People breaking down reporting inside QuickBooks.

A simple fix for 13-period reporting inside QuickBooks

I know most of you are rolling your eyes at the mere mention of 13 periods, getting ready to hard pass swipe left – but hang in there .…

I’ve been using QuickBooks® a LONG time and been kvetching about this almost as long.

In fact, a search on the subject might find me (and others) publicly lamenting the drudgery and excessive excel massaging that is period reporting with QuickBooks.

Which makes this article, first and foremost, rather embarrassing.

See, it turns out QuickBooks CAN do this!

In my defense, they didn’t seem to know it either.

So, I’m putting prior rants (and any resulting sheepishness), aside.

There is, in fact, a fix for 13 period reporting!

But first .…

Is this really a problem?

In short, yes!

If, at this point, you are vigorously nodding in agreement, feel free to skip ahead. For the rest, here’s a little something on Period Reporting: what it is, why it matters, and what’s been done about it so far.

So, to sum up:

We think about money in terms of months, quarters, and years.

While they think of money by pay-periods, weeks, and sometimes even days.

Period reporting is vital to hospitality and brick and mortar retail because it bridges that gap. It promotes a common language and gives the books some dimension.

But it can only do this effectively if it is:

  • immediately accessible
  • easily customizable
  • directly integrated with the data

How does this fix work?

Up to now, practitioners have tried to either contort or outsource the native QuickBooks calendar in order to accommodate two points of view – traditional (month/quarter based) and operational (period based).

But, that approach still requires us to regularly choose between those two competing priorities inside QuickBooks. For nearly every transaction. This ends up serving neither very well.

Instead, what we need is a way to shift *between* priorities, kind of like our ability to shift between cash and accrual reporting.

Same data, different perspective.

So, we are going to create an *alternate* calendar inside QuickBooks.

And we’re going to do it using QuickBooks features – mainly classes.

The set up

Grab your client notes, a calendar, and some yummy snacks, then:

Turn on or adjust class tracking. Make sure you choose to assign classes by row, not just by transaction. Also, save your nerves – turn the ‘warning’ for no class assignment OFF.

Clear your class list. “Locations” may serve as a good alternative for existing classes, and exceptions may exist, but by and large we need a clean slate here.

Create a class for every period. One set of 13, not 13 for each year. Name them what you like, just be sure numerical order lines up with alphabetical order: P01, P02 and so on.

Create a ‘bridge’ class. This will be used to house items relating to a prior or future calendar or operational year, as in Next/Last Year.

Map your operational calendar .…

Create a period date list. Essential for easy reference! And fun to get creative with…

The operational calendar

The 13 period calendar consists of 13, four-week periods. You could find one online, but since it’s for internal use only, why not have something with a custom fit?

Here are some ideas to consider when creating your 13 period calendar:

  • Pay-period end dates. Assuming your clients are paying at least every two weeks, *make sure* your 4 week periods begin and end with the pay-periods.
  • Operating days for your client. Remember, this calendar is your client’s view of time. So, if they’re closed Tuesday/Wednesday, why not make “weeks” end on Mondays?
  • Operating cycles for your client. Consider using a key date as an anchor, and then work out from there. This is particularly useful if clients are seasonal or have limited hours during part of the year.

Everything else being equal, it’s best for January to contain the bulk of Period 1. It allows you to utilize some native reporting options in QuickBooks.

The workflow

For many of you, bank-rules and memorized transactions are essential. So classifying transactions efficiently might seem impossible. It’s not.

  1. Keep your existing workflows. Keep consistent in terms of bank rules, automatic entry mapping etc. Just leave all the class designations blank. Except .…
  2. Class exceptions as you go. Some items need to be assigned to a period that’s different than their actual date suggests, ie: an auto-pay dated July that is for electricity used in May/June. Always keep the QuickBooks calendar date aligned with the transaction, but assign the class to the period in which the activity belongs. It’s essentially like a built-in accrual!
  3. Utilize the “Reclassify Transactions” feature. After your regular workflow, classify what remains. I filter by the date range for a particular period, with the “Class” filter set to “None.” Then it’s easy to select all boxes and still avoid messing up anything you’ve already classed to another period for a reason (see #2).

Now the fun stuff. The results.

The reporting

Now, let’s take a new look at the built-in reporting in QuickBooks:

  • Any standard report that uses classes is now a period report.
  • Any report able to run or filter “by class” can become a period report.
  • Any third party app able to report on QuickBooks classes is now able to produce period reporting.
  • When reports by class are run compared to prior year, you have period reporting year-over-year.

You see where this is going .…

Basically, classes in your QuickBooks ecosystem now indicate you are viewing things by period, or in an Operational Calendar View (OCV).

But here is the bonus: the opposite is also true.

If class is *not* considered in a report, then that report can represent the ‘regular’ or ‘tax’ calendar view. Exclusively.

The books have gone from two to three dimensional. Just like that.

What does this mean for your practice?

  • You are free to optimize for tax again. Because client needs for reporting are now located in the OCV, you can use the native calendar for tax without side-effects on operational reports. No split loyalties!
  • You can close the books with less worry. You can now close a month or year for investors and/or tax, but still incorporate missed items or fundamental corrections later for operations. Easily generate the most current and accurate operational data without sacrificing the integrity of closed months.
  • You can eliminate some journal entries. If you are doing some pre-paid, accrual, and/or amortization journal entries strictly for operational reporting, you can probably stop. Expenses can be accrued and/or spread over periods inside the transaction itself.

These are just three examples of how this approach can make internal workflows more effective. You’ll probably find more. I have!

The point? This fix will likely save you at least as much time as it costs.

I’m calling this The Friday Fix

And it’s not just about period based reporting. It facilitates a return to three dimensional, *working* books:

  • It allows financial professionals to keep books that prioritize client views of the money/time relationship.
  • It does so without sacrificing usefulness for compliance and investor reporting.
  • It helps practitioners streamline their own internal processes surrounding year end, error correction, closing periods, and associated reporting.

In short, it gives us permission to stop splitting the books and our loyalties between client needs, external compliance, and scalable processes.

It’s not just about internal workflows or aligned data

Better reporting encourages clients to take more ownership over the accuracy and timeliness of their books. Docs start to get in faster. And clients contribute more insights, helping to diagnose errors and find solutions.

Frankly, there is so much more in terms of best practices, customizations, upsides and opportunities possible with this approach that it would be ridiculous to even mention them all here.

Suffice it to say, the use of this kind of reporting inside QuickBooks is game-changing for those of us that serve the brick and mortar retail and hospitality niches. Not only does it give our clients better tools for running their business, it provides clearer pathways for collaboration and advisory.

The result is an approach that benefits both our clients and ourselves.

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