Income Statement

First: What is an Income Statement?

An income statement is a report that shows you the result of your business during a specific time period, meaning:

• How much you sold (revenue)

• How much you spent (expenses)

• How much the sale cost you (cost)

• And finally:
  Did you make a profit or loss? And how much?

Very important:
The income statement does not show current balances, nor does it show what you have or owe,
but rather shows the result of activity during the period only.

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Second: What basis does the income statement report work on in Qoyod?

Qoyod operates on an accrual basis only, not on a cash basis.

This means:

• Revenue is recorded when the sales invoice is issued

• Expenses are recorded when the purchase invoice or entry is issued

• Payment or non-payment does not affect the income statement

Simplified example:

• You issued a sales invoice today

• The customer did not pay
  ️ The revenue appears in the income statement immediately

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Third: Where do the figures on the income statement come from?

The income statement relies on:

1. The document issue date (invoice / credit note / entry)

2. Which is the same as the date of the automatic accounting entry reflected

3. Whether the document is:

   • Sales invoice

   • Purchase invoice

   • Simple purchase invoice

   • Credit note

   • Manual accounting entry (after approval)

Any document that creates an accounting entry on an account:

• Revenue

• Or expense
  Will appear directly in the income statement after approval.

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Fourth: How do I access the income statement report?

From the main menu:

• Reports

• Income Statement

By default:

• The system displays the current financial period

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Fifth: Why might the income statement appear without any figures?

If you open the report and find it empty, this is not a system error.
Review these points in order:

1️⃣ The period selected in the report

• Make sure of the start and end dates

• Choosing the wrong period = empty report

2️⃣ No transactions during the period

• No sales

• No expenses
  ️ It’s normal for the statement to have no figures

3️⃣ Transactions recorded on accounts other than revenue or expense

• The income statement displays only:

  • Revenue

  • Expenses

  • Cost of goods sold

• Any movement on assets or liabilities will not appear

4️⃣ The financial year is closed

• When the financial year is closed:

  • The system creates a closing entry

  • Revenue and expense accounts are zeroed out

• Therefore:

  • The income statement after the closing date will have no figures

Solution:

• Generate the report with a date before the closing date

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Sixth: What happens when you close the financial year?

When using the financial years feature and closing the year:

• An automatic closing entry is created

• This entry:

  • Closes all revenue accounts

  • Closes all expense accounts

  • Carries forward net profit or loss to the retained earnings account you specified

Result:

• The income statement becomes zero

• Because the accounts have been actually zeroed out

Important note:

• You can generate an income statement showing revenue and expenses for a closed year
  as long as the report date is before the closing date

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Seventh: Why doesn’t the purchases account appear in the income statement?

In Qoyod:
There is no account called “purchases” that appears in the income statement

The reason is as follows:

Product is inventory

• When purchasing:

  • It is recorded on the inventory account

  • It does not appear in the income statement

• When selling:

  • The cost is transferred to the cost of goods sold account

  • And it appears in the income statement

Product is not inventory

• When purchasing:

  • The amount is recorded directly as an expense

  • It appears immediately in the income statement

Therefore:

• A purchase doesn’t necessarily mean an expense

• A sale is what determines when the impact appears

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Eighth: Does the income statement include VAT?

No
The income statement displays values excluding tax only

Why?

• Tax is neither revenue nor expense

• It is a liability managed independently

To see tax:

• VAT account statement

• Sales invoices tax report

• Purchase invoices tax report

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Ninth: How do credit notes appear in the income statement?

• When saving and approving the credit note:

  • The revenue or expense is reversed

  • And the impact appears immediately in the income statement by reducing revenue and expenses

Assignment:

• Does not change the accounting impact

• Only links the note to the invoice and changes the status

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Tenth: How do I know the true profit from a sale?

