How to use the Profit & Loss report?

The Profit & Loss report helps you understand your business’s revenue and expenses over a selected period. It shows whether your business is making a profit or a loss and helps you assess your taxable income.

The P&L is accrual-based, meaning it includes all income and expenses that occurred within the chosen period, regardless of whether they have been paid or received. This ensures a comprehensive view of your financial position, including invoiced but unpaid items.

How to create the Profit & Loss report

1. Go to Reports > Profit & Loss.

2. Select the data source you want to view:

   • Actual + Plan: Select a revision month to include both actual and planned data.

   • Actuals: View only actual data.

   • Plan: Choose the plan you want to include in the analysis.

3. Click Apply to generate the report.

What is included in the Profit & Loss report

• Income and expenses invoiced within the period.

• Interest on loans.

• Depreciation on capital items.

• Stock or product on hand.

• Shareholder salaries.

What is not included in the Profit & Loss report

• Personal items.

• Capital sales and purchases.

• Principal repayments on loans.

Adjustments You can make manual adjustments to include depreciation, shareholder salaries, livestock, and product on hand. These adjustments appear at the bottom of the report above the Net Profit/Loss.

How to make adjustments:

1. Select the Adjustments icon at the top right of the screen.

2. Enter or update the relevant information for the following:

   • Livestock Adjustments: Automatically calculated based on stock changes throughout the financial year, but you can manually update the values.

• • Other Adjustments: Include depreciation on assets ( sourced automatically from the asset register or manually entered) , shareholder salaries, and product on hand (e.g., supplementary feed or wool). Ensure the data entered reflects the difference between the opening and closing product on hand.

TIP: Adjustments allow you to model different financial scenarios. You can overtype calculated adjustments if needed.

How to filter:

1. Select the Filter icon at the top right of the screen.

2. Select the Tags you want to use as filters.

This allows you to view different revenue streams of your business.

How to calculate Gross Profit Margin: 

You can use the P&L report to calculate your Gross Profit Margin, which indicates whether you have enough profit to cover expenses. You can also benchmark your margin against similar businesses in your industry.

Calculation: Gross Profit Margin = (Gross profit / Total revenue) x 100

TIP: Comparing your Gross Profit Margin with industry standards can help you understand how your business is performing relative to others.