Summary

Creating an income statement in QuickBooks is an essential skill for any small business owner. This statement, also known as a profit and loss (P&L) report, shows your earnings and expenses over a specific period. QuickBooks makes it easy to create, customize, save, print, and email these reports, whether you use QuickBooks Online or Desktop. Here’s a detailed walkthrough to help you master this process for better business management and financial planning.

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💡 Is it an income statement or profit and loss?

When someone requests an income statement, they’re asking for a report of your business’s earnings and expenses. In QuickBooks, this report is called a profit and loss statement (P&L). Both terms mean the same thing and are used interchangeably by accountants, loan officers, and tax preparers. While “income statement” is the traditional term, “profit and loss” describes the report’s purpose more accurately, as it shows your total income alongside your expenses to calculate your net profit or loss. Whenever you’re asked for an income statement, head to your QuickBooks profit and loss report to provide exactly what they need.

Takeaways:

• Income statement and profit and loss statement are the same report.
• QuickBooks calls it a profit and loss statement.
• Both terms are acceptable in accounting.

Key Terms

• Income Statement: A financial report showing earnings and expenses over a period.
• Profit and Loss Statement (P&L): Another name for an income statement, used in QuickBooks.

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📝 How to find your income statement in QuickBooks

Finding your income statement depends on your version of QuickBooks. In QuickBooks Online Accountant, use the Search bar at the top right to type in “Profit and Loss” and select your desired format. In QuickBooks Online, click the Reports tab on the left sidebar and scroll to “Profit and Loss,” or search for it directly. In QuickBooks Desktop versions like Pro, Premier, or Enterprise Solutions, click the Insights tab on your Home screen for a dashboard view, or go to Reports > Company & Financial and choose your preferred profit and loss format. Each option quickly generates the report you need to analyze your business performance.

Takeaways:

• QuickBooks Online users can find income statements under the Reports tab or using Search.
• QuickBooks Desktop users can access it via the Insights tab or Reports menu.
• “Profit and Loss” is the report name in QuickBooks.

Key Terms

• QuickBooks Online: Cloud-based version of QuickBooks software.
• QuickBooks Desktop: Installed software version with Pro, Premier, or Enterprise editions.

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⚙️ Choosing your income statement report format

QuickBooks offers different income statement formats depending on your needs. For management decisions, the Profit and Loss by Customer or Profit and Loss as % of Total Income formats can give detailed insights. For tax filings, a standard Profit and Loss report is usually sufficient. If you’re applying for a business loan, check with your loan officer to see which format they prefer. Picking the right format ensures your report communicates effectively to the intended audience, whether it’s for internal strategy, tax filing, or financial applications.

Takeaways:

• Choose your report format based on its purpose.
• Management might need customer-based or percentage-based reports.
• Standard format works well for taxes.

Key Terms

• Profit and Loss by Customer: Shows earnings and expenses per customer.
• Profit and Loss as % of Total Income: Displays each item as a percentage of total income.

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🔧 Customizing your income statement

QuickBooks makes it easy to customize your income statement. You can choose between cash or accrual basis, set date ranges, adjust columns, and add filters or notes. Cash basis shows income when received and expenses when paid, which is often required for taxes. Accrual basis shows income when earned and expenses when incurred, offering a clearer view for management decisions. Date ranges can cover years, quarters, months, or custom periods. Adjusting columns lets you compare multiple periods side by side, like showing three years in one report. You can also filter data, compare to other periods, and add notes or comments to explain variances.

Takeaways:

• Customize for cash or accrual basis depending on purpose.
• Adjust date ranges and columns for analysis.
• Add filters, notes, and comparisons for clarity.

Key Terms

• Cash Basis: Reports income and expenses when money changes hands.
• Accrual Basis: Reports income and expenses when earned or incurred, regardless of payment.
• Columns: Different time periods or segments displayed in the report for comparison.

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🖨️ Producing, saving, and sending your income statement

Once your report is customized, it’s time to run, save, print, or email it. In QuickBooks Online, click “Run report” to generate it. Save your report by clicking “Save customization” and name it for future use. Print by clicking the printer icon, or export it to PDF or Excel with the document icon. To email directly, use the envelope icon and add your email in the CC field if needed. In QuickBooks Desktop, the report refreshes as you customize it, but you can click Refresh to ensure updates apply. Save using the “Memorize” button, print or export via “Print” or “Excel” buttons, and email it using the “Email” button in your toolbar.

Takeaways:

• Run your report after customizing.
• Save customizations for easy access later.
• Print, export, or email directly from QuickBooks.

Key Terms

• Save Customization: Stores your report settings for reuse.
• Memorize: QuickBooks Desktop term for saving reports.
• Export: Convert your report to PDF or Excel for sharing or record-keeping.

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Conclusion

Creating and customizing income statements in QuickBooks is a fundamental task for managing your business’s financial health. By understanding the process, choosing the right format, customizing effectively, and knowing how to save, print, and send your reports, you can ensure you always have the insights needed to make informed decisions and meet any tax or loan requirements with confidence.