Accounting records can tell you a lot about a business, its costs, profitability, and financial position. But those insights are rarely found by looking at transaction-level details. Instead, business owners and executives look at reports that summarize vital information in a standard format.
When you have accurate accounting and the right reports, you can make informed business decisions and guide your business toward meeting its goals. Whether you look at them weekly, monthly, quarterly, or annually, the right reports can provide a snapshot of business performance and call attention to areas that need work.
QuickBooks Enterprise includes hundreds of commonly-requested reports and allows you to create or customize nearly any report your business might need. If you’re not sure where to start, here are a few reports you should run and review regularly.
Table of Contents
1. Profit & Loss
A Profit & Loss report shows how much money your business made and spent over a period of time. It generally consists of three parts: revenue, expenses, and net income or loss. If your revenues are higher than your expenses, you have net income. If costs are higher than revenues, you have a net loss.
Typically, you’ll run a Profit & Loss report monthly, quarterly, and annually. However, you may want to review a month-to-date or year-to-date Profit & Loss report just to see how you stand at a given point in time.
That way, if your results aren’t what you were hoping for, you have time to correct your course before the end of the accounting period. A few red flags on your Profit and Loss Statement include:
- Increasing sales with declining profits – In most cases, profits rise along with sales. If your sales are going up, but profits are going down, something is wrong. You need to review your direct costs and overhead to find out what is going on.
- Static sales – Most companies want to grow. So, if your revenues are flat from month to month, quarter to quarter, or year to year, you might need to re-examine your products or marketing plan.
- Rising overhead – Overhead costs have a tendency to creep up over time if you aren’t paying attention to them. Reviewing a comparative Profit & Loss statement allows you to take a closer look at expenses like insurance, rent, salaries, and utilities and look for cost-cutting opportunities.
2. Balance Sheet
A Balance Sheet provides a snapshot of what your business owns and owes at a point in time. It generally consists of three sections: assets (what you own), liabilities (what you owe), and equity (the book value of your business).
Many business owners only look at their balance sheet when they need a loan or send this report to their accountant or tax preparer. However, reviewing it periodically can help you spot potential errors like negative receivables or incorrect loan balances.
3. Statement of Cash Flows
Any savvy business owner knows that revenue doesn’t always equal cash in the bank. That’s why the Statement of Cash Flows is essential. It shows how much money came into and out of your business over a given period.
Typically, a Statement of Cash Flows is broken up into three sections:
- Cash from Operations – Cash flow from operations is essentially the money received and spent on running the business. This includes revenues and expenses from your business activities, as well as paying taxes.
- Cash from Investing Activities – Cash flows from investing activities is money received and spent on growing your business. It usually reflects the company’s purchases of new equipment or real estate. It can also include money received from selling old equipment and the income derived from stocks and other investments.
- Cash from Financing Activities – Cash flow from financing activities is money received and spent to finance your business operations. For example, if your company draws $20,000 from a line of credit, that would be included in the financing activities section. Paying out dividends to shareholders is also a financing activity.
The bottom section of your Statement of Cash Flows shows your net increase or decrease in cash for the period. Once you add that amount to the cash on hand at the beginning of the period, the result should be the total amount of cash your company has on hand.
The Statement of Cash Flows doesn’t offer a complete picture of your business like the Balance Sheet and Profit & Loss Statements do. However, it does provide useful information about your company’s ability to collect and retain cash, and as the old saying goes, cash is king.
4. Budget vs. Actual
The Budget vs. Actual report compares your business’s planned revenues and expenses to the actual results for a given period. The difference between budget and actual results may be expressed as a percentage, a dollar amount, or both.
Comparing your budget to actual numbers is a great way to get a quick look at your business’ performance and learn more about why things went right or wrong. Sometimes, variances are the result of mistakes in your budgeting or unforeseen events. Other times, it may reveal troubled areas of the business that you need to focus on getting back into line. Even if the reasons behind the variances are outside of your control, being aware of those differences allows you to make adjustments that can keep the business on track.
5. A/R Aging Summary
An Accounts Receivable (A/R) Aging summary is crucial for any business that extends credit to its customers. This report provides an overview of your client’s balances by age, showing items that are 30, 60, or 90, or more days late.
It’s one of the easiest ways to track whether your customers pay you one time. Regularly reviewing this report ensures you can stay on top of outstanding invoices.
If you find that customers are regularly taking 60, 90, or more days to pay your invoices, it could be a sign that your collection procedures aren’t working. You may need to reach out to customers as soon as their invoices become due or implement late fees to ensure you are able to collect the cash you need to pay your own bills.
6. Sales by Customer Summary
As its name implies, the Sales by Customer Summary report provides a breakdown of your revenue by customer. This report is useful for identifying your best customers from a sales perspective. It can also help you identify possible vulnerabilities. If a large percentage of your revenue comes from one customer, you might want to diversify your customer base. This ensures the loss of one customer won’t cripple your business.
7. Job Profitability Reports
Businesses that earn their revenues from long-term projects need to keep tabs on the costs of these projects to ensure they don’t run over budget. Job Profitability reports are useful for managing both costs and revenues for these projects.
There are two basic reports in QuickBooks Enterprise that can show you where your business is making or losing money.
- Job Profitability Summary. This report summarizes the profits you earned from each job during the date range selected for the report.
- Job Profitability Detail. The Job Profitability Detail report shows detailed revenues and expenses for one job. It compares your detailed ‘actual costs to date’ to your ‘income to date.’
Both of these reports can help you ensure you are making money on your jobs and improve your bidding process for future projects.
8. A/P Aging Summary
An Accounts Payable (A/P) Aging report is the counterpart of the A/R Aging report. Instead of showing what customers owe you, it shows what you owe to vendors and suppliers.
Reviewing your A/P Aging Summary report is useful for managing cash flow while keeping your vendors happy. You can use the report to see which suppliers need to be paid right away and which can be put off until you have more money in the bank. It can also signal when you might need to negotiate an extended payment due date with your suppliers.
9. Fixed Asset Listing
A company’s fixed assets include its buildings, equipment, furniture, computers, vehicles, and more. When you purchase a fixed asset, you can add it to your company’s Fixed Asset Listing in QuickBooks Enterprise.
When you add a new fixed asset to your list, you enter information such as the item name, identification number, purchase date, and location (if your business operates in multiple states). You can also assign it to a particular balance sheet account, such as Furniture and Fixtures, Vehicles, or Buildings.
It’s helpful to review this listing periodically to make sure that all of your equipment is reflected on the listing and remove any retired assets from your balance sheet. That way, you can ensure you’re taking full advantage of any depreciation deductions and aren’t overpaying your business’ personal property taxes.
No matter what type of business you’re involved in, the right reports can give you a better sense of your company’s finances and help you reach your business goals.
Every version of QuickBooks Enterprise 2020 and higher comes with Advanced Reporting, a powerful reporting tool that comes pre-loaded with hundreds of the most useful reports. You can also easily create customized reports based on your specific business needs.
It might take some time to get used to creating and interpreting the reports available in QuickBooks Enterprise, but once you do, you’ll be able to add a whole new dimension to running your business.