The second of the 3 main Financial Statements is the Profit & Loss (also called the P&L or Income Statement).

If you have multiple income streams for the business (ex. You offer both Products and Services), it will break the income section into each type based on your Chart of Accounts. Expenses are also broken out into types like Advertising & Marketing, Office Supplies & Software, etc. These sections will vary based on the type of business and depend on the transactions being accurately categorized as they come through the bank feed.

This report shows us the Net Income for the selected time frame, which tells us if the company made a profit or not. Remember that if Net Income is positive, that means you made a profit. Compare different time periods, and you can see if profits increased or decreased over time or if there are fluctuations throughout the year.

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