A funnel plot is a graphical method to evaluate health‐care quality by comparing hospital performances on certain outcomes. So far, in nephrology, this method has been applied to clinical outcomes like mortality and complications. However, patient‐reported outcomes (PROs; eg, health‐related quality of life [HRQOL]) are becoming increasingly important and should be incorporated into this quality assessment. Using funnel plots has several advantages, including clearly visualized precision, detection of volume‐effects, discouragement of ranking hospitals and easy interpretation of results. However, without sufficient knowledge of underlying methods, it is easy to stumble into pitfalls, such as overinterpretation of standardized scores, incorrect direct comparisons of hospitals and assuming a hospital to be in‐control (ie, to perform as expected) based on underpowered comparisons. Furthermore, application of funnel plots to PROs is accompanied by additional challenges related to the multidimensional nature of PROs and difficulties with measuring PROs. Before using funnel plots for PROs, high and consistent response rates, adequate case mix correction and high‐quality PRO measures are required. In this article, we aim to provide insight into the use and interpretation of funnel plots by presenting an overview of the basic principles, pitfalls and considerations when applied to PROs, using examples from Dutch routine dialysis care.