The income statement tells you whether the company made or lost money each month. It starts from what you sold, subtracts taxes, costs and expenses, and arrives at the net result. It's a management income statement, built from what you already record in Finances. It doesn't replace your accountant's, but it shows the result during the month, without waiting for the books to close.
Go to Reports › Income Statement. The income statement is part of the Enterprise plan. On other plans, the menu item shows an upgrade notice.
For the example we'll use Estúdio Aurora, Marina's design studio, in October, when it received R$ 18,000 from clients.
The rule that applies to the whole statement
The income statement works on an accrual basis: each entry goes into the month it belongs to, not the month the money moved. When no accrual month is set, the due date's month applies. Of income and expenses, what counts is what was received or paid, fully or partially. What's still open doesn't count yet.
That's why the income statement and the cash flow for the same month rarely match. Cash flow follows the date of the money; the income statement follows the accrual month.
The yearly view
The page opens on the year chosen under Year, with three cards (Net Revenue, Gross Profit and Net Income) and a table with one row per month: Gross Revenue, Deductions, Net Revenue, Gross Profit and Net Income. The result shows in green when positive and in red when negative.
Click a month to open that month's Detailed Income Statement.
The month, line by line
This is Estúdio Aurora's October income statement, with the source of each number:
- (+) Gross Operating Revenue: R$ 18,000.00. Income received in the month in operating revenue categories, such as Sales. Café Serra Azul's first installment of R$ 3,000 is here.
- (-) Revenue Deductions: R$ 360.00. Taxes classified as Revenue Deduction, one per line. The ISS came from the bill recorded for October.
- (=) Net Operating Revenue: R$ 17,640.00.
- (-) COGS: R$ 0.00. The cost of what was sold, which you enter by hand. The studio sells services, so Marina left it at zero.
- (=) Gross Profit: R$ 17,640.00.
- (-) Operating Expenses: R$ 8,425.00, split into:
- Administrative: R$ 3,475.00, the R$ 3,200 rent and the Adobe subscription.
- Sales & Marketing: R$ 600.00 in ads, recorded in the Marketing category, which Marina created with the "Sales & marketing expenses" line.
- Payroll: R$ 4,350.00, October's net payroll plus the INSS and IRRF bills.
- (-) Depreciation: R$ 250.00. Entered by hand, for the wear on the computers.
- (+) Other Revenue: R$ 0.00. Income outside operations, recorded in categories with the "Other revenue" line, such as selling a used piece of equipment.
- (=) Operating Income (EBIT): R$ 8,965.00.
- (+/-) Financial Result: -R$ 3.50. Financial income (investment yield) minus financial expenses (loan interest, bank fees). Only the collection fee came in here.
- (=) Earnings Before Tax (EBT): R$ 8,961.50.
- (-) Profit Taxes: R$ 864.00. IRPJ, estimated because October's bill hasn't been recorded yet.
- (=) Net Income: R$ 8,097.50.
The R$ 30,000 working capital loan that came into the account in October doesn't appear: a loan is debt, not revenue. Once the installments start, only each one's interest will show up under Financial Result.
Where each line comes from
Categories
Income and expenses land on the line of their top-level category:
- Sales and Own Business go into Gross Operating Revenue.
- Investments and Passive Income (income) and Loans and Bank Fees (expenses) go into Financial Result.
- Payroll goes into the Payroll line.
- All other default expenses go into Administrative.
For the top-level categories you create, you choose the line: the Income statement line field in the category form (Records › Categories) offers administrative, sales & marketing or payroll expenses, or financial result, for expenses; and operating revenue, other revenue or financial result for income. With no choice, an expense goes to Administrative and income to Operating revenue. Subcategories follow their main category's line, and default categories keep theirs.
An expense with items in different categories is split across each item's line.
Taxes
Taxes come in through the tax type's DRE Classification: Revenue Deduction, Profit Tax or Payroll Charges and Withholdings (which goes to Payroll). For each type, the bill recorded for the period counts, paid or not. With no bill, the income statement estimates from the configured rate and calculation base. Payroll charges are the exception: without a bill, they aren't estimated.
Paying a bill creates an expense for cash purposes, but the income statement doesn't add it again, because the tax already came in through the bill.
Payroll
Payroll goes into the Payroll line by reference month, at the net amount, even if it hasn't been paid yet. The INSS and IRRF bills complete the gross amount. The expense created when you pay the salary isn't added again.
Loans
From each paid installment, only the interest comes in, as a financial expense. The principal is debt repayment and stays out.
What you enter by hand: COGS and depreciation
On the Detailed Income Statement, the (-) COGS and (-) Depreciation fields are editable. Type the month's amounts and click Save. The result is recalculated right away.
- COGS: the cost of goods or products sold. If the company resells or manufactures, enter the cost of what went out in the month. Service companies usually leave it at zero.
- Depreciation: the loss of value of the company's assets in the month. A R$ 6,000 computer with a two-year useful life depreciates R$ 250 a month.
The values are saved per month, for each company.
Export
Use the export button to download a PDF, Excel or CSV file. From the yearly view, the file has all 12 months. From the Detailed Income Statement, it has the open month.
How the income statement connects to the rest
- Income and Expenses: received and paid ones make up revenue and operating expenses, by category.
- Categories: decide each entry's line.
- Taxes: bills and estimates make up deductions, profit taxes and personnel charges.
- Payroll: the reference month's net amount goes into Payroll.
- Loans: installment interest goes into Financial Result.
- Receipts: collection creates the income, and the fee becomes a financial expense.
Who can do what
Every company role, including Viewers, can read the income statement. Saving COGS and depreciation and exporting require the Member role or higher.
Where to go next
- Taxes: register tax types with the right classification.
- Categories: understand which category lands on which line.
- Cash flow: the money view, next to the result view.
- Payroll: how to record the INSS and IRRF bills so the income statement shows the gross cost.
In short: the income statement adds up, by accrual month, received income and paid expenses by category, subtracts taxes from bills or estimates, includes payroll and interest, takes the COGS and depreciation you enter and shows, month by month, whether the company made a profit.