Custom reports in QuickBooks

Custom reports for QuickBooks: How to eliminate manual practices

The media (and the economists) have been predicting a recession for over a year. It’s still not here, but the threat looms. Whether a recession tends to affect businesses negatively or positively, it’s always smart to be prepared. Let’s talk about ways to make a business more resilient.

To be resilient is to have the capacity to withstand or recover quickly from difficulties, and the ability to spring back into shape. It implies flexibility. If a business owner feels the desire to conserve cash, the most common reaction to news of a recession is to lay off staff. It’s a natural reaction—but may not leave the business more resilient.

Perhaps it’s about helping clients to be more effective with limited resources, to do more with less.

Custom reports = automation

IBM devotes an entire page to defining different types of automation. The word automation suggests fancy high-tech systems, but when it comes to IT, it basically means creating systems to replace repeatable processes and reduce manual intervention. A custom report is the very definition of automation!

I think it is now relevant to define “custom report.” Rather than modifying the reports available in QuickBooks, a custom reporting specialist uses a variety of external tools to access the data “under the hood” and lay it out in ways QuickBooks alone just can’t. Users can see the information they need at any time, without needing to open QuickBooks. Here are two examples:

  • A Profit & Loss statement that consolidates transactions from multiple companies and has columns for Month, Quarter to Date, Year to Date, as well as Budget and Forecast numbers.

Obviously, the data exists in QuickBooks, but there is no way to see it all together.

  • A Commission Report that calculates commissions based on some unique combination item, customer, and quota tiers.

As you can imagine, there are a zillion permutations for how to calculate a commission, and every business does it differently. That is why there is no commission report in QuickBooks, or any other accounting or ERP system in the world.

Colossal Waste: Is this going on with your clients?

Recently I met with a $50M company to discuss automating their Commission Report. It took two hour-long calls with six company representatives to review every step in the current commission report process. The senior managers were shocked to discover it takes at least three people more than a day to produce a commission report for just nine sales reps every month. That’s insane! But it is unbelievably common in smaller businesses. These situations desperately call for a custom report.

To be clear, I’m not advocating for custom reports to justify laying off employees. But I am advocating for being aware of the invisible manual processes happening because no one thought to find a better way. Many of these Excel-based processes are simply inherited and they’ve been around for years. Or perhaps it is you, the bookkeeper or accountant/advisor, who is doing these manual processes on behalf of your clients. 

As an aside, don’t let a slick ERP salesperson convince your clients that they need to leave a system like QuickBooks so they can get better reports. Not true. There is simply no escaping the need for custom reports by upgrading to a more sophisticated system. They just cost a lot more and take longer to build.

Imagining the possibilities

Here are the million-dollar questions: What else could those three loyal employees be doing to add more value to the company if they didn’t have to format spreadsheets? And what difference would make to the bottom line if the manual errors were eliminated?

Good reports, whether they are custom or simply available within the software, can help accomplish a number of things: 

  • Monitor cash flow
  • Identify areas for improvement or new trends
  • Track key performance indicators
  • Provide confidence in making good decisions

Practical steps to get prepared

So what can you do to help clients stretch their business dollars and be more resilient?

#1: Ferret out manual practices that relate to the accounting system.

  • Dig deep.You’ll be surprised how many you find. And then evaluate: Is this task still needed? Can it be automated? Employees hate doing that kind of work anywaythey just didn’t bother to tell anyone or to ask if there’s a better way.

#2: Work with the business owner to state the top business objective, and then pick 1-2 meaningful things to measure, and start measuring regularly.

  • Fall in love with the dataand find ways for the owner to do the same!
  • Make sure there’s a report for each objective/measure that can be run at any time with a single click to see how it’s going. Keep it simple but make sure it’s automated!

#3: Get rid of QuickBooks user licensesbut give the users more data.

  • Your clients may be spending a lot on licenses just to let people see the data (not entering it). Do an inventory of the licensesand the way each user is using the software.
  • Make the right data available to the right people (through reports or other integrated tools) and make it self-serve.

#4: Encourage your clients to try ALL the reports in their version of QuickBooks! Every.Single.One.

  • Have them study the reports, make a list of questions, and find out if there is something they want to know, but can’t get the answer from the existing reports.

#5: Teach everyone how to read the financial reports as it concerns their role.

  • Then ask them to get creative with how they could impact the numbers!

A new system won’t help

Your clients don’t need a new system. What they need is more insight into the patterns of their business through existing data. I built several cash flow-style reports so clients can visualize money flowing in and out over the next few months, because those reports don’t exist in the lower-tier versions of QuickBooks. Sometimes waiting just one week to pay a supplier can make all the difference in getting out of a tight cash situation. And the data is already there, ready to be exploited for the longevity of the business.

Whether a recession is on the horizon, like any good Boy or Girl Scout, it just makes sense to be prepared. By taking the time to find and eliminate manual practices, getting crystal clear on business objectives, and making better use of existing data through custom reports, business owners can feel more confident about weathering the inevitable stormsand you can help guide them through.

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