Reports and taxes

How the numbers are counted#

Reports open on your business's accounting method, set in Settings → Business: cash basis unless you've chosen accrual. On cash basis, income counts on the day it's paid, and costs on the day you pay them. An invoice you've sent isn't income yet, and a bill you haven't paid isn't a cost yet. (Most reports can be switched to the other basis: see below.) Here's how one month adds up on cash basis:

• A profit and loss (also called an income statement) is income received, less costs by expense category and equipment write-offs, plus any Interest income and Other income below the costs. What's left is net profit. A C corporation's goes on: Income before income taxes, then the corporation's own Income tax paid, then Net income.
• A retainer deposit isn't income when it arrives. It becomes income as it's applied to invoices.
• Income with no invoice, recorded on Income as Other income, counts the day it came in: a Sale without an invoice is part of Income received, and Interest income and Other income have lines of their own after the costs. See Invoicing and getting paid.
• Expenses you billed back to a client count as costs, and what the client paid you for them as income, so the two cancel out. Annual's profit and loss notes how much of its costs were billed back.
• Owner draws and distributions are money out, but they aren't in the profit and loss: they don't lower profit. Nor do tax payments, for anyone but a C corporation: that's the owner's own tax, so paid from the business it's an owner draw (or distribution). See Owner money.
• Under the profit and loss on Annual, Quarterly and Advanced, their printouts and the Accountant Packet: EBITDA, earnings before interest, taxes, depreciation and amortization. It's net profit with interest paid (the Interest expense category), any income tax and equipment write-offs added back, and interest earned taken out, to compare how the business itself did apart from its debt, savings, taxes and equipment. It's read from the statement, not part of it, and on the same basis as the statement. Taxes and licenses stay in costs.
• Equipment counts as you recorded it: in full the year it went into use, or a year of depreciation at a time. Equipment you sold or retired shows as Gain or loss on equipment sold or retired.
• Reports count recorded charges only. A subscription charge your Subscriptions tracker expected, with no expense recorded for it, is listed apart as Expected subscription charges not yet recorded, never added into costs or profit.
• A period still running counts to today, never ahead.

Your business might call clients or projects something else (matters, jobs, engagements); the words can be changed in Terms and features, and the reports follow them.

Cash basis or accrual basis#

Annual, Quarterly and most reports on Advanced have a Basis choice: Cash or Accrual. On accrual basis, income counts when you invoice it and costs when they're billed, whatever day the money moves. On Advanced, the choice is there for the Profit & Loss and its comparison, Income by Client, Expenses by Category, Project Profitability, a nonprofit's Statement of Functional Expenses, and the General Ledger, Trial Balance and Balance Sheet.

Each report opens on your business's accounting method for its year, and the choice switches it either way, for that view only. Taxes, the estimated taxes, the Accountant Packet and the dashboard's chart have no choice: they follow the method, because it's the one on your tax return. Setting the method, and what stays cash basis whatever it is, are in Cash or accrual.

On accrual basis the general ledger has these accounts as well:

• Accounts receivable, an asset: what clients owe on invoices sent and not yet paid. Sending an invoice adds to it, and a payment takes it off.
• Accounts payable, a liability: what you owe on bills not yet paid. A bill adds to it on its bill date, and paying it takes it off.
• Returns and allowances: short payments you wrote off, and refunds to clients other than giving back an overpayment. It's an income account that lowers income, so its balance is a debit, shown below zero among the income.
• Bad debts, an expense: invoices written off as not going to be paid. They counted as income when they were sent, so writing them off takes that back. Bad debt recovered, income: a payment on an invoice after it was written off.

These close at the end of each year with the other income and expense accounts. On the Balance Sheet, accounts receivable sits under the assets between cash and property, and accounts payable is the first of the liabilities. When clients have paid more than their open invoices come to, the receivable is below zero: it's shown among the liabilities as Client credits, what the business owes them. On cash basis none of these accounts appear.

On both bases, sales tax charged on invoices is Sales tax payable, a liability, never income; paying it to the state pays it down.

The four tabs#

• Annual: how a year went, against the year before. Opens on this year.
• Quarterly: one quarter, against the quarter before and the same quarter last year, then the year's estimated taxes.
• Advanced: a library of reports for any dates, the General Ledger and Trial Balance among them.
• Taxes: the tax year, ready for your accountant. From January through April it opens on last year.

The arrows beside the tabs step the year or the quarter back and forward. Advanced takes a date range instead.

