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Profit and Loss, Balance Sheet and Cash Flow

The Statements tab of Ledger & Finance produces the three primary financial statements straight from the ledger: profit and loss, balance sheet and cash flow, for one company or the consolidated group, with a comparison period. Because amounts are translated when they post and posted journals never change, a closed period's statements give the same figures every time they are run.

Where to find it

Admin Panel → Finance:

  • Ledger & Finance — the Statements tab; statement headings are renamed on the Chart of accounts tab

Architect Panel → ERP - Finance:

  • Ledger & Finance — the same console for architects

Producing a statement

  1. Choose the company and book at the top.
  2. Open Statements and choose Profit and loss, Balance sheet or Cash flow.
  3. Choose the Period (for the balance sheet, the Date): This month, Last month, This quarter, Last quarter, Year to date, Last financial year, or Custom dates with From and To (As at for the balance sheet).
  4. Under Compare with, choose Nothing, Prior period or Prior year.
  5. Under Scope, tick Consolidated group for the company and its subsidiaries (offered only when it has subsidiaries).
  6. Select an account to see its transactions on Account enquiry. Figures in brackets are negative. Export writes a CSV; Print prints it.

How each statement is built

  • Profit and loss: revenue, cost of sales and Gross profit; other operating income and operating expenses to Operating profit; finance income and costs to Profit before tax; tax to Profit for the period. A consolidated statement splits the profit into the part attributable to owners of the parent and to non-controlling interests.
  • Balance sheet: non-current and current assets, current liabilities, Net current assets, Total assets less current liabilities, non-current liabilities, Net assets, and equity with the year's unclosed result to Total equity.
  • Cash flow: the indirect method from balance-sheet movements, in Operating activities, Investing activities and Financing activities, with the Effect of exchange rate changes on cash, the Net change in cash, and cash at the start and end of the period.

Year-end closing journals are left out of the profit and loss, so the month holding a close still shows its trading.

Where an account appears

Each account's Statement heading on the chart places it. An account without one is placed by its type: income under revenue, expense under operating expenses, asset under current assets, liability under current liabilities, equity under equity. Its Cash-flow category places it in the cash flow; without one, bank accounts are cash, equity is financing and everything else is operating. Heading accounts with accounts under them appear as sub-totalled groups.

To word the headings your own way, open the Chart of accounts tab and press Statement headings…. You can rename a heading, or leave it blank to return to the standard name, but not add or remove one. The names apply to every company.

What goes wrong

  • A cost appears under operating expenses instead of cost of sales: give the account the Cost of sales heading on the chart.
  • "The balance sheet does not balance": rows were written to the ledger datastores directly. Check the trial balance.
  • "Nothing to report": no balances fall in the chosen period. Pick another period, or post journals first.
  • The cash flow does not reconcile to the bank: an account that holds cash has no Cash and cash equivalents category, or a non-cash account has it.

Worked example

For the September board pack the controller runs Profit and loss for This quarter compared with Prior year, and the Balance sheet as at 30 September compared with Prior year. The board prefers "Turnover" to "Revenue", so they rename the heading once with Statement headings…; every company's statements now print Turnover. They export both as CSV for the pack.

Recommendations

  • Classify every account with a statement heading and cash-flow category, rather than relying on defaults.
  • Close the period before producing final statements, so the figures cannot change afterwards.
  • Use Prior year for board and management packs; it removes seasonality.
  • Check the trial balance first: a statement is only as sound as the balances beneath it.