QuickBooks Online Industry Benchmarking presents ProAdvisors with the ability to see client trends and compare them to the market. So why is this helpful? Knowing your client’s position against the market trends helps you to make useful recommendations. Plus, sometimes you just want to know how you stack up against or with the competition.
As an advisor managing our client’s books, we know most of our clients struggle to pay bills, manage payroll costs, and make enough income to cover expenses. Managing these key factors alone is a job. There are so many pains of being an entrepreneur and I find it fascinating that people keeping working towards their dream. Knowing our clients need help means that each tool and piece of advice we can offer these clients helps them to have insight into how their business measures up.
Recently, during a client review, I was asked “how am I doing?” Their meaning of the question was how am I doing against other businesses? Relying on my first head knowledge of other clients I was able to talk them through an overview but with Industry Benchmarking my conversation could have been more robust with the addition of actual data and physical graphs. I believe often our clients want to see it’s not so green on other pastures. Having real insights and data to share with clients gives them a chance to not feel so alone plus it gives you, the ProAdvisor a tool to assist you if there is an issue.
How does it work and what does it do?
Industry Benchmarking compares your client’s gross and net profit margins against businesses in their industry, local area, with similar revenue. All data is collected and reported anonymously from at least 30 business with clients who have an accountant and up-to-date books.
In the Trends section of the Business Performance Dashboard you will see Industry Benchmarking. Once you assign an industry to your client graphs based on industry trends over the last twelve months will be generated.
How do we get it?
At least for now, Industry Benchmarking is only part of the QuickBooks Online Business Performance Dashboard. This means that only QuickBooks Online Accountant ProAdvisors will have Industry Benchmarking.
To get started follow these steps:
1) Use the QBO Navigation Bar to select Overview
2) From the Overview dashboard click Business Performance
3) Scroll down to Trends
4) Choose an industry based on your client’s business
New Industry Benchmarking that is part of the QuickBooks Online Business Performance Dashboard within QuickBooks Online Accountant.
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5) Once you assign an industry a line graph will be populated
6) Using the legend, you can see the past 12 months, the previous year and industry trends
7) To print the Business Performance Overview, choose Export to generate a PDF
Industry Benchmarking compares your client’s gross and net profit margins against businesses in their industry, local area, with similar revenue.
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Industry Benchmarking just went live on June 5, 2020. Currently, it does not appear that QBOA Your Books has this tool. As with many other features, give this a little time to roll-out to everyone within the QuickBooks Online Accountant community.
If your client’s industry does not have sufficient similar businesses, there may not be either enough or sufficiently qualified data to produce industry benchmarking. As data continues to be collected additional industry benchmarking should become available.