512 Solar Case Study

Company Details

• Company: 512 Solar
• Location: Austin, TX
• Industry: Solar Energy
• Goal: Reform Profit Reporting

Benefits

• Quickly understand profit margins by client, project, or line of business and make pricing, operations, and forecasting decisions accordingly
• Minimize errors by pulling all data directly from the accounting system (reconciled to true bank account activity)
• Save countless hours of data entry and say goodbye to tedious offline spreadsheets

Profitability Reporting is Key For Strategic Decisions

Accurate reporting continues to be a pain point for American businesses

Many business owners struggle to answer key questions about profitability for a specific time period, line of business, product, client, or project. This understanding is critical for operations, growth, and forecasting, yet the answers aren’t always easy to see. In raw form, financial reporting often falls short of providing insights that guide strategic decisions.

Challenge

Outdated accounting practices

Austin, TX-based 512 Solar (a residential and commercial solar energy and electric vehicle charger installation and service company) wanted an easier, faster, and more accurate way to answer key questions about profitability. But discrepancies between systems, inaccurate data, and a cash-based accounting system made it nearly impossible to determine which periods, projects, and lines of business were the most profitable.

Like many businesses, 512 Solar tried to supplement inadequate financial reporting by manually recording values into offline spreadsheets — a process that was tedious and time-consuming, yet still didn’t provide the financial picture they needed.

Solution

Transforming financial reporting

By taking a deep dive into the company’s operational and financial processes, PlotPath transformed 512 Solar’s reporting and analysis, making it more accurate, efficient, and insight-rich:

Revenue Recognition: Designed and implemented a process to simplify invoicing and recognize revenue when installations were performed — not when invoiced or cash collected — using accrual-based prepayments and revenue recognition accounting.

COGS Matching via WIP: Created a process to record cost of goods sold at the project level on the same date revenue is recognized using work-in-progress accounts.

Cleanup & Catch-Up: Found and corrected discrepancies between old and new bookkeeping systems after converting from QuickBooks Desktop to QuickBooks Online.

Labor Allocation to Projects: Implemented a system to track technician time at the project level and match labor costs to revenue recognition.

Profitability Reporting: Leveraged QuickBooks Online’s project-level reporting plus custom dashboards to show profitability by project for any time period.

Results

Their profit and loss statement and balance sheets are now clean, accurate, and easy to read. With PlotPath, they also gain access to interactive dashboards that make key metrics instantly visible.

• See which projects and lines of business are most and least profitable
• Monitor operating expenses at the functional account level
• Compare revenue, COGS, and profit margins across projects and clients
• Answer key forecasting questions related to cash flow and scaling
• Update pricing and operational decisions using real profitability data