Track true e-commerce profitability with MerchantFlow P&L. Manage COGS, ad spend, expenses, and calculate accurate gross and net profit margins.

Profit & Loss (P&L) Overview

Profit & Loss tracking in MerchantFlow gives Shopify and WooCommerce merchants a complete view of true profitability by combining revenue data with cost of goods sold (COGS), advertising spend, operating expenses, and capital expenses in a single dashboard. Go beyond top-line revenue to understand which products, channels, and campaigns actually generate profit.

What Is P&L Tracking?

Profit & Loss tracking helps you understand:

True profitability - revenue minus all costs, not just gross sales
Profit margins - percentage of profit per product, category, and overall business
Cost breakdown - where your money goes across COGS, ads, and operations
Net profit - what you actually keep after every expense

Why it matters: High revenue does not always mean high profit. P&L tracking reveals which products are truly profitable and which erode your bottom line.

P&L Components

Revenue

Total sales from your connected e-commerce platform (Shopify or WooCommerce), tracked through synced order data.

Cost of Goods Sold (COGS)

Product manufacturing or wholesale cost
Shipping from supplier
Import duties and tariffs
Packaging materials

Advertising Spend

Google Ads campaigns
Meta (Facebook/Instagram) Ads
TikTok Ads and Snapchat Ads
Other paid marketing

Operating Expenses (OPEX)

Software subscriptions
Marketing costs
Operations and fulfillment
Overhead costs
Salaries and contractors

Capital Expenses (CAPEX)

Equipment purchases
Website development
Major infrastructure investments

How Profit Is Calculated

Gross Profit:

Gross Profit = Revenue - COGS - Ad Spend

Net Profit:

Net Profit = Revenue - COGS - Ad Spend - All Expenses

Profit Margin:

Profit Margin % = (Net Profit / Revenue) x 100

Accessing the P&L Dashboard

Navigate to Dashboard > P&L to view:

Overall profit margin (gross and net)
Total gross profit and total net profit
Profit trend over time
Profit by product and by category
Cost breakdown chart
Bank balance section
Expense summary
Burn rate calculation and runway estimate

How to Set Up P&L Tracking

Step 1: Add COGS

For accurate profitability, add Cost of Goods Sold for your products.

Method 1: Individual Products

Go to Dashboard > Products
Click on a product
Click "Edit COGS"
Enter product cost
Save

Method 2: Bulk Upload

Go to Dashboard > P&L > COGS
Click "Bulk Upload"
Download CSV template
Fill in product SKUs and costs
Upload completed CSV

Detailed COGS guide

Step 2: Connect Advertising Platforms

Ad spend automatically syncs from connected platforms:

Google Ads - if connected
Meta Ads - if connected
TikTok Ads and Snapchat Ads - if connected

Manual ad spend entry:

Go to Dashboard > P&L > Ad Spend
Click "Add Expense"
Enter amount, date, and campaign
Allocate to products (optional)
Save

Ad spend tracking guide

Step 3: Track Business Expenses

Record all operating and capital expenses:

Go to Dashboard > Expenses
Click "Add Expense"
Enter amount, date, category (marketing, software, overhead, etc.), and type (OPEX or CAPEX)
Optional: Attribute to project or channel
Save

Set up recurring expenses:

Toggle "Recurring" ON
Set frequency (monthly, quarterly, annual)
Automatically creates each period

Expense tracking guide

Step 4: Monitor Bank Balance

Track your cash position for a complete financial picture:

Go to Dashboard > P&L > Bank Balance
Click "Add Balance"
Enter today's bank account balance
Record regularly (weekly recommended)

View metrics:

Current balance
Burn rate (cash spending rate)
Runway (months until $0)
Balance forecast

Bank balance guide

All Costs Summary

Navigate to P&L > All Costs to view your complete cost structure:

Revenue total
COGS subtotal
Ad spend subtotal
Operating expenses subtotal
Capital expenses subtotal
Net profit (Revenue - All Costs)
Net margin %

Why it matters: Gross profit (Revenue - COGS - Ads) does not show the full picture. Net profit includes software subscriptions, overhead costs, team salaries, equipment purchases, and all other business expenses.

Example:

Revenue: $100,000
COGS: $40,000
Ad spend: $20,000
Operating expenses: $25,000
Gross profit: $40,000 (40% margin)
Net profit: $15,000 (15% margin)

True profitability is 15%, not 40%.

Profit Margin Benchmarks

Margin Level	Range
Excellent	40%+
Good	20-40%
Acceptable	10-20%
Low	Below 10% (evaluate pricing and costs)

Varies by industry:

Electronics: 10-20%
Fashion: 40-60%
Home goods: 25-40%
Beauty: 60-80%

Profit margin guide

ROAS Tracking

Return on Ad Spend is calculated automatically:

ROAS = Revenue / Ad Spend

Benchmarks:

3x: Minimum for most businesses
4-5x: Good
6x+: Excellent

Ad spend tracking

Troubleshooting P&L Issues

COGS not showing

Verify COGS entries exist for your products
Confirm the time range includes orders
Check that products were active during the period

Profit seems wrong

Verify COGS values are correct
Confirm ad spend is syncing properly
Check for missing cost categories
Verify currency settings

Ad spend not tracking

Confirm Google Ads or Meta Ads integration is connected
Verify a recent sync completed
Check that campaigns were active during the period

Frequently Asked Questions

How does MerchantFlow calculate profit margins?

MerchantFlow calculates gross margin as Revenue minus COGS and Ad Spend, and net margin as Revenue minus all costs including OPEX and CAPEX. Margins are displayed as percentages at the product, category, and business level.

Do I need to enter COGS for every product?

No. Focus on your highest-revenue products first. MerchantFlow's coverage metrics help you prioritize. Aim for at least 80% revenue coverage for meaningful profit calculations.

Can I track ad spend from platforms other than Google and Meta?

Yes. MerchantFlow also syncs ad spend from TikTok Ads and Snapchat Ads. For other platforms, you can manually enter ad spend in the P&L section.

How often should I update COGS?

Review and update COGS quarterly or whenever supplier pricing changes, you switch suppliers, or import duties change.

Last updated: March 14, 2026

Profit & Loss Tracking for E-Commerce