Leveraging QuickBooks Reporting: A Guide to Improve Your Business

QuickBooks Reports Are a Solid Bet–If You Use Them

Last month, Intuit hosted 3,000 accounting professionals and platform partners for the annual QuickBooks Connect Conference in Las Vegas, proving once again that small business owners and accountants are “all in” on the popular accounting software.

 And, for good reason. QuickBooks helps more than 8 million small and mid-sized businesses start up and scale up by managing income and expenses, and keeping track of a business’ financial health. Perhaps one of the most compelling features of QuickBooks for financial management is its vast reporting capability. QuickBooks data can offer powerful insights that you can parlay into winning accounting practices.

A sure bet, right? Not so fast. Much of the power of QuickBooks is going unused. According to an Intuit survey of U.S. product-based businesses, 84 percent of the companies “used a combination of pen and paper, and spreadsheets to manage inventory – spending 80 to 90 hours per month on this task.” Yikes.

That’s pretty revealing. And sounds like a losing hand, given the many actionable reports QuickBooks generates. 

Don’t Roll the Dice

If you don’t want to gamble on your financial performance, you should review the following reports on a regular basis to stay on top of your finances and make informed business decisions. 

Here are eight tips business owners can gain through QuickBooks:

Winning and Losing (aka the Profit and Loss Statement): This report, also known as an income statement, shows you how much money your business is making (or losing) over a given period of time. It’s the report card for your business. By reviewing this report regularly, you can see how well your business is performing and identify areas where you may need to cut costs (like the software subscription that no one uses) or increase revenue (like charging more for your amazing products or services). It’s also a good idea to run a comparison report to track trends over time.

Bonus time: Check out our video on Understanding Income Statements.

The Outlook (aka the Balance Sheet): The balance sheet is a snapshot of your business’s financial health at a specific point in time. It shows you what your business owns (assets), what it owes (liabilities), and what’s left over (equity). By paying attention to this report, you can assess your financial stability, and make sure you have the necessary resources to meet your short- and long-term goals.

Bonus time: Check out our video on Understanding Balance Sheets.

How ya doin’? (aka the Cash Flow Statement): The cash flow statement is the GPS of your company’s money. It shows you where your cash is coming from and where it’s going so you can make sure you always have enough gas in the tank to keep moving forward. It’s important to review this report monthly to understand your company’s liquidity, the ability to pay bills and invest in growth. It also helps you identify potential cash flow problems and take steps to address them before they become critical.

Bonus time: Check out our video on Mastering the Cash Flow Statement. 

No deadbeats allowed (aka Watch A/R Aging Summary): The A/R Aging Summary report shows you how long it’s taking your customers to pay their invoices. This report allows you to track any late-paying customers and take steps to improve your cash flow.

Pro tip: You can set up QuickBooks to automatically send reminders to your customers. 

The Favorite (aka Sales by Customer Summary): The Sales by Customer Summary report is like your company’s little black book; it shows you which customers are generating the most revenue for your business. Regularly checking out this report lets you understand who your most valuable customers are so you can focus your sales and marketing efforts on maintaining and growing these relationships.

High Exposure (aka Top Expense Categories): The Top Expense Categories report shows you which expenses are costing your business the most money. By reviewing this report regularly, you can identify areas where you may be able to cut costs and increase profitability.

Popularity Contest (aka Item Sales Report): The Item Sales Report is like the menu at your favorite restaurant. It shows you which dishes are most popular and which ones are making the most money. This report helps you understand which products or services are most profitable for your business, and how to allocate resources to promote these products or services. And also, customizing the report’s time frame and filter by customer, vendor, and class, as well as exporting the report to excel for further analysis is like adding some spicy salsa to your burrito, it gives you a deeper understanding of the data and can help you make more informed business decisions.

Get Real (aka Budget vs. Actual): The Budget vs. Actual report compares your actual financial performance to the budget you’ve set for your business. Many companies spend many hours developing a budget at the beginning of the year and then put it on a shelf. A better practice is to enter the budget in QuickBooks and review the budget to actual report on a monthly basis. This allows you to address the variances and more proactively manage your business. In fact, reviewing reports and variance analysis in general allows you to manage your business and make effective business decisions.

Doubling Down

If running reports seems old school to you, you can configure the QuickBooks Online dashboard, which provides an overview of your business activities. It includes a collection of metrics that help you analyze your data and track the performance of your operations in a convenient view.

The dashboard presents indicators that may affect your business and it displays this information in different ways for easy analysis, such as bar graphs. Additionally, QuickBooks can be integrated with many third-party tools so you can build a flexible, customized dashboard.

In the reporting tab, there is a report called Business Snapshot. (Reports > Business Overview >Business Snapshot), which is essentially a dashboard containing six snapshots:

•         My Income 

•         My Expenses

•         PY Income Comparison

•         PY Expense Comparison

•         Who Owes Me

•         Who I Owe

Click the green star to make the report a favorite and refer to it often. The My Income and My Expenses tiles include links that launch a Profit & Loss report. You can change the time frames, accounts and print from the tiles. This is a great starting point for any busy entrepreneurs aiming to get a quick look at their business.

An All-Around Winner

There’s no doubt that QuickBooks is a powerful tool for small business owners to manage finances and make informed business decisions, but the software’s reporting capability is often under-utilized. If you want in on “the action,” we strongly recommend that you review the highlighted reports regularly, or set up a QuickBooks dashboard to keep a steady eye on the prize. That’s the best tip we can give any small business owner when it comes to optimizing QuickBooks. 

If you need help with any QuickBooks reports, we can cover that bet. Contact us at info@junafinancial.com for assistance.