Small business owners can utilize cloud accounting software like QuickBooks to track the progress of their company. Three instances of what can be tracked are as follows:
Sales growth: Cash flow projections can help you ensure that your cash and profit margins are in sync. To complete a cash flow projection, subtract the predicted cash outflows for the following term from the existing cash in the business.
Revenue growth rate: While this is a simple metric, it is useful for ensuring that the company is expanding. To calculate the revenue growth percentage, divide the current year’s revenue by the previous year’s revenue.
Inventory turnover is a measurement of how quickly inventory changes hands.
Tips: How possible annual growth tracking using QuickBooks
Make a comparison of the profit and loss statement
Here’s how to compare years in QuickBooks step by step:
The standard Profit and Loss Report can be found in QuickBooks by going to Reports and then clicking Standard Profit and Loss Report. Year-to-Date Comparison and By Month are two further Profit and Loss reports available. These can be used, but they’re just a regular report with different choices checked, and it’s generally easier to start from scratch. Choose this year or last year for the reporting period, depending on whether you want to include the current year or only up to the end of last year.
Set the date range to include the entire time period you wish. You can choose from a variety of years. Make sure the date range for yearly reports starts at the beginning of your fiscal year.
Change the Display columns in QuickBooks by an option to years if you’re comparing more than the reporting year and the preceding year.
Comparing two periods is a little more involved, so we’ll go over that in more depth below. Depending on your accounting procedures, choose either cash or accrual under the Accounting method in QuickBooks.
Another Period Option to Consider
For comparing a previous time, there are three options, each having two possibilities beneath it. They each provide you with a unique piece of knowledge.
The Previous Year
The previous year is compared to the same period the previous year. The comparison will be to 2017 if you select the entire calendar year 2018. When you divide your report by month or quarter rather than by year, you can compare it to the same time period the prior year. Consider the months of January 2019 and January 2018. This is the greatest tool for comparing seasonal patterns.
The previous period is compared to the one immediately before it. It works the same way as the Previous Year option if your report is organized by year. If your report is broken down by month or quarter, it compares to the previous period rather than the same period the previous year. Consider the comparison between January 2019 and December 2018.
The year-to-date report includes data from January 1st to today’s date. It then compares this year’s data to last year’s data using the same date range, regardless of whether you’re in March, May, November, or December.
Change in dollars vs. percent change
You’ll almost always want to see a growth rate and choose the percent change option. The $ change option is available if you want to see the exact dollar change.
This is used to demonstrate the speed with which inventory moves. Add up the cost of goods sold, which includes things like utilities and salaries, then divide by the total value of what’s left at the end of the year. Select Run report from the selection boxes to print, email, or export the report to Excel when you’re finished. Don’t forget to save your customizations so you can run the same report with a single click in the future.
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