Gross profit accounting is the method of financial record-keeping that focuses on reporting Company earnings in a way which measures profitability and excludes overhead costs. In short, it’s a way of figuring out how much money an entity has made from its operations by removing all expenditure not directly related to the production of goods or services. By subtracting these outgoings from total sales, gross profit is determined. This gives businesses a clear view of the amount of cash generated from their core activities – and allows them to accurately measure overall progress.