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rkoorapati
September 8, 2023
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QBO Profit and Loss report

  • September 8, 2023
  • 2 replies
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Hello,

I have excel report to show profit by doing below math:

Invoice amounts minus ( expenses +checks+bills).

When I run this by month and compare to qbo profit & loss report, I found qbo P&L  shows a way higher positive amount than my excel report. 

 

Can you shed light why the difference? Am I doing something wrong in my excel report ?

 

Thanks,

Ravi Koorapati 

Best answer by Rainflurry

I mean purchase order bills. I see those PO bills are not included in Profit & Loss reports. Are they considered as an asset from P&L report perspective ? Can anyone confirm ?

 

Thanks 


@rkoorapati 

 

Bills, whether they are created directly as a bill or created from a purchase order, are treated the same way in QB.  To be clear, there is no correlation between bills and the P&L report - it is the items and categories listed on those bills that determine if they will show up on the P&L report or your balance sheet.  If you try to use bills to create a P&L report, and not drill down to the items or categories listed on the bills, you will be chasing your tail.  

2 replies

DivinaMercy_N
DivinaMercy_N
September 8, 2023

I'll share some insights about the Profit and Loss report amounts in QuickBooks Online (QBO), @rkoorapati.

 

QBO calculates the amounts in the Profit and Loss report based on the transactions entered. The program doesn't have a specific formula to determine the total profit of your company. To verify what causes the difference between the report in your Excel and with QBO, I recommend reviewing each line in the Profit and Loss report in that particular month. 

 

You can also reach out to your accountant to further check the transactions entered in the Profit and Loss report in your QBO and Excel. Then, guide you to have a correct formula you can use to get the accurate amounts. 

 

In case you need to modify the details of your report in QBO, you can refer to this article: Customize reports in QuickBooks Online.

 

Should you encounter any difficulties while running other reports in QuickBooks, feel free to reach out to me again. Resolving your issue is my top priority.

Rainflurry
Rainflurry
September 8, 2023

 

@DivinaMercy_Nstated: The program doesn't have a specific formula to determine the total profit of your company.

 

Yikes, does anyone screen these answers?  QB certainly does have a formula to determine it.  If it didn't, how would it calculate it?  A random guess?  A dart throw?  QB calculates net income by taking items of income and subtracting items of expense.  That's it.  Nothing crazy going on. 

R
rkoorapatiAuthor
September 9, 2023

Yes, it should be simple math. Income minus expenses. What I did was, exported QBO transaction list by date for a specific month and group transaction type items by Invoice, expense, Bill, Check. And then did the math, invoice total minus ( expense+bill+check) total. I did hope this should be close to what QBO P& L report shows. But P&L report shows a higher net income than my excel which was based on QBO transaction list report. Confusing !!!

Yes, I am going thru each line item to figure out how QBO P&L report is calculated.

 

Thanks 

Rainflurry
Rainflurry
September 8, 2023

@rkoorapati 

 

Profit (or presumably you are referring to net income) is made up of only items of income and expense.  The expenses, checks, and bills functions in QB can include assets, liabilities, and equity accounts which affect your balance sheet, not your P&L.  For example, if you use the expense function to record the purchase of inventory, that "expense" is not an expense at all, it is a reduction of cash and an increase in inventory - both balance sheet accounts.  So, if you were to assume that "expense" is, in fact, an expense, you would be incorrectly reducing your net income by that amount.       

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