Annual#

The year at a glance, against last year. While the year is still running it reads Year to date, and last year is counted to the same day, so the year so far is compared with the same stretch of last year.

• Five figures across the top: Income, Net Profit (Net Income for a C corporation, with its margin), Hours (with the share that was billable), Effective Rate (income for each hour you tracked) and Days to Get Paid, each with its change on last year.
• Income Through the Year, building month by month with last year behind it; Billed and Collected, what you invoiced against what came in; and Your Time.
• The year by Month: money in, money out and what's left, month by month.
• Who Paid (your top clients, and how long each usually takes) and Where the Time Went (hours by client).
• Projects: what each billed, its hours, its own costs and what's left. Needs a look flags one over its hours or budget, or past its due date.
• Profit & Loss, this year beside last, and Years at a Glance: income and hours for every year on record.

Quarterly#

The same picture for a quarter, beside the quarter before and the same quarter last year, so a slow summer is read against last summer, not spring. It opens on this quarter, or on the last full one in a quarter's first 30 days. Its Profit & Loss has EBITDA under it, for all three quarters, and when the quarter made a profit it ends with what to put away at your set-aside rate. Below it is Estimated Taxes for the year.

Estimated taxes#

When no employer takes tax out of your pay, you pay it yourself during the year, in installments: in the US, estimated tax. Quarterly helps you set money aside for it and keeps track of what you've paid.

• Periods: US estimated tax follows the IRS schedule, which isn't even: Jan – Mar (due Apr 15), Apr – May (due Jun 15), Jun – Aug (due Sep 15) and Sep – Dec (due Jan 15 of the next year). Calendar quarters are the plain four. EscBooks remembers your choice in this browser.
• Set aside (% of profit): one rate you choose, 25% to start, anywhere from 0 to 80%. It's applied to each period's profit (a C corporation's before its income tax, shown as Profit before tax); a period with a loss sets nothing aside. It's a savings rate, not a tax calculation.
• The period you're in shows Set aside so far and its due date. The table below gives each period's income, costs, profit, set aside, paid and due date, marked Paid, Partly paid, Not paid, or the days left.
• Record a Tax Payment: the period it's For, Paid to (Federal (IRS) or State), the Amount, Paid on, the account it was Paid from, and a Note such as a confirmation number. Federal and state are added up apart.
• Sales tax you paid to the state is recorded with Record a Tax Payment too, with Sales tax as its kind. It isn't estimated income tax: it pays down Sales tax payable, the sales tax your invoices charged, so it's in no period's tax paid, and it's neither a cost nor an owner draw.
• On accrual basis, each period's profit counts what you invoiced in it, paid or not, and bills by their bill date, so the set-aside is figured on that. Estimated taxes follow your business's accounting method for the year.
• For anyone but a C corporation, it's your own tax: paid from a business account, it's an owner draw (an owner distribution for a partnership or S corporation), never a cost, and it's counted in the year's draws on Owner and Taxes. A C corporation's is its own income tax: a cost in its profit and loss, counted when paid.

A C corporation pays its own estimated tax, with the last installment due December 15 instead of January 15, and the rate's hint mentions the flat 21% federal corporate rate plus your state's. How you file is set in Business tax structure.

Advanced: any report, any dates#

Reports/Annual

Reports

How the year is going, what to set aside for taxes, and everything your accountant asks for.

AnnualQuarterlyAdvancedTaxes

2026

Year to date · to Oct 29

Income

$78,410.00

↗ 12% vs 2025

Net Profit

$54,902.15

↗ 12% vs 2025

Hours

1,146h 20m

↗ 12% vs 2025

Step 1 of 4PauseStart over

1. 1On Reports, open Advanced: a library of reports for any dates.
2. 2Set the dates: a preset like Last quarter, or any range on the calendar. The arrows step it back or forward.
3. 3Pick a report from the library. Profit & Loss can show its months or quarters side by side.
4. 4CSV downloads it as a spreadsheet. Print opens it as a page, to print or save as a PDF.

Pick a report from the Library on the left, and set the dates at the top: a preset (This month, Last month, This quarter, Last quarter, This year, Last year and others), two clicks on the calendar, or dates typed in. The arrows step the range by its own length: a month steps a month.

