Money & reports
Profit & Loss explained
What each line of the Profit & Loss means and how to keep it accurate.
For: Owner, Manager
The Profit & Loss (P&L) tells you whether the business made money over a period, and where it went. Owners and Managers can open it from Reports → Profit & Loss.
Choosing the period
It opens on this month to date. Click This month, Last month, Last 3 months or This year, or pick your own From and To dates and click Apply. Click Print for a paper copy. Under the title it shows which company (or head office + branches) and which dates it covers.
Reading it line by line
Here is an example month, with what each line means.
| Line | Example | What it means |
|---|---|---|
| Revenue | ||
| Sales | 5,000.00 | Everything sold in the period at full price, before discounts. |
| Less: discounts | (100.00) | Line discounts given at the till. |
| Net sales | 4,900.00 | What you actually charged customers. |
| Less: cost of goods sold | (3,200.00) | What the goods you sold cost you to buy. |
| Gross profit | 1,700.00 | Net sales minus cost of goods sold. The card at the top also shows it as a margin: here 34.7% of net sales. |
| Operating expenses | ||
| Rent, Wages, Transport… | (900.00) | Your expenses for the period, one line per category. |
| Operating profit | 800.00 | Gross profit minus expenses. |
| Stock losses & gains | ||
| Write-offs (damaged, expired, stolen…) at cost | (60.00) | Stock you wrote off, valued at cost. |
| Stock take adjustments (reconciled) | (40.00) | The value of stock found (+) or missing (−) in stock takes you reconciled in this period. |
| Net profit | 700.00 | What the business really made. If it is negative, the line reads Net loss. |
The four cards at the top sum it up: Net sales (and units sold), Gross profit (and margin), Running costs (expenses, with stock losses shown underneath), and Net profit (and what percentage of sales it is).
Things to know
Cost of goods sold uses today's unit cost
iTrade works out the cost of each item sold from the product's current Unit cost, not the cost on the delivery it came from. Write-offs and stock take adjustments are valued the same way.
- If a product's Unit cost is 0, its sales look like pure profit.
- If your supplier's price went up but you didn't update the product, your profit looks better than it really is.
Whenever a supplier changes a price, edit the product and update its Unit cost (Stock → Products). A quick check: open the Stock Report and look for products with a unit cost of 0.
Credit sales count
A sale counts on the day it is made, whatever the payment method, including Credit. So the P&L can show a profit even when the cash hasn't come in yet. To see the cash, use the Cash Flow Statement.
Stock purchases are not an expense here
Buying stock doesn't reduce profit when you buy it. It reduces profit when you sell it, through cost of goods sold. A month where you stocked up heavily can still show a healthy profit. That's correct: the stock is still on your shelves.
Startup costs are left out
One-off setup costs (equipment, fit-out) are an investment, not a running cost, so they are not deducted. If you recorded any in the period, a note under the statement says how much and links to the Cash Flow Statement, where they appear.
Making it accurate
- Keep every product's Unit cost up to date.
- Record every expense, including small cash ones paid from the till.
- Record known losses as write-offs when they happen.
- Do regular stock takes and reconcile them, so hidden losses show up.
- If you have several tills using the app offline, make sure they have synced.