Use the Invoice Profitability by Customer report

Gross profit is the revenue from your sales after you subtract the cost of goods sold. These are the direct costs when you manufacture your products.

To get the gross profit, subtract the cost of goods sold from the revenue.

Gross Profit = Revenue − Cost of Goods Sold (COGS)

The Invoice Profitability by Customer report shows the values for:

• Gross profit in the ($) Diff column.
• Revenue in the Act. Revenue column.
• Cost of Goods Sold in the Act. Cost column.

Note: Each item on an invoice shows your gross profit but not your overhead or operating expenses.

Markup and margin measure different things. Understand the difference and make the correct pricing decisions.

For example: You buy an item for $50 and sell it for $75. Your profit is $25.

• The report uses Markup to express profitability as a percentage. It answers the question, "How much did I increase my cost to get the sales price?".
  • In this example, the percentage of markup is 50%. To get this, divide the profit, $25 with the cost, $50. Then, multiply the result with 100 to show the percentage. 
  • The % Act. Markup column in the report shows this value.
• Margin answers the question, "What percentage of my revenue is profit?".
  • In this example, the percentage of profit margin is 33.3%. To get this, divide the profit, $25 with the revenue, $75. Then, multiply the result with 100 to show the percentage.
  • The % Act. Margin column in the report shows this value. 

The value in the Actual Cost column comes from your company file’s inventory valuation method. It can either be average costing or FIFO (first-in, first-out).

Important: The cost shown is a snapshot taken at the moment the invoice is created. Later purchases of the same item at different costs won’t change the actual cost on existing invoices. This also applies to other profitability reports, like the Job Profitability report.

1. Go to Reports.
2. Select Customers & Receivables.
3. Select Invoice Profitability by Customers.
4. Select Customize Report to customize your report.

1. Go to Customers.
2. Select Customer Center.
3. Select Customers & Jobs.
4. Select a customer with an invoice whose profitability you want to see. You can either: 
   a. Select a customer from the Active Customers ▼ dropdown.
   b. Or, enter the name of the customer in the search field.
5. Select the row showing the invoice.
   Note: Make sure that it shows Invoice in the TYPE column and the invoice number, in the NUM column.
6. Double-click on the row to open the invoice.
7. Go to Reports, then select Invoice Profitability By Customer. 

The Act. Cost column shows values based on the cost of inventory and assembly items in your Item List. QuickBooks considers the cost of other item types like services, discounts, or other charges to be $0.00. This is also the standard behavior in other profitability reports.

The Job Profitability report shows all the income and costs of a project, from start to end.

The Invoice Profitability report shows the profit from each invoice.

Use both reports to track the progress of your projects and the profit from each billing cycle.

The profit is calculated based on the items, quantities, and prices on the invoice. If you change a quantity, add a discount, or update a price, the report will update. It will reflect the new profitability of that transaction.

No. This report shows gross profit from sales but not your overhead or operating costs. For the total profit of your business, run a Profit & Loss report.