Up Vendors
  4. Part 2: Managing Sales and Income
    1. How to Create Estimates (Quotes or Bids)
    2. How to Create and Send Invoices
    3. How to Receive Payments
    4. How to Create & Send Sales Receipts
  5. Part 3: Managing Bills and Expenses
    1. How to Write & Print Checks
    2. How to Enter Bills
    3. How to Pay Bills
  6. Part 4: Managing Banking Transactions
    1. How to Enter Banking Transactions Manually
    2. How to Manage Downloaded Banking Transactions
    3. How to Record Bank Deposits
    4. How to Transfer Funds Between Bank Accounts
    5. How to Handle Bounced Checks From Customers
    6. How to Process Bank Reconciliation
  7. Part 5: Managing Business Credit Card Transactions
    1. How to Enter Business Credit Card Transactions Manually
    2. How to Manage Downloaded Business Credit Card Transactions
    3. How to Enter a Credit Card Refund
    4. How to Reconcile Business Credit Card Accounts
  8. Part 6: Managing Credit Card Sales
    1. How to Manage Credit Card Sales With QuickBooks Payments
    2. How to Manage Credit Card Sales With a Third-party Credit Card Processor
  9. Part 7: Set Up and Manage Payroll
    1. How Set Up and Run Payroll
    2. How to Manage Payroll Tax
    3. How to Add Historical Payroll Data
    4. How to Set Up Automatic Deposits
    5. How to Print Payroll Checks
    6. How to Run Payroll Reports
    7. How to Reconcile Payroll Liabilities
  10. Part 8: Reporting in QuickBooks Online
    1. How to Run a Profit and Loss Statement
    2. How to Run a Balance Sheet Report
    3. How to Run a Statement of Cash Flows
    4. How to Run an A/R Aging Report
    5. How to Run an A/P Aging Report
Quickbooks Online

In this article, you’ll learn how to run a profit and loss (P&L) statement in QuickBooks Online. A P&L report, also called an income statement, consists of income, expenses, and net profit over a specific period. This guide will teach you how to set up basic options for the P&L report and how to customize it further by setting up filters and adding specific rows and columns and special headers and footers.

We developed a series of free QuickBooks Online tutorials, which includes this course, to help you learn the ins and outs of QuickBooks, our highest-rated small business accounting software. You can log in to your own account and follow the steps illustrated to better understand our guide. If you don’t have an account, QuickBooks gives you the option to sign up for a 30-day free trial or 50% off for three months.

Visit QuickBooks Online

Step 1: Navigate to Profit and Loss

To create a new P&L report, click Reports in the left menu bar. Standard reports are separated into 10 groups, so open the Business overview group and click on Profit and Loss, as shown in the GIF below.

Short Video Navigating to Profit and Loss in QuickBooks Online.

Navigate to Profit and Loss in QuickBooks Online

Tip:

For quicker access, you can add Profit and Loss to your favorite reports by clicking on the star icon next to it. Then, you can find it instantly in the Favorites group, which will appear at the top when you click on Reports.


Step 2: Set Up Basic Options for the Profit and Loss Report

Scroll to the top of the Profit and Loss Report screen to view the top menu bar with basic options that can be changed for your report.

Setting up basic options for the QuickBooks profit and loss report.

Set up basic options for the QuickBooks Profit and Loss report

Choose the following options for your report.

A. Report period: Indicate the period that you want income and expenses to be accumulated. You can either click the drop-down box to choose a predefined period or enter the beginning and end dates for a custom period.

B. Display columns by: By default, the QuickBooks Profit and Loss report displays only one column for the period total. Click the drop-down box to choose any subtotal columns you want to display. You can display subtotals for time periods, customers, vendors, classes, locations, and other categories.

C. Show non-zero or active only: This setting lets you select which rows or columns to include in your report. The default is set to show only rows and columns that have activity during the period. You can opt to select rows or columns of all data, only active data, or zero-only data.

D. Compare another period: You can compare your P&L report to another period, such as previous year or year-to-date (YTD).

E. Accounting method: Choose whether the Profit and Loss Report should be prepared on the cash or accrual basis of accounting. Accrual accounting includes accounts payable (A/P) as expenses and accounts receivable (A/R) as revenue.

