Setting Up Profit and Loss Statement in QuickBooks: 6 Easy Steps

on Accounting Software, CRM Automation, CRMs, Data Visualization, QuickBooks, Tutorials • January 3rd, 2022 • Write for Hevo

Every business needs to manage its finances properly to make a Profit. QuickBooks offers businesses a systematic way of keeping Income and Expenditure Records to measure their Profitability. Profit and Loss Statement in QuickBooks is vital to the sustainability and progress of startups and medium-sized businesses as it helps them make informed decisions regarding their Income and Expenditure.

Get started with the software by setting it up with the information provided in this article, and begin to track your company’s financial directions. This article will introduce you to QuickBooks and its Key Features. It will also introduce you to the Profit and Loss Statement in QuickBooks. This article will provide you with steps to set up a Profit and Loss Statement in QuickBooks.

By the end of this article, you will be able to launch QuickBooks seamlessly and create a Profit and Loss Statement in QuickBooks.

Table of Contents

Introduction to QuickBooks

Profit and Loss Statement in Quickbooks: QuickBooks logo
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QuickBooks is designed to provide accurate reports on a business’s finances. The software lets business owners document all the financial transactions related to their business, organize the data into reports, and presents them in a simplified form for informed decision making.

The tool is ideal for small and medium-sized businesses, as it helps them manage their finances without the help of a professional accountant. Apart from its low pricing, this software offers a lot of user-friendly accounting features that anyone can use. QuickBooks users also enjoy access to advise from experts in Book Keeping and Accounting.

Profit and Loss Statement in QuickBooks is one of the most popular Financial Reports available. The QuickBooks website has a template for Profit and Loss Statements that you can easily customize to suit your needs. This ensures that even Financial Amateurs can create a comprehensive Profit and Loss Statement in QuickBooks, in only a few minutes.

Profit and Loss Statement in QuickBooks is organized monthly, quarterly, and annually. If you want to check the Profit and Loss Statement in QuickBooks from previous months, then you can use the ‘Date Range’ option.

Key Features of QuickBooks

Profit and Loss Statement in Quickbooks: Key Features image
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Listed below are the 6 Key Features of QuickBooks that you should be aware of:

  1. Customer Relationship Management (CRM): QuickBooks allows small business owners to collect and store data on their customers and suppliers. 
  2. Invoice Management: QuickBooks integrates its users’ accounts with applications like Bill so they can build customized invoices, send them to their customers’ email accounts, and identify pending payments.
  3. Organization of International Transactions: QuickBooks provides its users with current exchange rates to help them trade easily with international customers. 
  4. Inventory Management: QuickBooks allows you to keep track of your stock so you can determine which goods are in high demand and restock them ahead of new orders.
  5. Company Snapshot: Just by checking your QuickBooks reports, you can determine the amount of income your business is earning or whether you are only losing money.
  6. Tax Computation: Lastly, QuickBooks calculates the tax on your business.

For more information on QuickBooks and its features, click here.

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Introduction to Profit and Loss Statement in QuickBooks

Profit and Loss Statement in Quickbooks: Profit and Loss Statement in QuickBooks image
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A Profit and Loss Statement in QuickBooks compares your income with your expenses within a specific period of time to determine whether your business is making profits or incurring losses. Usually, the Profit and Loss Statement in Quickbooks has 5 major features:

  • Cost of Goods Sold (COGS): This refers to the Total Cost Price of the inventory you’ve sold in a specified period of time.
  • Revenue: In a Profit and Loss Statement in QuickBooks, Revenue is the income you’ve earned from selling goods or services.
  • Expenses: This is the amount you’ve spent purchasing goods, paying subcontractors, or buying materials for production.
  • Gross Profit: Gross Profit is calculated by subtracting your COGS from your monthly revenue.
  • Net Profit: Calculate your Net Profit by removing your Expenses from your Gross Profit. Your Net Profit is the exact Profit that your business has made. If your Expenses are higher than your Gross Profit, it means you have incurred a Loss.

Benefits of Using Profit and Loss Statement in QuickBooks

Following are the benefits of using Profit and Loss Statement in QuickBooks:

  • Profit and Loss Statement in QuickBooks is easy to use, and it allows business owners to develop their reports from the software’s templates instead of creating reports from scratch.
  • It is affordable. You can enjoy a wide range of helpful features that QuickBooks offers for as low as $12.50 per month. 
  • It offers small business owners the ability to expand their enterprise. Many entrepreneurs need loans to grow their businesses. To get a business loan, you may need to provide your Financial Reports to the credit agency or bank. It gives you access to the required documents like the Profit and Loss Statement.
  • It reduces the amount of time a business owner spends on bookkeeping. Profit and Loss Statement in QuickBooks automates the majority of your accounting workload so that you can spend more time on other areas of your business.
  • It lets users enjoy a variety of accounting functions on a single platform. A Profit and Loss Statement in QuickBooks incorporates your account with payment tools for processes like Inventory Management and Payroll Administration so that you can take care of your Financial Responsibilities in one place.
  • Some third-party tools on the Profit and Loss Statement in QuickBooks are PayPal (for Invoice Creation and Online Payments) and Expensify (for Payroll Administration in medium-sized businesses).

Steps to Set Up Profit and Loss Statement in QuickBooks

Follow the steps below to set up a Profit and Loss Statement in QuickBooks:

Step 1: Create a QuickBooks Account

If you don’t have a QuickBooks account, you need to sign up for one before you can set up a Profit and Loss Statement in QuickBooks. Click on the ‘Sign Up’ button on the homepage to get started as shown in the image below.

Profit and Loss Statement in Quickbooks: Sign Up Page image
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Step 2: Find the Profit and Loss Statement in QuickBooks Report Center

Click on the Menu Bar on the left-hand side of your computer screen, and select ‘Reports’. A dropdown menu will appear. Select ‘Report Center’ on the dropdown menu as shown in the image below.

Profit and Loss Statement in Quickbooks: Reports Dropdown List image
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Then, click on ‘Company and Financial’. QuickBooks will present you with various options under ‘Company and Financial’. Scroll to ‘Profit and Loss Report Standard’, and click on it.

Step 3: Choose the Range

You’ll see a list of options on the top of the Profit and Loss Reports page. Click on ‘Dates’, and select a Date Range as shown in the image below. The Date Range is the length of time you want the report to cover.

Profit and Loss Statement in Quickbooks: Data Range image
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Step 4: Customize your Profit and Loss Statement in QuickBooks

The essence of customizing this report is to personalize different options to suit your business needs. Apart from the Reporting Period, you can also customize Columns, Accounting Methods, etc. Set your preferences, and save your changes as shown in the image below.

Profit and Loss Statement in Quickbooks: Customization Options image
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Step 5: Start Running the Profit and Loss Statement in QuickBooks

Now, click on the ‘Run’ button to finish setting up the Profit and Loss Statement in QuickBooks for your business.

Step 6: Print, Email, or Download your Report

You just set up a Profit and Loss Statement in QuickBooks. The next step which is the last is to harvest the report by either printing it, sending it to a mail address, or downloading it in the pdf or Excel spreadsheet format.

Conclusion

Once you set up your Profit and Loss Statement in QuickBooks, it will start managing the report. You can access your Profit and Loss Statement in QuickBooks at the end of each day, week, month, or business year.

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This article introduced you to QuickBooks and its key features. It also introduced you to the Profit and Loss Statement in QuickBooks and the benefits of using it. It also helped you set up a Profit and Loss Statement in QuickBooks.

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Share your experience of setting up a Profit and Loss Statement in QuickBooks in the comments section below!

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