Leveraging QuickBooks Financial Reports Capability

Columbus QuickBooks Bookkeeping Services help small business owners to manage their businesses in smarter ways with the right financial reports. From avoiding cash flow issues and accumulating debt to paying commissions to salespeople.

In many cases, we have found that small business owners do not leverage QuickBook’s financial reports capability to help them both understand and grow their business.

In part, this seems to be due to the owner’s limited understanding of the financial side of their business in general. This is as well as having a lack of appreciation for what QuickBooks can be made to do.

We offer “QuickBooks Services” as we believe this is understandable in that small business owners in Columbus usually get into their business in the first place not because they are skilled in finances and bookkeeping.

Rather, they are in business because they have a passion and deep understanding of their particular products or services.

A Typical HVAC Company as an Example

Over the years they developed a deep understanding of how HVAC systems work, how to fix them, and how to replace them. Bookkeeping and generating financial reports in QuickBooks is just seen as an overhead or a thing that they have to do.

It is not what they want to spend time on. Consequently, their bookkeeping is delegated to their partner. Or they try to do it themselves at the end of a long day installing HVAC systems.

Bookkeepers Doing the Minimum

It is also sad that a lot of bookkeepers will do the minimum. Only rarely do we see bookkeepers actually thinking about and getting involved in the decision-making associated with running the business.

QuickBooks Services – Financial Reports – Critical Process

The right kind of financial reports can be critical for determining a company’s financial health and making informed business decisions. Generating the right kind of financial data and interpreting that data correctly can make or break a small business.

A great bookkeeper providing QuickBooks Services will help the business owner to more deeply understand their own business and provide that data in an easy to absorb manner. Typically, we describe this as a “business indicator dashboard”.

QuickBooks Financial Reports Enable the Business Indicator Dashboard

We are yet to see a new client already operating with a well-thought-out “business indicator dashboard”. When they do have some kind of financial data, they usually glance at it but rarely interpret it in such a way as to know what changes they need to make to their business.

A good “business indicator dashboard” will highlight key business financial data points and allow the business owners to know what changes they need to make in their business.

Cash Flow – The Small Business Killer

Profitable small businesses came close to bankruptcy due to poor cash-flow management. Make use of QuickBooks Financial Reports and avoid this problem in your business.

The right QuickBooks financial reports will provide an accurate depiction of how much money a business has, where the money is coming from, and where the money needs to go.

Not utilizing and interpreting this data correctly often results in a panicked reaction to a dangerous cash-flow situation.  The number one killer of small businesses is poorly managed cash flow.

For example, we recently worked with a small business owner who, when receiving incoming cash payments from clients, would repeatedly spend that cash almost as quickly as it came in.

As they closed more deals and received new project deposits the cycle would repeat. This process accumulated larger and larger debt in the form of accounts payable. The amount that they owed to suppliers grew with each passing month.

As they closed more deals, they would get more cash which looks good to them, however, each new deal really meant that they owed more and more to suppliers. This is in addition to staff wages and TAXES.

It did not take long before it became increasingly difficult for them to execute on projects because the supplier would not supply further products without first getting paid. The small business owner then became frantic having to negotiate with each supplier in order to get product.

Over time they become less and less trusted by their suppliers as they paid them later and later.

This became a vicious cash flow cycle that made it harder and harder to get anything done.  The result was that they came very close to bankruptcy. The irony was that their business was very profitable, they were making more than enough money on each deal to pay suppliers, staff, and their TAXES. Even with a highly profitable business, once a business gets into a negative cash flow cycle it is very difficult to get out of.

Good to Great Bookkeepers, QuickBooks Services That Make a Difference

A great bookkeeper providing QuickBooks Services will project a business’s current financial cycle into the future and identify cash flow problems before they become critical. It is enormously easier to avoid a problem before it occurs rather than trying to fix it once you are in it. Small business owners will often see the cash in the bank as their number one business indicator, this is a mistake. They are literally blinded by the moolah in the bank. The accumulated pictures of George Washington will often mesmerize small business owners straight into the jaws of the cash flow trap.

Seeing cash flow problems before they occur is one of the secrets to successfully running a business. QuickBooks financial reports, used correctly, can be an awesome tool for that purpose.

Small business owners will run the standard QuickBooks profit and loss and balance sheet reports. However, they overlook many of the reports offered by QuickBooks that will better guide their business through their cash flow and highlight which areas of the business that need attention and or provide the best return on investment.

It is the job of a great bookkeeper to help the business owner to more deeply understand the financial side of their business.

In general, for a small business in Columbus, we recommend running a minimum of weekly financial reports such as Profit and Loss, Balance Sheet, Cash Flow Analysis, Accounts/Receivable, and Accounts/Payable Aging.

