Can QuickBooks help me beyond the profit and loss statement?
Posted on July 31, 2014 by Paul Edwards, One of Thousands of Entrepreneurship Coaches on Noomii.
QuickBooks can be more than a profit and loss statement. It can direct your spending pattern and your borrowing pattern. Maximize your decision!
It is easy to enter your cost and enter your sales income, but what reports allow you to make your spending decision and your borrowing decisions? In every business that uses QuickBooks, we create the reports that your accountant will use for end of year reporting and the reports your banker will look at for the borrowing approvals. You also have reports available to you that help in your week to week operations. If you offer terms such as 30 day net, you will need to know your aging report. Your aging report will help you determine present and future cash flow. The other report significant to you is the open purchase orders. The open purchase orders is inventory you have in stock but are not paid in full to the supplier. Finally, a current inventory report will allow you to understand the stability for future business.
The strength of your business is established by these three reports. The aging report establishes what revenue soon to be added to your existing cash flow. If you have $30,000.00 in your company checkbook and you have $60,000.00 in receivables, you could be fine short term. Open purchase order report demonstrates the existing balance of debt to suppliers. The net difference of these two reports allows a net understanding of revenues important to over head. Your inventory report is important to customer orders and meeting their 30 day short term financing needs. Take the inventory and create a general realized understanding of the inventory free and clear of obligation (supplier not paid in full) and the inventory that is free and clear on any debt. When you reach the point that all inventory needed to meet your clients 30 day needs is debt free, you are now self-funding your customers needs. This is a position of strength you want your company to be in. Do not borrow until your company achieves this point of operation. My coaching can help in your effort to realize this point in your business!
