QuickBooks Online 2022 Comparative profit and loss P and L or income statement, get ready because it’s go time with QuickBooks Online 2022. Online in our browser searching for QuickBooks Online at test drive going into the test drive, we’re going to be picking up the United States version of it and verifying that we’re not a robot.
00:24
sample company Craig’s design and landscaping services holding ctrl scroll up just a bit to get to that one to 5%. We’re also going to have the free 30 day trial version open. So we can look at the business view and compare it to the accounting view.
00:38
If you don’t have access to this app, this time, that’s okay, we’re going to use it more in the second half of the course, going back on over to the sample file, we’re going to be opening up a few tabs up top, going to the tab up top to do so right clicking on it and duplicating the tab, we’re going to go to the first tab again, right click on it again, and duplicate the tab.
00:59
Again, as that is thinking I’m going to jump back on over to the 30 day trial version, just so we can look at this business view to see where the reports are located. And they’re located in the business overview area. And then the reports right here. If you were to go and change the cog up top or go into the COC to change to the accounting view, you will have a view that will be similar to what we’re working with in the sample file.
01:25
Back to the sample file, we now have the refresh to tab or in the second tab. Now we’re going to make that into our standard income statement or profit and loss to start out with, let’s go down to the reports.
01:38
And just note that some comparative reports may automatically be given to you and QuickBooks might have already put them together. But we’re going to learn how to construct them so that you have a lot more flexibility with the types of reports you might be looking at. So let’s just take a quick look at the reports down here in the business overview. You’ve got your balance sheet reports.
01:57
And then you’ve got your Profit and Loss report. This is as a percentage of income, which is kind of like a vertical analysis that we’ll put together in a future presentation, profit and loss comparison.
02:08
And I would think this is probably going to be a comparison to the prior year. This will be similar to what we’re constructing now. But if you know how to construct it, then you’ve got a lot more flexibility with the types of comparisons that you can put together, you got the profit and loss detail, the profit and loss a year to date comparison, and then the profit and loss by customer profit and loss by month, and the profit and loss by tag group and then the standard PNL.
02:35
So let’s open up the profit and loss and see how we can use some of the functionality to make some of these comparative type of reports, it’ll be similar to what we did with the balance sheet. But with the profit and loss. Remember that we have a different format of the type of report it’s not as of a point in time, it’s a range of time, let’s set that range. Now by going to the date range up top and saying this is going to go from a one a one to one to 1231 to one, run it.
03:03
And then we’ll go to the tab to the right will also open up the balance sheet to so that we have our major two financial statement reports opened up let’s just open that up from the favorites and close up the hamburger scrolling up and then rains changing it from Oh 101 to one to 1231 to one and run that report. So remember the balance sheet that we looked at in the prior section as of a point in time, the income statement here is going to be a time frame a range of time.
03:34
So if we wanted to do some kind of comparative types of reports, there’s a couple ways we can do it. One is we could select just having the range up top that’s being the entire year, and then select some other type of formatting. In other words, we might say I want to use it and show it quarterly.
03:54
And so that would break out the quarters. If we run it run in this report, gotta run it, there’s no data in the first quarter or the second quarter, and then you got the third and fourth quarter that has data within it. Also note that as we do that, it does give us a total, because what it’s giving us here is saying,
04:10
Hey, this is what your performance was. And you can think about that analogy of basically starting the odometer over in a car and seeing how far you can drive in a month, for example, or in this case, and a quarter. And then it just keeps on going up for that quarter. So we’re going to add the full quarters together. And then we got the total, which is basically how far you drove in a year.
04:33
And then we start the odometer over for the next year. That’s different. You’ll recall that if I go to the balance sheet over here, and I was to break this out by quarter, so let’s break this out by quarter run it and we don’t get the total column over here. Because on the balance sheet side of things, it’s as of a point in time it’s not accumulating upwards.
04:54
It’s just it is what it is, as of that point. Going back to the prior tab But we can also do that if we change the range up top and say, let’s say we want to do a comparison of just two months, December and November, November and December. So I’ll change the range from 1101 to 1101, to one to 1231 to one, and then I’m going to change it from quarters, two months, two months and run it, running it.