Accounts Payable Aging – QuickBooks Smart Services

QuickBooks financial reports can be easily accessed from the ‘Reports’ menu and can be saved as a pdf document for later viewing.  Reports can also be saved in QB as favorites and shown in a ‘favorites’ folder within the reports menu.

A great feature of QuickBooks is that reports can be scheduled to run.  Schedules include, how often, time of day, and can also notify by email four hours in advance of the reports being sent out.  They can also be sent directly to email, and even to multiple email addresses ensuring that everyone who needs the data always receives it in a timely fashion.  You can further customize automated financial reports by sending selected reports to selected individuals based on their responsibilities.

QuickBooks Financial Reports – Scalable Services

QuickBooks is great for very small one-man businesses; however, it is also very scalable. For example, in larger organizations, accounts receivable reports can specifically go to the accounts receivable department. For added security, a password can be set so that individuals receiving the reports can only open the report with the password.

QuickBooks Financial Reports – Salespeople Commissions

Example of the problems using the standard QuickBooks report to calculate sales commissions.

Another example of the advanced use of QuickBooks financial reports is in handling sales peoples’ commissions.

With a recent client, the sales reps were paid on net profit. Net profit is determined when the job is complete, the customer has paid in full, all job costs have been received by all suppliers and subcontractors, and after-sales tax, credit memos, charge-backs, and discounts are applied.

It is extremely important to make sure that a customized report only shows paid invoices and excludes sales tax, credit memos, etc. to obtain an accurate net profit.

QuickBooks has a standard ‘job profitability’ report that shows net profit on jobs that would appear to be the perfect report to use for determining net profit, right? No, this is not a good report to use.

This report does not show if an invoice is paid in full. Even with a custom filter to exclude invoices that haven’t been paid in full, the report still shows selected sales on the report.

For example, even though the customer hasn’t paid in full the sale shows on the report with the amount of their discount as a negative revenue amount further confusing the numbers. In addition, there are $30,000.00 in job costs that are also not being reflected. This report alone will not work for calculating sales commissions.

The next logical report to use would be a sales report in QuickBooks. This is yet another pitfall. Our client used the ‘Sales by Rep Detail’ report provided by QuickBooks. While this would appear to be the perfect report and method for calculating sales commissions it is not, and let me show you why.

Another example of where standard QuickBooks reports will miscalculate calculate sales commissions.

Customers are set up with a payment plan at the time of invoicing. Payment plans are generally 50% due at acceptance, 40% due when materials are shipped and 10% due upon job completion. For this reason it’s important to have a report that accurately reflects if a customer is paid in full before paying out sales commissions.

In this example we’re going to calculate sales commissions for the month of February.

A customer was invoiced on 1/26/21 in the amount of $80,00.00 with a discount of 7,000.00. The customer made a 50% payment at signing of $36,500.00.

They made a 40% payment at the end of February in the amount of $29,200.00. The “Sales by Rep Detail” report was ran for February sales and only captures the amount paid by the customer in February.

The report does not reflect that the customer still has a balance due of $7,300.00. This would result in the sales rep being paid commissions on a job that was not complete and not yet due. Should the customer not pay their final balance or negotiate it to a smaller amount the sales rep would be overpaid.

One of the reasons that the client pays commissions on net profit is that they would have customers pay their final balance short or not at all due to dissatisfaction with some portion of the job or subcontractor. This report would result in numerous over-payments to the sales reps if final payments were not received.

On the other hand, if the customer had paid in full, the report only reflects payments made in February, thereby understating the correct amount of the total sale. The sales commission would be under calculated.

Without our expertise in recognizing the inaccuracy of the reports and customizing a system for the client to accurately calculate sales commissions, they would have paid several thousand dollars more in sales commissions than were due.

The Solution – Paying Salespeople the Correct Commission and Making the Company More Profitable

In our example sales reps are paid monthly. 


  1. Create an Excel spreadsheet for each sales rep by month.
  2. Run a customized Sales by Rep Detail report to obtain accurate revenue total per job.
    • This will exclude discounts, credit memos and sales tax.
  3. Run a customized Job Profitability Summary report to obtain accurate net profit per job.
  4. Add the revenue and job costs to the appropriate sales rep commission spreadsheet for each job.
    • This will calculate net profit.
  5. Verify that the net profit is the same as the job profitability report.

The spreadsheet will then calculate the sales commission due the sales rep for that month.

Here is the solution Columbus QuickBooks Services implemented. Salespeople now get the correct commissions based on paid invoices, after discounts, minus job expenses.

Columbus QuickBooks Bookkeeping Services help small business owners to manage their businesses better and more astutely.

From avoiding cash flow issues and accumulating debt to paying commissions to salespeople.

Need help to get the finances of your business under control? Call QuickBooks Bookkeeping Services Columbus at (614) 205-5676 and ask for Linda.

Or complete our contact form on our Columbus Bookkeeping & Accounting Services homepage.