Profit and loss/Cash Flow reporting question

[Mike or Penny Novack]

On 5/30/2017 4:38 PM, Martijn Heuts wrote:
>   Hello,
> I am trying to understand the reporting part and trying to figure out my net profit. First I pull up my monthly "Cash Flow" report which shows all incoming money into my bank account andit shows all expenses taking out of my bank account (assets).
> Then there is the Income and Expenses report.  This report shows "Income" which doesn't add up to the actual income, so I assume it's "Charges" instead, right?
Stop right there.

I think you are confusing what a "cash flow" report is supposed to show 
(flow of cash) and what an "income statement" (aka P&L) is supposed to show.

Your example indicates the confusion.
a) You paid an expense by assuming a liability.
     That would show in P&L but NOT in cash flow
b) You late paid off this liability
     That would show in cash flow but NOT in P&L

BOTH of these reports can be important for a business for different 
reasons.  Business can be fine in terms of P&L (it's making a profit) 
but might not have cash on hand when needed. Or a business might be fine 
in terms of cash flow but facing long term troubles because losing money.

To see your net profit, use the "Income Statement" (aka: Profit and Loss 
aka Statement of Revenues and Expenses)

Michael D Novack