• Profit & Loss: income, costs by category, and what's left. Columns shows the Total, or the range by Quarters or Months.
• Profit & Loss Comparison: the range beside the same dates last year, or the period just before, with the change in dollars and percent.
• Income by Client: what each client paid, their share, how many payments, and the days they took to pay.
• Expenses by Category: your own costs and what was billed back, how many expenses, and how many have no receipt.
• Project Profitability: each project's hours, what it billed on invoices issued in the range, per hour, its own costs (subcontractors included) and what's left.
• Subcontractor Payments: what each subcontractor was paid, and whether their W-9 is on file. A vendor paid for contract labor but not marked as a subcontractor is listed too, so you can mark them.
• Mileage Log: every business trip, with its date, purpose, client, distance, rate and amount.
• Sales Tax: by month, taxed invoices, total and taxable sales, the tax charged on invoices issued, the tax collected (its share of payments received), and the tax paid to the state. What's charged and not yet paid is Sales tax payable, a liability.
• General Ledger and Trial Balance: below.
• Accounts Receivable Aging: what each client owes you on the last day of the dates at the top, by how far past due. Each open invoice is in one column: Current (not past due), 1–30, 31–60, 61–90 or Over 90 days past its due date. Each client has a line with their invoices beneath it, and a total at the foot. Invoices in other currencies are listed apart, each currency with its own total, never added into the dollars.
• Accounts Payable Aging: the same for what you owe, by vendor, from the bills on Bills not yet paid.

The aging reports are the same on cash and accrual basis. Click a client, vendor, invoice or bill to open it. On a phone, each line shows its total, with the columns that have anything in them beneath it.

Income by Client, Expenses by Category and Subcontractor Payments can Compare with Last year or the Period before. A report never runs past today.

The general ledger#

The General Ledger is every dollar in your books as debits and credits to accounts, the way an accountant keeps them. Each account has its own heading, its opening balance, every line with the balance after it, and its closing balance:

• Assets: your bank accounts, Undeposited funds, and equipment at cost with its accumulated depreciation.
• Liabilities: your card accounts, Client retainers held, Sales tax payable, and what the business owes you (a loan, or expenses you paid personally).
• Equity: owner contributions, draws or distributions, opening balances, and the account each year closes into (below). For anyone but a C corporation, tax payments are a sub-account of the draws, Owner draws: estimated tax (Owner distributions: estimated tax), and a line under it, Total owner draws, estimated tax included, adds the two: the same total as the Owner page.
• Income (client payments and sales without an invoice), Interest income, Other income and each expense category, with depreciation and write-offs, and a C corporation's Income tax expense.

The books close at the end of each year. On December 31, the ledger has closing entries: every income and expense account goes back to zero, and the year's net income (or loss) moves to equity. Owner draws or distributions, the estimated tax among them, close into the same account. Which one depends on how the business files (set in Settings → Business):

• Sole proprietor: Owner's capital. The memo reads, for example, Year-end close 2025: net income to owner's capital, and Year-end close 2025: owner draws to owner's capital.
• Partnership: Partners' capital.
• S corporation or C corporation: Retained earnings. A C corporation's dividends and distributions, and an S corporation's distributions, close into it too.

So each year starts its income, expenses and draws at zero, and equity carries what the years before came to. Bank and card accounts, loans, retainers held, contributions and opening balances carry forward as they are. Years are calendar years, and the year in progress isn't closed until it ends.

Each balance is shown on its account's usual side: an asset or an expense grows with debits; a liability, equity or income with credits. Debits and credits always balance, and the report says so. Pick one Account to see only its lines; click a line to open the record behind it.

For bank balances to include client money, say which account each payment went into: Deposited to when you record it, or the account under each payment on the invoice; other income takes one the same way. Until then it waits in Undeposited funds. Owner draws, distributions and tax payments take a Paid from account the same way; money out with none waits under Paid from: no account recorded. The Month-End checklist lists any that are missing.

The trial balance#

The Trial Balance lists every account's balance on one day, debits in one column and credits in the other. Every entry posts equal debits and credits, so the two totals match. It's built from the general ledger itself, so the two always agree.

• The day is the last day of the dates at the top. For This year, that's today, and the report reads As of today's date.
• Accounts are grouped as Assets, Liabilities, Equity, Income and Expenses, named as the general ledger names them. The owner's estimated tax sits just under the draws. An account with nothing in it isn't listed.
• Income and expense accounts show the year so far, from January 1. Every other account shows its balance for all time.
• On December 31 of a finished year (Last year, for example), it opens Before closing: the balances before that year's closing entries, with income and expenses at the year's totals. That's the trial balance an accountant prepares a return from. After closing, under Year-end close, shows them back at zero, as the next year opens. The note under the table shows how equity gets from one to the other: its balance before closing, plus net income (or less a net loss), less the year's draws.
• Click an account to open its general ledger for the same dates. On a phone, each account shows its balance with Dr (debit) or Cr (credit) beside it.

