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One of the key standard accounting reports is the Profit & Loss. For a given period this tells you how much you have made in Sales and how much you have incurred in Expenses.

Note: This is not necessarily the same as how much cash you have received or paid out due to the timing of payments. For example, a Sales invoice you raised on the 31st December, would show as a sale in the period to 31st December. However, you may not have been paid for this invoice yet!

There are a few main sections to understand when it comes to the profit and loss report.

The below is an example profit and loss report for the period 1 July 2023 - 30 June 2024.

Revenue/Sales - These are the goods or services you get paid for. For the period stated above, this would be any sales invoices you have raised, or any cash* sales you have made during the period.

*Sales you didn't make on credit / invoice for.

Gross profit - Your Sales less your Cost of Sales

Profit before tax - Your Gross Profit less your Overheads

Corporation Tax bill (Estimated) - Within Ember, we keep a running total for you based on your current profits, less any disallowable expenses, of what you're likely to pay in corporation tax. Don't worry, this isn't normally due for 9 months and 1 day from when you finished your accounting period! But this helps guide you on how much you're going to need to keep back to pay HMRC.

Profit after tax - Your Net profit (before tax) less the estimated corporation tax.