05:25
And here is our comparison. Again, we got to it’s a really nice comparison to do this way on the income statement. Because you can compare multiple different months, not just two months, and you get not only the periods that are covering, but you also get the total at the right hand side. So you get to see the total that’s been accumulated for the timeframe you’re looking at.
05:45
And the two months, the two months broken out as well, to see how well you did in this format, we’re going to have the prior month on the left hand sides, we’re reading in essence, from left to right, and kind of chronological order, the last month is first and then the current months are later and then you get the total.
06:04
However, you might want to see this comparison to say I would like to see the difference between the two instead of adding the two up to try to look at the comparison between one month and another. So to do that report, we’re going to scroll back up top and say I’m going to bring this back to the totals, let’s bring it back to the starting point back to the totals run it.
06:25
So now I would have the totals for the two month time period, which would be equal to the total column in the prior report that we looked at. And then I’m going to use the prior period thing. So if I hit the drop down, I need this prior period thing. That means I want to first set my time range for the current period, which is just going to be December, and then compare it to the prior period.
06:48
So I’m going to say let’s do this as of 1201. To one, that’s the current period, and then I’m going to compare it to the previous period. And so it’ll give us a custom range down below.
06:59
And note it’s picking the entire month up which is good. Also know it can be a little bit confusing when you use this tool, because you’re comparing a custom period in our case, that is 31 days, which happens to be the whole month of December to a custom period, which is only 30 days, which is the month of November.
07:18
We can also of course to easily formulated previous year and a year to date type of analysis down below. So we’re just going to do the month by month calculation. And and well let’s do this first, let’s do this first and just see the comparison. So now you don’t see the total column over here.
07:36
But and also you have the current month is first and this is a very common way to see a comparative type of report. Because on the last report, we saw it in chronological order. Now we’re seeing it basically in order of importance, the most current period being the most important period for a decision making standpoint.
07:55
And then the prior period, instead of having the total, I want to see the difference now. So I’m going to go back up top and say give me the difference in dollars, pour five or run it, running it. And so now we’ve of course got the current period minus the prior period gives us the change in dollars, that can give us a good idea of how well we are doing by looking at these changes,
08:19
and then trying to make decisions based on that into the future. If there are substantial changes from period to period, and we are a company that’s basically in a consistent period of time, then we would want to be able to explain those changes to ourselves and or to management. So that we can we can justify the changes that have been made, they should have a reason for them.
08:40
And so let’s go back up. Now the changes are good. And that could be quite good for internal kind of reporting purposes. But even for internal reporting, and especially for reporting to someone else external or comparing or benchmarking to some other company, you need the percentages, we got to have the percentages.
08:58
So let’s go back up top and say let’s do this again, and hit the drop down and say we want the percentage change and run it. So this would be like our horizontal analysis type of report. Let’s pull out a trusty calculator and do a little bit of calculation with it. And we’re gonna say let’s make this, there’s still a big calculator. I tried to make it small. I’ll keep it there, though.
09:20
And we’re going to say this is going to be for example, the design income one to seven, five minus the 975, that’s going to be the 300. And then that’s the change, we take the change divided by the prior period to see the percent increase. So I’m going to take that change divided by the 975. That’s our increase, I could multiply it times 100.
09:40
To get to that 30.77 About and this is the type of analysis you’ll see commonly in job performance and things like that. Obviously, if you look at job performance of athletes, for example, people at bats, how many at bats does someone have? We can’t really measure how many times someone got on base For example, because if you have two different hitters,
10:02
and they get up to bat to bat different amounts of time, then it’s not really fair for to have measure one person that got like, way more at bats than the other person. So that’s so what we need are the percentages. So you’re going to use these kinds of percentages all the time, anytime you’re measuring performance, and it could be outside of financial performance,
10:22
it could be any kind of performance type of thing. And you’re trying to see what happened in comparison, one thing basically to another thing. So it’s very common horizontal type of analysis. In this instance, of course, we might be benchmarking ourselves and comparing ourselves to other companies that are in our particular industry.
10:41
And in they might have bigger dollar amounts, most likely they would, because we’re trying to copy them and we want bigger dollar amounts. So so we can’t compare the dollar amount changes, we can compare possibly the percent changes. And we could start to say, Okay, what’s the industry standard?
