What Are You Costing The Business?

Have you maximized your investment in QuickBooks?  There is so much this software can do to help you run your business better that goes unused.  For many, it’s not knowing that QuickBooks has that capability or some may not think it important to track certain data and others simply don’t know how due to lack of training.  QuickBooks can help you analyze your current situation and help you strategize for moving forward.

Have you stopped to ask just what this could be costing the business?  Probably not or, as is often the case, the cost is underestimated.  Here are some questions you can ask and the answers can be found in QuickBooks with the right setup and utilization:

  • Are you even in the version of QuickBooks that works best for your situation?  I find many are not.
  • Have you really taken a close look at who your most profitable customers are? While the top 1 or 2 you often know, you might be surprised at who else is in your top 20%.
  • Just because the total sales or income is high, doesn’t mean your profit is high.  What were your costs for that customer – direct costs (like materials purchased or manpower) or indirect like overhead or your time?  Sometimes, the costs are so high that your top revenue-producing client may not actually be one of your more profitable.  There are several different ways to track costs (which is another issue unto itself), but I find these costs are often underestimated.  Some just look at direct costs, some don’t track all the time or costs – you could be losing money – ouch!
  • Are you tracking your indirect costs?  I’ve started being much more specific so I can track better – it’s been a real eye-opener.
  • Have you looked at what type of customer is your ideal?  It might be by industry, size, location, or particular need.  I find this feature often goes unused. It can also change as your business continues to evolve, technology changes and the economy changes.
  • And what about your products and services?  Have you taken the time to look at which ones are most profitable?  I was shocked when I added both my overhead and my time to a couple areas in my business –  I will definitely be re-evaluating!
  • Have you taken a look at the different marketing channels you are using to see which ones have the highest Return on Investment (ROI)?  Time spent on these areas are often ignored. Did you know that there are ways to track this information in QuickBooks?
  • Do you know which customers come from which marketing channel?  Again, it can help you determine ROI and you can track it in QuickBooks.
  • Are some of your procedures taking longer than needed?  I find that there are many ways you can streamline in QuickBooks that could save time and many have never analyzed the cost to do it the “slow” way.  Time is frequently an under-valued component – especially if it’s a family member or salaried employee.  What other project or task could you (or the person in QuickBooks) do with that extra time?  Perhaps marketing the business or developing a service. If it’s a family member, perhaps they could spend more time with family and have less stress.  If you pay an employee or independent contractor you have a direct cost for this procedure.
  • Are you doing double-entry?  I find sometimes a transaction is being handled in one place and then it needs to be entered in QuickBooks.  Double-entry takes time and often has mistakes.  Is there a way this process could be streamlined?
  • Sometimes there are ways to automate procedures – you save time because the automation takes care of it for you and prevents mistakes which cost both time and money.
  • There are a myriad of ways some procedures can be streamlined and sometimes it means buying a product or service to integrate with QuickBooks, but the result could be a big savings.
  • I find many users don’t know all the reports that could help them in QuickBooks or, don’t know how to customize the report to show them the data they want in a more meaningful way. The reports can help you make better decisions and even help you determine the direction for your company.

If you would like help evaluating how you can use QuickBooks better to help your business, email us at info@muirassoc.com.  We have a tool we use to help analyze setup and then we can advise from there.

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