Income and Expenditure report versus Profit and Loss report

What is the difference between an Income and Expenditure report and a Profit and Loss report?

1. Income and Expenditure report

A cash-flow Income and Expenditure report shows exactly how much money your business has received (income) and spent (expenses) over a certain period of time (ie. it reflects your 'liquidity'). It is an excellent management and planning tool used to determine the short-term viability and liquidity of a business, specificially how well it is positioned to pay its bills and suppliers.

This report can be found by clicking on the Reports > Cashbook Summaries > Income and Expenditure menu option.

2. Profit and Loss report

A Profit and Loss report shows a business's

• total income
• total expenses, including non-cash journal entries such as depreciation
• profit or loss.

Unlike the cash-flow reports, the P & L report takes into account changes in the value of trading stock. It gives a more accurate measure of profitability over a given period. A P & L report is used to determine the financial performance of a company.

This report can be found by clicking on the:

• Reports > Financials > Profit and Loss menu option for Cashbook Plus!
• Reports > Management Financials > Profit & Loss menu option for Cashbook Platinum.