Profit & Loss and Balance Sheet
These are the two statements you'll be asked for by a lender, an accountant or the tax authority. Both are built from the same journal entries Iraca posts as you work, so they can't disagree with your Trial Balance or your journal.
Both are part of Books & Financial Reports (the Standard plan and above) and appear on the Reports page, under the Trial Balance. If you've left Standard, you can still read them through your last paid day; see Books & Financial Reports.
Profit & Loss
What you earned and what it cost, over the date range selected at the top of the Reports page.
| Line | What it is |
|---|---|
| Revenue | Sales booked in the period, including delivery and freight fees (Shipping & Delivery Income, shown as its own line) |
| Cost of sales | The cost of the goods behind those sales |
| Gross profit | Revenue less cost of sales, with the margin as a percentage |
| Operating expenses | Non-inventory bills, plus inventory adjustments — stock lost or found at a count |
| Net profit | Gross profit less operating expenses |
Inventory adjustments sit in operating expenses rather than cost of sales on purpose. Spoilage and shrinkage are worth seeing on their own line: if they were folded into cost of sales, your gross margin would quietly absorb them and you'd have no way to tell a pricing problem from a wastage problem.
Balance Sheet
What you own, what you owe, and the difference — as of a single date, which is the end date of the range selected at the top of the page. Unlike the Profit & Loss, it doesn't cover a period: it counts everything from the beginning up to that date.
| Section | What it holds |
|---|---|
| Assets | Cash, what customers owe you, marketplace money in transit, and stock at every stage |
| Liabilities | What you owe suppliers, goods received but not yet billed, and sales tax collected |
| Equity | What you put in, plus retained earnings |
Retained earnings is everything earned less everything spent, from the beginning up to the date. Iraca never closes the books into equity at year end, so your profit stays in the revenue and expense accounts and appears here as its own line. Without it the two sides would differ by exactly your profit to date.
A green banner confirms that assets equal liabilities plus equity. It should always be green: Iraca refuses to post an entry whose debits and credits don't match, which is what makes the statement balance. If it's ever red, something bypassed that check — get in touch.
Trial Balance: activity or balance
The Trial Balance now offers two readings of the same ledger, and the difference matters:
- Activity in period — what moved between the two dates. Useful for checking a month's work.
- Balance as of end date — what each account stands at on the end date, counting from the beginning.
For a balance-sheet account the second is the one you want. Stock you bought in June and didn't touch in July shows as nothing in July's activity, because nothing moved — but you still own it, and balance mode shows it. Revenue and expense accounts read naturally either way, since they only ever accumulate.
Both modes tie: total debits equal total credits.