Retained Earnings

Retained Earnings account shows the total of your company's income and expenses from all previous years, Flor. Let me go into details about this. 

Retained earnings represent the accumulated profits of a company that have not been distributed to shareholders as dividends. Its figure is derived from the company's net income or net loss, which can be found on the income statement. 

If you started a company in QuickBooks Online (QBO) and you don't have prior retained earnings, the number shown as retained earnings likely comes from any net income your company has generated since its inception, minus any dividends you may have paid out.

It's important to note that retained earnings are an essential component of a company's equity and are used to reinvest back into the business or pay down debt. It is not advisable to delete the retained earnings column from the balance sheet as it provides critical information about a company’s financial health and profitability.

You can visit this article for more details: View Retained Earnings account details in QBO.

Moreover, you might want to check this helpful resource to give you a better picture of how your business is doing: Run Reports In QBO.

Please don't hesitate to loop me in if you have further questions about retained earnings in QBO. I'd be glad to assist. Have a great day ahead of you. 

Thanks for your enthusiasm to learn more about QuickBooks Online (QBO), Flor. You’re absolutely right, the figures you’re seeing should line up with your net income, particularly since there are no previous retained earnings recorded in your QBO account. 

Additionally, the amount you're viewing is already included in your Profit and Loss statement, categorized as net income. Apart from this, during the same accounting period, this net income figure will also appear on your Balance Sheet. It will be labeled either as Net Income or Retained Earnings, which depends on the specific structure and type of your business.

To ensure that all financial data reflects accurately, you have to make sure to continue updating your income and expense transactions regularly. By doing so, QBO efficiently handles all necessary calculations on your behalf.

Moreover, you can visit this article for more details about Retained Earnings and how it works in your QBO account: View Retained Earnings account details in QuickBooks Online.

Furthermore, if you plan to run reports, you can also read this article for a list of modified reports in QBO, along with the steps on how to generate them: Common custom reports in QuickBooks Online.

It’s fantastic to see you proactively monitoring these financial statements, Flor. Keep up the diligent work as it's always a key to maintaining the health of any business finances. You can always Reply on this forum if you have any further questions with regard to your net income in P&L. I'm always one click away to help. 

@Flor Isola 

"Can someone helm me understand 1-where does the retained earnings come from?"

Retained Earnings (RE), is the accumulated amount of previous fiscal year's net income.  Any reductions in RE have to be posted manually - QB doesn't automatically reduce RE.  QB closes current year net income to RE at the end of your fiscal year, so if your year-end is Dec. 31, as of Jan. 1, QB closes the balance in net income to RE.  That's all QB automatically does.

"I started a company in QB so I don't have previous retained earnings, what is being considered to show my a number that is not zero?"

If you have a balance in RE, then you have transactions that are dated prior to your fiscal year-end and the balance sheet date is after your fiscal year-end. 

"Also, can I delete this column from the Balance sheet?"

No, you cannot delete RE.