How to Optimize QuickBooks Reporting for Your Small Business

Eric Weynand, Founder

As your business grows, smart financial reporting can help you optimize cash flow, minimize tax burden and make smarter business decisions. You might be wondering what you need to track and how you can use that information to improve your business. If so, you’re not alone.

There are five key reports that you should track monthly (at a minimum) to keep financial tabs on your business, which we explained in our 5 Most Important Financial Reports post here

  • Profit & Loss – Report of all expenses and income
  • Balance Sheet – Snapshot of your business’ assets and liabilities (including physical and, intangible assets)
  • Cash Flow – Statement of the amount of cash generated or spent in a period
  • Accounts Receivable – Report of everyone who owes you money, how much, and how far past due they are
  • Accounts Payable – How much you owe and to whom

While these reports form the bedrock of financial reporting for your business, it can be tough to know how to configure and analyze them properly. In other words, how to make them really matter to your business. 

Most accounting software, including QuickBooks Online, offer these reports and much more. QuickBooks Online also includes powerful customization features to help you make your business reporting more efficient and useful.  

For tips and tricks to quickly make your financial reports more meaningful, read on.

Get More from Your QuickBooks Financial Reports: Advanced Customization Features

The Profit & Loss statement is your go-to document for a financial status check. Here are some ways you can leverage the settings in your Profit & Loss (P&L) report to gain relevant insights about your business. At the top of the P&L report, there is a configuration section that you can use to tweak each of the following:

Report Period

Use relative date filters to automatically update your report time frame each time you run it. 

For example, save a custom P&L with “This-year-to-last-month” period and run it after the books are closed each month to see the year-to-date business performance through the final closed period (i.e. the end of last month).

Compare Another Period

This feature lets you compare to a prior month or prior year. We’ve configured the screenshot below using QuickBooks Online’s “test drive company” to show both dollar ($) and percent (%) change versus both prior month and prior year. 

There isn’t a whole lot of prior month and year data for this example company. But it shows how you can quickly assess month-over-month and year-over-year performance in a single report. 

QuickBooks Online Profit & Loss (P&L) report compare to another period
Use “Compare another period” to see how the business did the past month/year/quarter versus the prior period.

Display Columns By

“Display Columns By” lets you analyze performance by timeframe, customer, vendor, employee, product/service, class or location. You can use “Month” to scan your recent performance and look for trends or expenses that may have gotten out of control. Or, utilize “Class” and/or “Location” tracking to compare the performance of different cities, regions, or lines of business. This can help you identify the less profitable areas/customers/regions/products of your business so you can take corrective action. 

QuickBooks Online Profit & Loss (P&L) report Display columns by Months
Run your Profit and Loss report with “Display columns by” = “Months” to help you analyze trends and spot unexpected variations.
QuickBooks Online Profit & Loss (P&L) report Display columns by Customers
Use “Display columns by” = “Customers” on your Profit and Loss report to see profitability of each customer or project.

Percentage (%) of Income

Use this to see your margin percentage (the portion of your revenue which you actually get to keep to pay for your overhead costs). This is an incredibly important metric for growing companies; it’s a shame many business owners aren’t aware it’s buried deep in the report customization. 

Under “Compare another period” tick the “% of Income” box to show each line of your P&L as a percentage of income. Your gross profit as a percentage of income is your margin percentage. This metric will tell you whether your revenue is covering your direct (variable) costs, and how much is left to cover overhead (indirect or fixed costs). 

QuickBooks Online Profit & Loss (P&L) report percent (%) of Income to show Margin percent (%) (Gross profit percent (%))
Use “% of income” buried under “Compare another period” to show margin percent on your Profit and Loss report.

Full Customization Options

Many of these same customization techniques can be used also on the Balance Sheet and Cash Flow statements, as well as certain sales and operational reports. Not all customization features are available on all reports – to see the full breadth of options, click the grey “Customize” button in the top right of any report and expand each section by clicking on the drop-down arrow. 

QuickBooks Online reports full customization options
Click the grey “Customize” button in the top right of any report to see the full breadth of customization options.

Get Insights, Grow Your Business

Key performance indicators (KPI) dashboard by PlotPath
This visual dashboard gives our clients an easy-to-understand snapshot of important business metrics.

We love QuickBooks for its power and flexibility – we’re accounting nerds, after all! If you want better financial insights for your business without all the work, we can help.  

Our team at PlotPath will configure your reports so that you easily see the things that are most important to your business. Know what your profit margins are, keep tabs on your operating costs, breakdown revenue by customer, and more. 

Each month, PlotPath clients receive a comprehensive management report with multiple views of these 5 reports. Check out an example of our financial reporting package here

If you’re not a spreadsheet person, don’t worry. When you work with us, you’ll also have access to a dashboard (pictured above) that provides a visual representation of all your reports, driven straight from your QuickBooks data. See here for an example of the dashboard report.

Let us help you customize your reports for maximum insight and growth.