Understanding your Profit & Loss

The Profit & Loss (P&L) shows whether your business made money over a period — Revenue minus Expenses, broken into sections.

Sections

SectionWhat it contains ------ RevenueSales, service income, interest received. Credit-normal accounts (codes 400-460 in the standard chart). Cost of Goods Sold (COGS)Direct costs of producing your goods/services. Accounts with account_class = 'cost_of_sales' or 'cogs'. Gross ProfitRevenue minus COGS. The margin from your core activity. Operating ExpensesAll other expense accounts — rent, wages, marketing, utilities. Net ProfitGross Profit minus Operating Expenses.

Generating the report

Reports → Profit & Loss.

Pick a Period — common picks are this month, this quarter, this financial year (1 July – 30 June for AU).

Optional: enable Comparison period to see two side-by-side columns plus variance ($ and %).

Click Run.

Comparison and variance

When you enable a comparison period, each row shows:

This period — the current period total

Comparison — the prior period total

Variance — current minus comparison ($ change)

Variance % — relative change ((current − comparison) / |comparison|) × 100

Variance % returns blank when the comparison value is zero (division undefined).

COGS classification note

If your chart of accounts has no accounts marked with account_class = 'cost_of_sales', the COGS section will show a banner: "no COGS accounts classified — your gross profit equals your revenue total." This is informational, not an error. To classify a COGS account, edit it under Settings → Chart of Accounts and set the account class.

Drilling in

Click any account row to open the [Account Transactions report](/help/transactions/categorising-transactions) for that account, pre-filtered to the same period.

Edge cases

Reversed entries. A reversal posts the opposite of the original entry. Both are included if both fall within the period, so they net to zero on the affected accounts. If only one half is in-period (the original is in-period but the reversal is in the next period), the totals shift accordingly. Draft journal entries. Excluded. Only status = 'posted' entries appear. Zero-revenue period. The report still renders with all revenue accounts at 0.00 and your expenses showing as a loss.