CSV downloads it with each account's type, debit and credit; Print prints it as shown, before or after closing.

Taxes#

Everything your accountant or tax software asks for, for one tax year, on your business's accounting method for that year:

• The accounting method box on your return (Cash or Accrual), filled in from that method.
• The year at a Glance: Income (with any interest and other income under it), Costs, Net profit (Net income), Estimated tax paid (Income tax paid for a C corporation), Business miles, and what clients still owed you at the end of the year (or today, for this year).
• Before You Meet Your Accountant: a checklist. Expenses with no receipt, income to compare with the 1099s clients send you, W-9s still missing, contract labor paid to vendors not marked as subcontractors, equipment written off, and tax payments recorded.
• Your figures by line of the form you file: Schedule C, Form 1120-S, Form 1120 or Form 1065. Each expense category goes on the line it usually goes on; meals are shown in full, with the 50% that's usually deductible beside them. Which form is set in Business tax structure. On Form 1120, state income tax paid in the year is part of line 17, Taxes and licenses; federal income tax isn't deductible, so it's on no line.
• On accrual, Returns and allowances and Bad debts go on their own lines: returns and allowances on line 1b of Form 1120, 1120-S or 1065 and line 2 of Schedule C; bad debts on line 15 of Form 1120, line 10 of 1120-S and line 12 of 1065, and on Schedule C among the other expenses in Part V. Bad debt recovered is other income.
• In the year your accounting method changes, a change-of-method worksheet: receivables less payables on January 1, the Section 481(a) adjustment. See Cash or accrual.
• Other income goes on its own line of each form. A sale without an invoice is gross receipts. Interest income is line 5 of Form 1120; for an S corporation or partnership it's portfolio income on Schedule K (line 4 of 1120-S, line 5 of 1065), and for a sole proprietor it's reported on Schedule B, not Schedule C, so those are listed after the form's lines, marked as such. Other income is line 10 of Form 1120, line 5 of 1120-S, line 7 of 1065 and line 6 of Schedule C.
• Income by Client (with Sales without an invoice, when there are any) and Expenses by Category for the year.
• Subcontractors (1099-NEC): what you paid each one, their W-9, and whether a 1099-NEC is likely needed, due to them by January 31. The threshold is $600 through 2025 and $2,000 for 2026. From 2027 the reporting threshold is adjusted for inflation; the IRS's 1099-NEC instructions for that year give it. Payments by card or payment app aren't on it: the card network or the app reports them on a 1099-K.
• Mileage, Estimated Tax Paid (Income Tax Paid; federal and state apart, with Record), Equipment Write-offs with anything Sold or Retired (for Form 4797), and Subscription Charges to Check.
• Owner Draws (Owner Distributions for a partnership or S corporation, Dividends and Distributions for a C corporation): money you took out. It isn't a cost. For anyone but a C corporation, Estimated tax paid from the business is on its own line, in the total. Record adds one; the pencil corrects one, with a confirmation of what changes, and the bin removes it.

Printing and spreadsheets#

• Annual and Quarterly: CSV and Print at the top of the page. The CSV has each month's income, costs, profit (a C corporation's income tax and net income) and hours, Annual's with EBITDA and any interest and other income too, then the totals (Quarterly's with EBITDA) and who paid.
• Advanced: CSV and Print on the report itself, with its dates, columns and comparison as you set them.
• Taxes: Accountant Packet prints the whole tax year on a few pages, with the year's trial balance, before closing, on a page of its own. Spreadsheets for Your Accountant has every line behind the numbers: Income (other income among it, by type), Expenses (with the form line of each), Mileage log, Equipment, Subscriptions not recorded and Subcontractors (1099).

Print opens the report as a page of its own, laid out for paper. Print / Save PDF prints it, or saves it as a PDF to send. CSV files open in Excel, Numbers or Google Sheets.

What your accountant will use#

1. The Accountant Packet from Taxes, for the year at a glance, the figures by form line, and the trial balance.
2. The General Ledger for the year, as a CSV.
3. The spreadsheets on Taxes, for the detail behind each figure, receipts noted.

Work through Month-End for each month first, so every statement is in and every line is accounted for: see Month-end.