Your Profit and Loss (P&L) statement—often called an Income Statement—is an essential tool for understanding your business’s financial health. Clearly presented within Joy Pilot, your P&L provides a straightforward summary of how much money your business earns, the cost of providing your goods or services, and the expenses you incur. This insight helps you make smarter business decisions, manage costs, improve profitability, and fulfil your financial reporting obligations.
This guide will clearly explain how to access and read your Profit and Loss Statement in Joy Pilot, highlight why it is important, and outline your various reporting responsibilities.
Why the Profit and Loss Statement Matters for Sole Traders, Freelancers, and Contractors
Your Profit and Loss Statement is more than just a report—it’s your go-to tool for understanding where you stand financially, and it plays a major role in how you manage taxes, plan ahead, and grow sustainably.
Tracks Your True Earnings
Your P&L doesn’t just show how much you’ve been paid—it shows how much you’ve actually earned after business expenses. That means you always know what’s really going in your pocket, not just what’s invoiced or in the bank.
Helps With Tax Planning and Understanding Tax Brackets
Because your net profit (after expenses) is what determines your tax obligations, it’s critical to keep tabs on your P&L. It helps you:
See if you are making money
Estimate taxes owed
Know where you sit in your income tax bracket
Avoid unexpected tax bills
This is especially important in systems with progressive tax rates.
Supports Tax Return Filing
When it’s time to file your return, your P&L gives you the exact income and expense figures needed. Joy Pilot makes this easy by generating the report automatically and formatting it cleanly for your accountant or tax return.
Shows Trends, Costs, and Opportunities
Checking your P&L regularly reveals:
Seasonal trends in income
Opportunities to cut or optimise spending
When to raise rates or shift your focus to more profitable services
Helps Prove Your Income
If you apply for a loan, mortgage, or lease, your P&L offers a reliable way to show consistent earnings—even without payslips or an employer.
How to Access Your Profit and Loss in Joy Pilot
To find your Profit and Loss Statement in Joy Pilot, simply follow these steps:
Select Reporting from the main menu, and select the Profit and Loss menu option
Set your desired Period from the drop down menu or input a custom range of dates using the Date Range fields.
Click + Create Report to see your statement
➡️ Once your report is generated, you can download it as a PDF or as a CSV file using the blue Download button at the top of the page, next to Create Report button.
Understanding the Main Sections of Your P&L
Your Profit and Loss Statement in Joy Pilot contains several important sections:
Income
What is it? Income is the full amount your business earns from providing goods or services before deducting any expenses.
Why is it important? Growing income (revenue) is typically a positive indicator that your business is performing well.
Cost of Sales (Cost of Goods Sold - COGS)
What is it? This is the direct cost of providing your products or services. It commonly includes things like raw materials, direct labour, or inventory purchased for resale.
Why is it important? Managing your cost of sales carefully helps maintain consistent profit margins.
Gross Profit
How is it calculated? Revenue minus Cost of Sales.
What does it show? Gross Profit indicates how efficiently your business converts sales into profit before deducting broader operating expenses.
Administrative Costs
What are they? These are general costs related to running your business, such as rent, utilities, advertising, professional fees, software subscriptions, and salaries.
Why are these significant? Keeping an eye on your operating expenses can improve your business’s bottom line and profitability.
Net Profit Before Tax (Operating Profit)
How is it calculated? Gross Profit minus Administrative Costs.
Why does it matter? Operating Profit gives you clarity on your business’s profitability from day-to-day operations, before taxes are applied.
Net Profit After Tax
How is it calculated? Operating Profit less any taxes payable.
Why is this key? The Net Profit After Tax reveals exactly how much your business truly earns, available for reinvestment, distribution, or future growth.
Understanding Your Reporting Obligations
As a sole trader, freelancer, or contractor, you're responsible for accurately reporting your business income and expenses to your local tax authority. Your Profit and Loss Statement plays a central role in that process.
What You’re Generally Required to Do:
No matter where you’re located, you’ll usually need to:
Include your business income and deductions in a personal or business tax return
Lodge returns periodically (often once a year, but could be more frequent)
Keep financial records for a set number of years (often 5–7 years), including your Profit and Loss Statement
Your Profit and Loss Statement is typically used to:
Calculate tax owed based on your net profit
Provide supporting evidence if your return is reviewed
Share with accountants or financial advisors
Apply for loans or grants
📌 Important: Record-keeping requirements, tax return forms, and deadlines vary by country and business type. Always confirm what applies to you.
Helpful Links to Government Tax Agencies
Australia – Australian Taxation Office (ATO)
New Zealand – Inland Revenue (IRD)
United Kingdom – HM Revenue & Customs (HMRC)
✅ Tip: If you operate in another country, check your national tax office website or speak with a qualified accountant.
Using Your Joy Pilot Reports Effectively
Joy Pilot helps you meet your reporting obligations and simplify day-to-day financial management:
Categorise income and expenses accurately, so your records stay clean and organised
Export your Profit and Loss Statement as PDF or Excel files for easy sharing with accountants, advisors, or tax authorities
💡 Bonus: In addition to Profit and Loss reporting, Joy Pilot also gives you real-time insights into your personal tax position. Based on your current earnings and expenses, the platform estimates how much income tax you may owe.
For users in countries with progressive tax systems (like Australia, New Zealand, and the UK), this feature also helps you keep an eye on which tax bracket you're in—so you’re not caught off guard when moving between bands or thresholds.
🔍 Want to understand how this feature works?
Check out our guide: Understanding Your Personal Tax Reports in Joy Pilot
Glossary: Simple Explanations of Common Profit and Loss Terms
Revenue (Income): Money earned from selling products or services
Cost of Sales (COGS): Direct costs incurred in producing goods or services
Gross Profit: Revenue minus COGS; profit before operating expenses
Operating Expenses: General business costs, not tied to specific products or services
Operating Profit (Net Profit Before Tax): Profit after deducting operating expenses from Gross Profit
Net Profit (Net Profit After Tax): Profit remaining after taxes and extraordinary costs
Summary
Your Joy Pilot Profit and Loss Statement offers a clear, accurate view of your business’s financial performance. Regularly reviewing this report helps you make informed decisions, manage expenses, stay compliant, and plan for future growth.
Understanding Your Balance Sheet
Understanding Your Personal Tax Reports