Cash vs Accrual Accounting:

A unique feature of QuickBooks is the ability to produce either cash- or accrual-basis financial statements. We recommend using accrual-basis statements for management purposes, but most small businesses will need to print cash-basis statements for their income tax return.

F. Run report: Click this button to apply your changes.

G. Customize: Hit this button if you want to customize your report further (we’ll show you how to do this in Step 3, the next section).

H. Save Customization: If you’ve made many changes that you’ll want to duplicate frequently, select this option and name your report. In the future, you’ll be able to choose this customized report from the Reports tab.

Note that your changes won’t be reflected until you click the Run report button (item F).


Step 3: Customize Your Profit and Loss Report Further

In addition to the basic options selected at the top of the page, you can customize the Profit and Loss report further by clicking the Customize button (item G in the prior section). The Customize report window includes the following sections:

General

The first group of options in the Customize report menu is general options.

General report options in QuickBooks Online.

General report options in QuickBooks Online

In addition to setting the reporting period and accounting method, you can specify how numbers will be formatted. You can 1) state numbers in thousands of dollars by ticking the box Divide by 1000; 2) suppress cents; or 3) exclude zero amounts. By clicking on the drop-down menu for Negative numbers, you can choose a format for displaying negative numbers.

Rows/Columns

In the Rows/Columns section, you can select columns to include and change the order of the columns in your Profit and Loss report.

Row/columns report options in QuickBooks Online.

Row/columns report options in QuickBooks Online

Filter

These options allow you to filter the report based on seven variables, shown below.

Filter reports by variables in QuickBooks Online.

Filter reports by variables in QuickBooks Online

If you track income and expenses by class or location, you’ll probably want to print reports filtered by these items. If Location or Class doesn’t appear in your Filter options, you need to turn on Class and Location tracking, as illustrated in Step 4 of our tutorial on how to set up advanced settings.

Profit and Loss by Class:

In addition to filtering the Profit and Loss report by class, QuickBooks provides a Profit and Loss by Class report available under the Business overview tab on the Reports page.

Header/Footer

In the last set of customization options, you can choose what information to display in the header and footer of the report.

Header and footer report options in QuickBooks Online.

Header and footer report options in QuickBooks Online

You can exclude a line from printing on the report by removing the checkmark next to its name. In addition, you can change the name of the company and the report that will appear in the header by indicating the text you want in the appropriate fields. If you upload a logo while setting up your company, you can click the Show logo box so that it appears in the header of your P&L report.

When you are done customizing your P&L report, hit the green Run Report button at the bottom of the list of customization options.


Step 4: Print, Email, or Export Your Profit and Loss Report

If needed, you can print, email, or export your Profit and Loss report via the icons in the top right corner of the report.

Email, print, or export your report in QuickBooks Online.

Email, print, or export your report in QuickBooks Online

A. Click the mail icon to email a PDF copy of your report.

B. Select the printer icon to print a copy of your report.

C. Click the drop-down arrow next to the export icon to export your report as either a PDF or an Excel file.

Look at this sample Profit and Loss report in QuickBooks Online:

Sample profit and loss statement in QuickBooks Online.

Sample P&L statement in QuickBooks Online


Why Is the Profit and Loss Report Important?

A P&L report provides insights into your company’s income and expenses, resulting in either net profit or net loss, which provides a basis for financial forecasting and planning. You can find out crucial information by regularly reviewing your P&L report. For instance, you can compare your current statement to the previous year to determine if your business is making money or if something needs your attention.

A P&L report is run better on an accrual basis than cash flow because it includes revenue and expenses that you’re either owed or owe, regardless of whether cash has exchanged hands. For instance, your net income is reduced by materials used in a particular job, even if you haven’t paid for the materials yet. This provides a much better matching of revenue and expenses than looking at cash flow.

Wrap Up

You’ve completed another one of our QuickBooks lessons and now know how to run an income statement in QuickBooks Online. Our next tutorial looks at how to create a balance sheet using the basic setup options and how to customize the sections further.

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About the Author

Mark Calatrava

Find Mark OnLinkedIn

Mark Calatrava

Mark Calatrava is an accounting expert for Fit Small Business. He has covered more than 50 accounting software for small businesses and niche industries and has developed an in-depth knowledge of the important features of accounting software and how the importance of these features vary by business.

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