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Step 4: Run Reports, Analyze, and Revise

Now that all expenses and income transactions have been added to the books, it’s a good time to run reports and start analyzing!


  • How to access Reports
  • How to customize reports
  • How to Save a report for quick access
  • How to extract reports to Excel

3 Basic Management Reports

A. Profit and Loss – a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period, usually a month, a quarter or a year.

The basic parts of a profit and loss

  • Income/Sales
  • Cost of Goods Sold/Cost of Services
  • Operating Expenses
  • Other Income/Expense
  • Net Income/Bottomline

B.Balance Sheeta financial statement that reports a company’s assets, liabilities, and shareholder equity at a specific point in time. It provide the basis for computing rates of return for investors.

The basic parts of a balance sheet

  •  Assets  – things/properties a business owns that provide economic benefits.
  • Liabilities – amounts a business owes, usually a sum of money
  • Equity – the amount of company’s assets that the owner owns.




  • Cash
  • Accounts Receivable
  • Inventory
  • Prepaid Expenses
  • Patents and Trademarks
  • Fixed Assets


  • Accounts Payable
  • Credit Card
  • Taxes Payable
  • Accrued Expenses
  • Loans
  • Notes payable
  • Mortgages


  • Owner’s Equity
  • Owner Capital
  • Owner Drawings
  • Owner Investment
  • Owner’s Pay & Personal Expenses
  • Retained Earnings

C. Cash Flow Report – a financial statement that captures how much cash is generated and utilized by a business in a specific time period.

The basic parts of a cash flow report

  • Operating Activities  cash transactions from operations.
  • Investing Activities – investments gain/loss. Common example: Purchase/Sale of Fixed Assets
  • Financing Activities – cash flow from company funding, either thru debt/loans or owner investments/payments.

Two Cash Flow Report Methods:

  • Indirect Method calculates cash flow by adjusting net income with differences from non-cash transactions
  • Direct Method uses real cash inflows and outflows taken directly from company operations



  • Profit and Loss Vertical Analysis – shows how Total Sales is getting divided, allotted or consumed by COGS items and Operating Expenses.
  • A/R Aging Summary shows how much receivables are getting overdue. You must avoid growing overdue amount.
  • A/P Aging Summary – shows how much payables are getting overdue. Be sure to pay your overdues.


  • Customize Reports
  • Save reports for quick access
  • Analyze & understand the reports
  • Use at least the 3 basic management reports
  • Take training/lessons to better understand the reports
  • Use the reports to improve your business
  • Review the reports at least on a monthly basis

NOTE: Don’t limit yourself to using only the profit and loss


KPI Reporting – facilitates the measurement and analysis of important business performance indicators.

Key performance indicators: Amount & Percentage

  • Sales Trend
  • Cost of Goods Sold/ Cost of Services trend
  • Operating Expenses Trend
  • Gross Profit Trend
  • Net Income Trend

In this video series, I will share easy-to-follow, simple, and effective steps to setting up your books in QuickBooks Online!

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