Why does the Gross Profit report differ from my P&L or Sales Register?

The Gross Profit report shows, for each sales invoice line, the selling amount, the buying amount (the cost of the goods sold) and the gross profit. It works from the invoice items, while the Profit and Loss Statement works from the General Ledger. So the two reports measure the same thing in different ways, and they rarely match exactly.

Where the buying amount comes from

Why it differs from the Profit and Loss Statement

• Other income and expenses. The P&L includes every income and expense account: freight, discounts posted by Journal Entry, write-offs, stock adjustments. The Gross Profit report includes only sales invoice lines.
• Dates. The P&L books the cost of goods sold on the Delivery Note's date; the Gross Profit report lists it on the invoice's date.
• Repost pending. After a backdated stock entry, ERPNext recalculates later stock values in the background (Repost Item Valuation). Until those are Completed, the buying amounts are old. Wait for the reposts, or check Repost Item Valuation for Failed entries.

The buying amount or valuation rate is zero

• The item had no stock value on the invoice date (stock received later, or received with zero rate). Check the Stock Ledger for the item and warehouse.
• A non-stock item without a Project or Cost Center has no buying amount.
• A Repost Item Valuation for the item is still Queued.

Gross profit is negative

The selling rate is lower than the valuation rate. Open the Stock Ledger for the item to see the valuation rate on that date. A negative value is often correct (a discount, or a sale below cost), or it shows a purchase entered at the wrong rate.

Returns and credit notes

• A return against an invoice (Return Against filled) is netted into the original invoice: its quantity and amounts reduce the original line.
• A stand-alone credit note (no Return Against) is listed separately, with negative values, when Include Returned Invoices (Stand-alone) is on (the default). Turn it off to leave them out.

If you filter by the return's own number in Sales Invoice, the report shows the return's values.

Columns, grouping and totals

• Group By changes the rows: Invoice, Item Code, Item Group, Brand, Warehouse, Customer, Customer Group, Territory, Sales Person, Project, Cost Center, Monthly, Payment Term.
• To add a column from the invoice, the invoice item or a linked document, click ⋯ → Add Column, then ⋯ → Save to keep it as your own report.
• The total row is calculated by the report. When you sort a column, the total row moves with the sort. Sort the data in an export instead.
• A column you need that is not in the report (for example a custom field): make a Report Builder or a custom report.

Related

• Profit and Loss Statement
• Why do my P&L, Balance Sheet or Trial Balance show unexpected numbers?
• Stock reposting