- Primarily, the Chart of Accounts needs to be set up properly
- You need to have all of your data (checks, deposits, purchases, transactions, etc.) entered to the date of the report that you are expecting to create
- The bank and credit registers needs to be reconciled to the bank and credit statements to ensure there are no duplicated or missing transactions
Short of this effort, your reports will mean absolutely nothing.
Yet without accurate reports, you are running your business without the data that you need to know what is going on in your business, with details right to the penny.
Building the reports is the mechanical part of the process. Analyzing and understanding the reports are the parts that you need to become familiar and comfortable.
Assuming that your Accounts are set up properly and that your data has been entered and balances, give it a shot and run a report. Consider viewing each report alternating in both Accrual and then Cash basis. Accrual for example will show your actual sales vs. expense, whether or not you have collected or paid out on them, whereas the cash basis report reflects more a representation of the cash in and out from the same format report, whether or not the sale was from this month or from six months ago. These two different views can vary wildly and each are important to understand both individually and collectively.
Important reports to view on a regular schedule (which could be as frequently as daily in some instances) would include:
- Accounts Receivable
- Accounts Payable
- Profit & Loss (sometimes also called Income Statement)
- Balance Sheet
Mechanically, once you find the Report Center in QuickBooks, there is a wealth of reporting options to include or exclude in the report. Selecting any report, you have the ability to "Customize Report" (or "Modify" in older QuickBooks versions). Simple modifications include:
- the date range of your chosen report
- Accrual or Cash (look at it one way and then switch and compare)
- by Column if the date range is a longer range of dates
- additional sub-columns and even filter in or out specific classes, names, transactions, etc.
- you can even compare this period over last year, etc.
Play around with the function and give us a call if you need help. A clean report should accurately reflect your billing or income as well as easy to understand expense categories. The format though has its start in the Chart of Accounts, so be sure that is set up right. The good thing is that with QuickBooks, the Chart of Accounts can be repaired midstream and it will correct all of your reports going back and moving forward.
Give yourself the data that you need to be successful in accurate, regular reporting.