Bookkeeping and accounting software is a powerful small business tool — yet its immense value beyond data entry is frequently overlooked.

Many business owners don’t realize that by taking the time to set up their software to meet specific needs, it will then produce reports that speak directly to the health and wellbeing of their business.

But first, as a business owner, you need to plan what it is you want your software to report on. Start by figuring out the information you need to effectively run your successful business, and then work backwards to collect and input the data needed to generate that information.

Because QuickBooks (or other accounting software, although QuickBooks is our absolute favourite) can be structured to generate any type of report you need. But only if you know what it is you need.

For example, if your business sells a number of different products and you would like to determine the profitability of each over a period of time, your accounting software can analyze sales by location (i.e. online, in store, by phone), by customer type and even by time of day or week. It’s all about how the system is constructed to review the data you (or your bookkeeper) meticulously input.

This type of data then gives you the information you need to understand business levers, make business growth decisions and/or provide detailed reports to shareholders.

 

Reports tell you what drives your bottom line

Understanding what drives your business’s bottom line is another example of how QuickBooks can analyze the health and wellbeing of your business. You may know that your bottom line looks good, you may even be able see it in black and white on your bank statement, but what fuels that bottom line is unknown. A QuickBooks report can analyze the data entered and give you a clear understanding of the products or services that lead the charge versus the ones that have lower profit margins (but may open the door to greater opportunities — yet another thing QuickBooks can tell you).

Setting up QuickBooks to generate the much-needed reports to understand your business levers so that you can make the right business decisions is not something every business owner wants to devote time and energy towards. Reviewing the reports, yes; working out the fine details to direct the data to generate the necessary reports, no. That’s something we can do.

Reviewed your QuickBooks reports and need to find innovative ways to drive revenues? Our next blog post will offer up 5 great revenue-boosting tips.