Profit in the income statement is calculated based on:

• Sale price

• Average cost of the product

• Cost of goods sold

You can review the automatic accounting entry from:

• Reports

• Journal

And it will show:

• Revenue account

• Cost of goods sold account

• Difference = Profit

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Eleventh: Comparing periods in the income statement

You can compare performance between:

• Days

• Months

• Quarters

• Years

By:

• Opening the report

• Clicking on advanced analysis

• Selecting “compare with previous periods”

• Specifying the number of periods (up to 13 periods)

Comparison is done:

• For each item individually

  • Revenue

  • Expenses

  • Cost

  • Net profit

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Twelfth: Generating the income statement for a specific project or product

From advanced analysis:

• Choose the filter type:

  • Projects

  • Or products

• Specify the required item

• Click search

It will show you:

• Its financial performance only

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Filter options and advanced analysis in the income statement report

The income statement report in Qoyod is not limited to just displaying a total profit or loss figure,
but provides very powerful tools to analyze financial performance according to what matters to you: period, project, customer, product, sales representative, branch, etc.

You’ll find all these tools inside the advanced analysis option at the top of the income statement report.

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First: Filter by a specific financial period

Through the “advanced analysis” option next to the filter options, you can specify a custom period instead of the default period.

What can you specify?

• Start date

• End date

Very important:

• The income statement is based on the document issue date (invoice / note / entry)

• Not on the payment date

Example:

• If you set the period from 01/05 to 31/05
  All revenue and expenses with documents issued during May only will be displayed.

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Second: Choosing the account level displayed in the report

Using the Level option in the filter options, you can specify the level of detail in the income statement.

You can choose between:

• Display account type only

• Level two

• Level three

• Level four

• Level five

• Level six

• Level seven

How do you understand this option?

• The lower the level you choose → very brief display

• The higher the level you choose → finer details for each account

Simplified example:

• Display account type only
  → Revenue / Expenses / Cost

• Level four or five
  → Shows you each sub-account within expenses or revenue

This option does not change the figures, only changes the display format.

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Third: Filter type

This is where the real power of the income statement report begins.

From the Filter type option in the filter options, you can analyze performance according to a specific dimension, such as: customer, project, product, or even a custom field you’ve created.

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1️⃣ Filtering using additional fields

If you have previously created additional fields (such as: sales rep name, deal type, sales channel…),
you can use these fields to filter the income statement.

How is this done?

• Choose filter type: Additional fields

• Choose the field name (example: sales rep name)

• Next to it choose the value (example: Ahmed)

Result:

• The income statement will show only revenue and expenses related to sales rep Ahmed

And this applies to:

• Any additional field that was previously added

• In sales invoices or others

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2️⃣ Filtering by core system entities

You can also filter directly according to the following system elements:

• Customers

• Suppliers

• Employees

• Projects

• Products

• Branches and warehouses

• Fixed assets

How to use:

• Choose the filter type

• Choose the element (example: Customers)

• Specify the customer name or more

Important note:

• You can choose multiple values together

  • More than one customer

  • More than one product

  • More than one project

And therefore:

• You see an income statement combined for them only

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Fourth: Comparison within the income statement (dimension type)

The Dimension type option in the filter options is used for comparison, not filtering.

Meaning:

• Instead of seeing one figure

• You see multiple comparison columns next to each other

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1️⃣ Comparison using additional fields

If you have an additional field such as:

• Sales rep name

You can:

• Choose dimension type: Additional fields

• Choose the field (sales rep name)

• Specify the values (rep 1, rep 2, rep 3)

Result:

• The income statement report will appear

• With each rep in a separate column

• With comparison of revenue, expenses, profit for each one

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2️⃣ Comparison by system entities

You can compare between:

• Customers

• Suppliers

• Projects

• Products

• Branches and warehouses

• Fixed assets

Example:

• Compare profit of project A with project B

• Compare performance of product 1 with product 2

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3️⃣ Comparison with previous periods

You can also compare over time, such as:

• Last year

• Last month

• Previous quarter

• Previous week

• Previous day

Then:

• Specify the number of periods to compare

• From one period up to 13 periods

Example:

• Compare this month’s performance with the last 6 months

• Or compare this year with the last 3 years

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Fifth: The drill-down feature

The drill-down feature is located in the top options of the income statement report.

Its function:

• To drill into the details of any figure displayed to you

How does it work?

• Click on any amount in the report

• Choose “drill down”

It will show you the details according to:

• Customers

• Suppliers

• Branches

• Warehouses

• Products

• Projects

• Employees

• Documents (invoices, entries…)

This feature does not change the report
but explains to you how this figure is composed step by step.

Supporting training video

Preparing reports and advanced analysis of financial statements in Qoyod
https://www.youtube.com/watch?v=H6m23tI5WRk