512 Solar - PlotPath

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 (which is 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 a critical factor 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 can guide the business towards 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Outdated accounting practices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 their 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 was able to transform 512 Solar’s financial reporting and analysis, making them more accurate, efficient, and insight-rich:

REVENUE RECOGNITION: Designed and implemented a process to make invoicing simpler and recognize revenue when installations were performed (not when invoiced or cash collected), using accrual-based customer prepayments and revenue recognition accounting.

COST OF GOODS SOLD (COGS) MATCHING VIA WORK IN PROGRESS (WIP): Created a process to record COGS at the project level, on the same date that revenue is recognized. The process was easy to execute using WIP accounts and items in the company’s accounting software.

CLEANUP AND CATCH-UP Found and corrected discrepancies in key financial reports between the old and new bookkeeping system (had converted from QuickBooks Desktop to QuickBooks Online)

LABOR ALLOCATION TO PROJECTS: Set up a system to track time for install technicians at the project level, assign that labor cost to projects, and then recognize it on the same date that revenue is recognized

PROFITABILITY REPORTING: Leveraged QuickBooks Online’s project-level reporting feature, plus our custom dashboard tool to show profitability by any project in any period.

Results

Their profit and loss statement and balance sheets are now clean, accurate, and easy-to-read. And with PlotPath, you gain access to interactive dashboards that let you see all your key metrics at a moment’s glance.

See which projects and lines of business are most (and least) profitable for any time period
Monitor changes in operating expenses at the functional account level
Compare revenue, COGS, and profit margins across projects, clients, and lines of business
Answer key forecasting questions related to cash flow and scaling their business
Update pricing and other operational decisions using feedback from profitability reporting

512 Solar Gains Key Profitability Insights with PlotPath