Profit & loss

Your P&L is built from the ledger you post to, for any date range, with no close step. Pick a period and Ledfra sums every income and expense entry inside it. Accountants call this an income statement; the two words mean the same report.

Where the balance sheet is a snapshot of where you stand, the P&L is a span of time: did the business make money between these two dates, and where did it come from?

What it answers

The report has two sides — Income and Expenses — each an expandable tree matching your chart of accounts, and a single net figure at the top. That net figure is the answer to the question people actually asked.

For a platform that moves money on behalf of others, the number is only meaningful if the structure underneath is right. A marketplace that collects $100 per booking and keeps $10 has revenue of $10, not $100. The other $90 never touches this report — it is a liability from the moment you collect it, and paying it out later is not an expense. Get that wrong and your P&L overstates revenue by an order of magnitude while the ledger balances perfectly.

Choosing a period

Date ranges are half-open: the start is included, the end is not. A range covering July runs from July 1 up to — but not including — August 1. That sounds like a detail until you compare two adjacent months and find a day counted twice, which is exactly what an inclusive end date causes.

Ranges are timezone-aware, so “last month” means last month where you are. The backend stores every instant in UTC and applies your calendar boundary at read time, which is why a team in New York and a team in Tokyo can read the same ledger and both be right.

The trial balance uses the same range control, so the two reports never disagree about which period you are looking at.

Reading the report

• Net total — income minus expenses for the period, at the top.
• Income and expense trees — categories roll up their children; leaves are your control and template accounts.
• Sort — largest value first by default, because the question is almost always “what is driving this?”
• Charts — bar or pie breakdowns for proportion rather than amount.
• Show archived accounts — off by default; retired accounts stay out of the way.

Cumulative net income across the period

Alongside the totals, the report plots profit accumulating through the range — labelled Cumulative Net Income in the app. A single net figure hides shape: a flat month and a month that lost money for three weeks then recovered can produce the same total. The curve shows which one you had, and roughly when it turned.

It agrees with your balance sheet by construction

Ledfra never posts period-closing entries. Income and expenses are not swept into equity by a job that has to run — retained earnings on the balance sheet is computed from the same entries this report reads, since inception.

So a since-inception P&L ties to balance-sheet retained earnings automatically. There is no reconciliation between the two reports, because there are not two sources of truth to reconcile. That is the practical meaning of “no reconciliation debt”: it refers to Ledfra's internal consistency, not to reconciling against your bank.

Limitations

Where to go next

1. Balance sheet — the position half of the picture.
2. Daily activity — the same idea at one-day resolution, with the transactions behind it.
3. Marketplace example — a worked build where the revenue distinction above is the whole point.
4. What is Ledfra? — the ledger these reports read from.