I want to talk to you in this video about the most important report in QuickBooks, which is called a profit and loss. It is the report you're going to run if you want to see if your company's making money or losing money. When you go to do your taxes, you want to run your profit and loss because that's where you're going to get a lot of the information to pull into your tax form. If you got to get a loan at the bank, the bank will want to see your profit and loss to see if you're making or losing money in the business. Let's head on over to Report on the navigation pane, and you should see the Profit and Loss right here under favorites. You'll also see the profit and loss under this business overview section. If you look in the second column, you're going to see your profit and loss right here. I'm going to go ahead and click on that. And this is what a profit and loss looks like. If you think about your chart of accounts and the different types of accounts, the only three types that show up on a profit loss are your income accounts, you'll see that QuickBooks will give you a total income right down here. Below your income accounts, you're going to see costs of goods sold, and there's a total for your cost of goods sold on this line. And then QuickBooks will deduct your costs of goods sold from your total income to give you a gross profit. Below that section, you're going to see all of your expense accounts and you'll have a total for those expense accounts down near the bottom, right here. And then the very bottom line shows you your net income, if you made money or lost money. And you can see in this case that there is a net income of $1,642. Now let me go back up to the top because I want to show you something really important. When you're actually running any report, check your dates. This one is showing me the current year to date, which is what I want, but notice that I could change it to look at this month, this week, this quarter, or I can specify a beginning and end date. QuickBooks will run all of your reports automatically on an accrual basis. And what that means is that when you're looking at income accounts, for example, some of this money is invoices you've created that have not yet been paid. When you're looking at all your expense accounts down here at the bottom, some of these may be bills that were put in that you haven't paid yet. If you're looking at your reports on a cash basis, then it's only going to show invoices you've actually been paid for or expenses you've actually already spent. And let me show you how big of a difference that could be. I'm still on accrual, and let's look at our total income, we'll see the number is here. It looks like 10,200. So remember, this is a combination of invoices that have been paid and have not been paid yet, but it's all the invoices I've created during this date range. Now, if I go up and change this to a cash basis and then run the report, now you're going to notice when I look at the total income that it's basically half of that. A couple of other things you're going to be able to do when you're working with your profit and loss, you're going to be able to email this to yourself or someone else if you'd like. You can print this, and you can also export this to Excel or to a PDF file. If you export this to Excel, then you'll be able to manipulate the numbers any way you like, and it will not affect QuickBooks. The last option is your settings, and you'll see there's one setting and it has to do with what they call the display density, you can see it as compact or not. You've got a couple of other options you can do with this report. If you want to edit the titles, you could. The other thing you'll wanna look at is you have the ability to add notes. And what this allows you to do is you can come down to the very bottom and type any notes you'd like related to this profit and loss, and then you can close it when you're done, and it will save those notes so that you can see them at a later date. You can also sort this, right now this is sorted by default, and you probably want to leave this report that way. But you could sort things in ascending order, descending order. You've also got some options up here for displaying your columns, show non-zero or active only, and compare another period. These two, you probably want to leave alone. You'll actually have those options on other reports that make more sense, but it won't make really much sense if you change them on this report. But here's something you could do, you can compare another period. If you want to see what it looked like last year same period then you can choose this option right here and run the report. What you'll notice is this is your current period, and this will be your last year, same period. Now there's not much information here, but you can see that if there was some information, it would be reflected over in this column. I'm going to go ahead and take that off, and run the report again, and now we're back to the normal profit and loss. You're going to use this profit loss when you need the numbers for your taxes, when you need to get a loan at the bank. There's a lot of different times when you're going to want to run the profit and loss. But remember, it's the most important report in QuickBooks. Now that you know how to run a profit and loss, you'll also want to know how to run a balance sheet report.