10:57
Is the industry going up? Is this a good period for my particular industry or not? Do my percent increases align with what’s changing in the overall market, and so on. So if we did a couple more of these, we can,
11:08
of course, do this one, this will be the labor to five oh, minus the 50, that’s going to be the 200 divided by the prior period, which was the 50, in this case, and we got the four times times 100, and you get the 400, that’s going to be a big change, obviously. So also note that when you look at these ratios, it’s only one kind of thing that you’re looking at. So it’s one angle, that you’re looking at something.
11:34
And just remember, a lot of people don’t like ratios, because, you know, they don’t really, they might not have as much experiment, experience with working with ratios. And ratios are just like anything else. It’s just like words, words, you can use one fact, to mislead someone, and then you know, you can pile a bunch of lies on top of one fact.
11:54
And in mislead people with words, we’re pretty good at catching that kind of thing. So we can say, hey, wait a second, you said one true thing, and then you just piled a bunch of lies on top of it. And we get pretty good at catching that. But with statistics, you know, the same thing can happen, you can use one statistic that can totally distort that’s a statistic, this statistic is still one piece of truth, or at least you know that it is what it is.
12:18
And then you apply and then you pile a bunch of lives on top of it, right? So we start to just trust this statistics, but it’s not really the statistics fault. It’s just one angle to look at it. And obviously, we need to be looking at things from multiple different angles. So obviously, if you had a situation like this, where there was nothing in the prior period, and you have something in the current period, you’re like,
12:37
well, there was 100% Decrease in this particular area, well, then you got to take into consideration the fact that the prior period was zero, and so on, and look at and look at that particular scenario in that instance. So what you want to do with these kind of with these, with these ratios, is try to see where the big differences are, you’re probably looking for those big differences and saying,
12:59
Okay, if there’s a difference over a certain percentage, I’m going to look into it like this percentage, I’m going to look into that one, and say, you know, why is that there? And then explain it and say, Can I explain? Is there a rationale? Was there a reason for this? Or is there something that I got to do? Or is there something I got to change? If I see this 100% change, I could say,
13:17
Okay, I know a reason for I could see that, you know, that doesn’t look as extreme as it otherwise would give it, it’s only a $50 charge. And it was, you know, there was nothing in the prior period. So I could probably explain that pretty easily if I was to, you know, spend some time to look in on it. So just a couple things to, to note there. Let’s do our standard kind of formatting.
13:38
Now going back up top and say we can do some customization of this report. So we’re going to customize it. And I’m going to say let’s get rid of the cents is our standard custom, we’ll make the negative numbers bracketed. And we’ll show them as red. And then I’m going to scroll down to the header and the footer.
13:57
And let’s say let’s say let’s call this not a Profit Loss, I’m going to just change the name to practice the fact that we can do so. And I’m going to call it a comparative income statement, say Income State Income Statement. And then it’s been accustomed to remove the footer, stuff that stuff on the foot. I want to clean foot, clean foot.
14:20
And then we’re going to say there’s no date, no time, no report basis, run it. And so now we’ve got this nice red, the red numbers are popping out for us here. So those might be where we’re going to put the emphasis on. And it looks pretty, pretty snazzy. Snazzy as some people say. Not many people anymore.
14:39
I think that was that’s like an older term. Maybe. I kind of like it. I’m bringing it back. It’s snazzy. I’m going to go back into my periods up top here and I think I want this custom period of 1111 one to 1130. Let’s run that. Just make sure I got so there it is. So I think I have My the period was looking a little bit different there.
15:03
So now it was pulled out the trusty calculator again, and just calculate some of these items. Again Ultrabase Ultrabase, can I make this smaller. And so for example, the income now too, so let’s just take this line item just for example. 3327 minus 2847 gives us the difference of 2480 difference divided by the previous period 3327 gives us hold on a second, we got the 3327 minus the 847 gives us two to 480 divided by the prior period.
15:40
The 847 gives us the 2.92 times 100 gives us that to 92%, about two to 93 about once we have formatted like in prior presentations, we won’t want to see the customization and then we’ll take a look at the sending options with an email printing it, exporting it to a PDF we’ll take a look at those options in future presentations.