You’ve Tracked Income and Expenses — Now Let the Reports Talk

Melton Liggett
1 day ago
4 min read

Whether you’re running a business or a nonprofit, understanding your QuickBooks Online reports is what turns tracking into strategy.

You’ve entered your invoices, received payments, paid your bills, and recorded your expenses — well done! But what’s all that work actually telling you?

QuickBooks Online doesn’t just collect data — it builds a picture of your organization’s financial health. But only if you know where to look.

This post will walk you through the core financial reports in QuickBooks Online, explain what each one reveals, and show how the income and expense entries you’ve already made directly affect your bottom line — whether you’re running a business for profit, a church, or a nonprofit mission.

📊 Reports Are Only as Good as Your Entries

Let’s get one thing clear: QuickBooks Online is only as smart as the data you feed it.

If you’ve been following along with the last two blog posts, you now know:

How to track income using Estimates, Invoices, Sales Receipts, and payment links
How to track expenses using Bills, Expenses, and Checks

Every one of those entries drives your reports. And the more accurate and consistent your process, the more your reports will reflect reality — not just numbers.

Clean books = clear insights. Otherwise, it’s just noise.

🧾 The 3 Core Financial Reports in QuickBooks Online

1. Profit and Loss (P&L) Statement

For businesses: Profit and Loss Statement

For nonprofits: Statement of Activity

This report shows your income minus expenses over a selected time period. It tells you:

What you earned
What you spent
Whether you had a net profit or deficit

Business example: Are sales covering operating costs like payroll, rent, and marketing?Nonprofit example: Did unrestricted donations cover program costs this quarter?

If your income and expenses are properly categorized, this report helps you:

Analyze your income streams
Track overhead vs. mission spending
Compare periods (month-over-month, year-over-year)

Run it monthly, quarterly, and annually — and review trends, not just totals.

2. Balance Sheet

For businesses: Balance Sheet

For nonprofits: Statement of Financial Position

This report is a snapshot of your organization’s financial position at a specific point in time. It shows:

Assets: What you own (cash, receivables, equipment)
Liabilities: What you owe (accounts payable, credit cards, loans)
Equity or Net Assets: What’s left after subtracting liabilities from assets

Business example: Are you building equity, or are liabilities catching up with you?Nonprofit example: Are your restricted funds clearly separated from unrestricted?

This report is critical for lenders, boards, and anyone assessing your financial health.

3. Cash Flow Statement

For businesses: Statement of Cash Flows

For nonprofits: Statement of Cash Flows

While your Profit and Loss or Statement of Activity shows what was earned and spent, the Statement of Cash Flows shows what money actually moved in and out of your accounts.

This report answers:

When did cash enter the bank?
When did cash leave?
How much do you really have available?
- You can't pay your bills with Accounts Receivables

Business example: You invoiced $10,000 last month — but have you collected it?Nonprofit example: A grant was awarded in Q1, but funds are released monthly — are your actual expenses aligned with your cash flow?

If your cash flow doesn’t match your Profit and Loss, timing might be the issue.

Other Helpful Reports in QuickBooks Online

Accounts Receivable Aging Summary: Who owes you, and how long it’s been outstanding
Accounts Payable Aging Summary: Who you owe, and how close you are to being past due
Statement of Functional Expenses (nonprofits): Breaks costs down into program, administration, and fundraising — great for 990s and grant reports
Custom Reports by Class, Project, or Location: See data broken down by fund, department, or donor restrictions

Reading Between the Lines

Even if you’re not an accountant, there are a few key things to look for in your QuickBooks Online reports:

✔️ Are income and expense categories clear and consistent?

Messy categories = messy reports. If you’re guessing where things go, your reports won’t reflect your reality.

✔️ Are your bills being paid properly through the "Pay Bills" workflow?

If you're entering bills and paying them as expenses instead of through the proper bill payment function, your Balance Sheet may be off.

✔️ Are your restricted vs. unrestricted funds clearly separated?

Nonprofits need to know how much of their cash is truly available for use. Mixing these up can lead to overspending or compliance issues.

Tips to Improve Your Reports

Keep your Chart of Accounts clean — don’t let “Ask My Accountant” become a junk drawer
Reconcile your accounts monthly — even small mismatches can throw off reports
Customize your reports to reflect how you run your business or nonprofit