A profit and loss report tells you whether your business actually made money over a given period, but only if the numbers behind it are accurate and you know what you’re looking at. Here’s how to run a P&L report in QuickBooks that actually makes sense, and how to read it without getting lost in categories that don’t mean much on their own.
Last verified: September 2026.
This assumes your chart of accounts and categorization are already set up correctly, if not, start with our complete QuickBooks setup guide.
How to run a P&L report in QuickBooks
- Go to Reports from the left menu, then search for “Profit and Loss” (sometimes labeled “Income Statement”).
- Set the date range. This is the single most common mistake, running a report for the wrong period gives you numbers that look wrong but are actually just answering a different question than the one you meant to ask.
- Choose your comparison columns if you want them. Comparing this month to last month, or this year to last year, side by side, makes trends visible that a single-period report hides.
- Run the report and review the totals before diving into individual line items.
Reading a P&L report without getting lost
The structure is simpler than it looks once you know what each section represents. Income at the top shows everything you earned. Cost of goods sold, if your business has it, shows direct costs tied to what you sold. Gross profit is income minus that direct cost. Operating expenses cover everything else running the business, rent, software, payroll. Net profit at the bottom is what’s actually left after all of it.
Most confusion comes from treating every line item as equally important. A handful of categories usually drive the majority of both income and expense, focus there first rather than trying to absorb every single line at once.
Common mistakes that make a P&L report misleading
- Running it before transactions are fully categorized. A report pulled from a file with a backlog of uncategorized transactions is incomplete, not just imprecise, the numbers genuinely don’t reflect reality yet.
- Comparing periods of different lengths. A 31-day month against a 28-day month, or a partial quarter against a full one, distorts the comparison unless you’re specifically accounting for that.
- Confusing profit with cash in the bank. A P&L report runs on accounting rules, not literal cash movement, especially on accrual basis. A profitable month on paper doesn’t always mean more cash sitting in your account that same month.
- Ignoring one-time items skewing the picture. A single large one-off expense or unusual income event can make a normal month look dramatically different from your typical pattern if you don’t mentally adjust for it.
What to actually check every time you run one
Compare net profit against your own expectations for that period first, if it’s wildly different from what you expected, that’s worth investigating before trusting the number. Check that categories with unusually high or low totals compared to a typical month make sense, a spike often traces back to a single miscategorized transaction rather than a real trend. Confirm the date range and comparison settings are actually what you meant to run, not just what QuickBooks defaulted to.
Cash vs accrual: why the same report can look different
QuickBooks lets you toggle between cash and accrual basis on the same P&L report, and the numbers can genuinely differ, sometimes significantly, depending on your invoicing and payment timing. Cash basis counts income and expenses when money actually moves, accrual counts them when the transaction happens regardless of payment timing. Know which basis you’re looking at before comparing this month’s report to a prior one, switching basis without realizing it makes a normal month look like an anomaly.
Using this report to actually make decisions
A P&L report is most useful compared against itself over time, not as a single isolated snapshot. Running it monthly and watching how each major category trends tells you far more than any single month in isolation, whether expenses are creeping up faster than revenue, whether a specific cost category is growing out of proportion to the business. If you’re only looking at this report once a year at tax time, you’re missing most of its actual value.
Confirm your bank accounts are actually reconciled for the period first, see our step-by-step guide to reconciling a bank account if you are not sure they are.
When the numbers don’t make sense
If a P&L report shows something that genuinely doesn’t match your understanding of the business, first check for uncategorized or miscategorized transactions in the affected category. If that doesn’t explain it, verify your bank accounts are reconciled for that period, an unreconciled account can hide errors that flow straight into this report. If it still doesn’t add up after both checks, that’s the point to bring in a bookkeeper rather than continuing to guess.
Frequently asked questions
How often should I run a P&L report?
Monthly, at minimum, ideally right after you’ve reconciled your accounts for that period so the numbers are trustworthy. Waiting until tax season to look at it for the first time in a year means missing a full year of opportunities to catch problems early.
Why does my P&L report not match what I think I made?
Usually one of three things: uncategorized transactions still pending, a cash vs accrual basis mismatch with your expectations, or a one-time item skewing the period. Check these in order before assuming the report itself is wrong.
What’s the difference between a P&L report and a balance sheet?
A P&L report shows performance over a period of time, income and expenses. A balance sheet shows a snapshot at a single point in time, what you own and owe. They answer different questions and are meant to be read together, not as substitutes for each other.
Can I customize which categories show up on my P&L report?
Yes, QuickBooks lets you customize reports to show more or less detail, filter by class or location if you use those, and adjust the date range and comparison columns to fit what you’re actually trying to answer.
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