We have spent a considerable number of articles exploring the various QuickBooks Online features and workflows. Now is when all your hard work setting up and using QuickBooks Online pays off. The QBO’s Report Center provides the tools for QBO Users to interpret data and glean valuable insights.
When I set up a client on QuickBooks Online (QBO) for their first time, I start with the end in mind. There are two primary goals for accounting: paying taxes, and recording business activity to analyze for growth.
I spend a lot of time with each business owner, asking dozens of questions about what information they need about their company. I tailor the implementation to their reporting needs, my main consideration how much time and effort they want to put into tracking.
On one side of the spectrum is using QBO as a glorified checkbook: fast, simple data entry that gives basic reports. On the other end of the spectrum, QBO has the tools to offer detailed analysis including job costing and item profitability, if the time is taken to enter more detail on each transaction.
The tradeoff is speed vs. complexity. Bookkeepers and accountants should always work with their clients to find a happy medium that provides the desired level of detail, in the time available to do the work. Also keep in mind that the more info you track, the more prone you are to inconsistent data entry.
What you get out of a company’s Reports depends on what you put in.
These considerations begin with the version of QBO you choose. Each subscription level of QuickBooks Online includes increasingly complex reports. The Simple Start version only has 20 reports, while the Plus version has over 60. As you turn on additional features such as Sales Tax and Payroll, their associated reports appear in the Report Center.
I always suggest to my business owners that they take a few minutes and try out all the reports in the Report Center. They’ll find new ways of exploring the data that they’ve probably never considered.
All reports can be customized and memorized so that together you can slice and dice daily transactions into useful information.
Some business owners desire to regularly pour over reports, but we’ve all had at least one client who really doesn’t care, as long as there’s money in the bank. An absolute minimum, it’s important that they understand how to read a Profit and Loss Statement and a Balance Sheet.
The Profit and Loss Statement (P&L) lays out income and expenses, showing how much profit (or loss) was made during a specific time period. Run this report monthly, year-to-date, quarterly, and annually. Customize it to include a Previous Year column to compare the last year’s growth!
A Balance Sheet shows all the assets, liabilities, and equity that explain the financing.
I discussed these reports extensively in our article about the Chart of Accounts.
If you’re using QBO Plus or Advanced, don’t overlook the Business Snapshot in the Business Overview section of the Reports Center. There you’ll see at-a-glance your significant Income accounts and Expenses. There’s also a great year-over year column chart to compare the current period with last year.
Note that you can use the drop-downs to see charts for Monthly or Quarterly, and filter out accounts as needed. At the bottom of the screen (not shown) are lists of open Accounts Payable and Accounts Receivable. Click on any Customer or Vendor to jump to their open transactions.
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Customizing Reports
Any report can be customized to drill in for analysis. The possibilities are endless!
Many of the options can be adjusted from the drop-downs at the top of the report. Start by playing with those.
- Modify reports so that they have additional columns for Classes, Periods, or Products and Services.
- Compare to previous years or periods.
For filters and other refinements, click the Customize button. For example, filter your P&L so it only displays a specific Customer or Product.
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Emailing Reports
Individual reports and report groups can be automatically emailed to stakeholders on a regular basis. I have mine scheduled to send a full set of reports with Excel attachments on the 15th of every month, which gives me enough time to reconcile and review before they go out.
Management Reports
Don’t overlook the third tab in the Reports Center for Management Reports. Use this Report creation tool to build professional-looking reports and email them to owners, board members, and managers.
Management Reports look like you spent valuable resources on desktop publishing to provide timely information. You’ll be a hero, for minimal effort.
Lesson Wrap-up
If you are a professional building a consulting or advisory business, developing expertise in reporting goes a long way toward demonstrating value to your clients. Creative reporting and analysis lets you seek out the 20% of business activity responsible for 80% of revenues. Leverage this awareness to grow profit!
If you are a QBO User, then having a thorough understanding of the reporting capabilities of QBO will give you the opportunity to stretch your use of the accounting system and get the most information from it. With time you can learn to easily customize the reports you need to identify the most beneficial information about your business.
While we have talked about Reports in this article the best way to learn QuickBooks Online reports is to see them in action. Please check out my ‘Running Reports to Analyze for Growth’ video to see demonstrations of useful reports, and how to modify and customize them. Use code IA10 for 10% off!
Make sure to also join my webinar with Insightful Accountant on August 12 at 12:00 p.m. Eastern Time, "Vendor Workflow in QBO." You can register here.