Do you spend a lot of time reviewing stacks of reports each month so you can get the information you need to make decisions? Do you find out after the fact that something went wrong in your business and that if you had known about it sooner, you would have made different decisions?
If so, you might benefit from a special type of reporting called exception reporting. Exception reporting highlights red flag areas that you need to take action on. It contrasts with regular reporting, which lists lots of data that you may or may not need to take action on.
Examples of Exception Reporting
Bank Balances: How often do you check your bank balance? You probably check daily or even more, right? Do you really need to? Ask yourself when do you really need to know about your bank balance? You need to know when it falls below a certain amount, or when you don’t have enough to cover imminent bills, right? Why not stop checking your balance all the time and replace it with an alert that will send you an email under the conditions and criteria you set? This will save you time.
QuickBooks Exception reports: Some of the QuickBooks reports can be used as exception reporting for you. Two examples are the Collections report, which shows past due invoices and the inventory re-order report, which lists inventory items that reached their re-order points and need to be re-ordered
More Ideas for Exception Reporting
Want more ideas for exception reports? Maybe these will stimulate ideas for your business:
Missed and upcoming deadline tracking such as
Project due dates – if this is for a customer, you can run a job status due report;
For company due dates, such as project or tax forms due, you can set up reminders in QuickBooks using the To Do List (Company>To Do)
Bills overdue – You can customize the Unpaid Bills so that it shows only your past due Bills or run the A/P Aging Detail report which sorts first by aging and then alphanumerically
Expiration date tracking like insurance expiration dates , you can create a report listing your subcontractors and sort by expiration date
Large variances in budget to actual reports – If you job cost and have your estimates in QuickBooks, you can easily run an estimated vs actual and cost to complete
For other reports, you might find that you can customize a QuickBooks report to show the exceptions (and then memorize). We discuss how to customize reports in QuickBooks in this article.
Steps for Exception Reporting
To take advantage of exception reporting, here are a few steps:
Check out some of the features in QuickBooks, like Reminders, the To-Do List and the Company Snapshot (one of my favorite management features). The Snapshot will show past due in red, account balances, trends, – quickly and all in one place.
Identify the reports you currently receive that you review but take no action no matter what. Do you really need them? If not, throw them out. If so, ask yourself what trigger would have you taking action and change the regular report into an exception report that reports on that trigger.
Think about what data you access all day that is not in a report or easy-to-use format. Can you create an exception report or alert out of it and save yourself time?
What information would you like to start receiving that you don’t have now? It should be something that you would take action on if you knew about it. Can you create an exception report for these new information needs?
I have found there are countless reports you can extract from QuickBooks with some customizing. Your version of QuickBooks will affect what reports are ready-made, easy to customize. If you still can’t accomplish what you want, there are 3rd party reporting programs that can assist and you can reach out to our office at firstname.lastname@example.org.
Try exception reporting, or take it to the next level of implementation in your business, and watch your time free up and your management decisions sharpen. I’d love to hear what exception reports you would find helpful. You can post in our comments section below.