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Reports that tell the story

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Today, Jim Wells, owner of Ledgerfix joins us to share his best practices for reporting for retailers. Jim has worked with retailers for over a decade to grow their businesses with QuickBooks and expert consulting services. Jim was recently featured in our Let’s Get Retail podcast focused on reporting.

Data is king

Reporting can be intimidating, especially for business owners who don’t specialize in accounting or numbers. However, relying on good data helps influence strategic and tactical decision-making, planning and can help identify issues. No retailer wants to be surprised by issues that impact business health.

Key reports and the story they tell

Jim recommends starting with the basics if you’re new to reporting. The three following reports give an overview of the business and a starting point to begin assessing your retail business. With regular reporting, you’ll begin to see trends emerge over time.

  • Balance sheet: Overview of your business’ financial status, such as assets, liabilities and equity
  • Profit and loss: Earnings, expenses and net profits in a given period of time
  • Cashflow statement: Summarizes cash inflows and outflows

For retailers, Jim thinks about reporting in different categories.

Inventory Sales
Keeps a good pulse of inventory for better planning, forecasting and purchasing. Gives insight into products that are selling, how quickly and from which channel (if multiple sales channels).
  • Cost of goods sold (COGS): costs associated with the product
  • Stock status: how much inventory is on-hand
  • Inventory turnover: how quickly complete cycle of inventory sold
  • Sales summary: an overview of sales in a given period of time
  • Product sales: how each product sold
  • Sell-through: how fast products are selling
Run reports monthly to start. Retailers with high volume sales may run reports more frequently.

Underutilized reports

Often a seemingly unimportant report can bubble up hidden and relevant information. Jim shared an example of how a rarely pulled report helped unravel a puzzle. When his client compared sales to profit margin, the numbers didn’t line up. Sales were healthy, but the profit margin seemed inexplicably low. The client asked Jim to help investigate and fix the suspected system error. When Jim checked the standard reports nothing seemed amiss. He decided to pull a Vendor Name report. As they reviewed it, the team noticed unrecognized vendor names. More investigation revealed someone was creating fake vendors accompanied by false invoices. The scheme was quickly addressed but could have been identified earlier with some accounting controls. QuickBooks experts like Jim can help retailers establish the right accounting checks and balances at the outset to help avoid similar issues.

Reporting helps you know your customers

Retailers may have different data locked up in disconnected silos. When marketing data lives in one system, inventory and accounting data in others, you leave room for errors and issues. To get the most out of your data, it’s important to integrate your tools so that they can talk to each other. Once your tech tools are connected, you can do more holistic reporting to create better customer analytics. Retailers can get even more advanced by studying where customers are originating, and which products are selling to certain groups of customers. Jim notes that Ledgerfix created their reporting platform, Automate, which is able to sync with over 150 types of databases, including QuickBooks and Mailchimp. The goal of data integration is to enable deeper understanding of customers to fine tune product or service offerings, optimize sales channels, and provide better service.

“These are questions asked repeatedly because they give us good indicators of how to improve our sales,” says Jim.

How to use reporting to set goals

Basic reporting can be done with almost any accounting system. For goal setting, start with Profit and Loss to give you a high-level view of the business including sales and expenses. Jim works with clients to develop more comprehensive reporting, and always starts by creating a “single source of truth.” He then helps clients to build metrics relevant to their specific business.

“We work with the business owner to set goals, then identify reports that can help monitor the progress,” says Jim.

If you want help setting up your tech stack and showing you how reporting can help grow your business, we have experts who can help. Get in touch with Jim or another QuickBooks Solution Provider today.  And check out our retail page for more blogs and podcasts focused on helping you grow your retail business.

All opinions and advice expressed here are personal and do not represent those of Intuit QuickBooks. We recommend you work with a professional to assess your specific business needs. Additional terms, conditions and fees apply with app integrations. 

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