In our last article, we discussed the benefits of specializing versus generalizing. So let’s take a look at how QuickBooks can help you.
Decide what you want to track. Obviously you want to look at profitability but here are some ways you could look at where you are most profitable:
- Geographically – region of the country, state, county, city, subdivision…
- By division/department – new construction, remodeling, landscape projects, irrigation, painting…
- By crew, foreman, sales rep
- Type of Project/Job – kitchen remodel, retaining wall, new home…
- Service/Product – mowing, painting, framing, designing…
- Type of customer – general contractor, homeowner, developer, landlord, government agency…
When you can narrow down within each of the above, you’ll have a better picture of the type of business you want.
Use Your QuickBooks tools
- Classes – Classes can really help you easily compare different aspects of your business. Many use divisions or departments as classes, but some use states or type of project (e.g. new construction vs remodel), project manager, partner or a combination. If you have not been using this feature, you will love it – you can easily compare profitability with side by side comparisons. You can also use sub-classes, although the reporting is a little more cumbersome.
- Customer Type – This under-utilized tool is found in the Additional Info section of your “edit customer”. How do you describe your customers? Retirees, singles, young families with pets, government agencies, non-profits, service businesses? Work up your list – you can even do sub –types. So for me, I have contractor as a type, but my sub-types are the different kinds of contractors. You can even have a type for the customer and a different type for a job for the customer. Below is a custom report comparing profitability of Customer Types.
- Job Type – You will find over time that certain types of jobs are better for your business than others, so use job type to help you refine.
Items: – These are your products and services. Most of you have several (maybe many), but if you have them setup as double-sided Items and enter your costs using the Items tab, then the Item Profitability report may be eye-opening.
- Custom Fields – I love Custom Fields! In fact, mine are all used up! You can use Custom Fields to track demographics, source of lead, and information about the property or the different services they use. Wouldn’t it be nice to really identify who your ideal type of customer is?! Not just their name and location, but something about their age, family status, pets, size of yard, type of yard, whether this is a historic property or size of the business. What I also like about Custom Fields is you can pull them into invoices, filter on them, and use them reports – that’s sooo much better than using the “other” field (which you can’t pull into a report or filter on) or having some of this info in the notes or descriptions.
- Templates – Once you have your lists and fields setup, next is to use them! There will be a Class field on all your transactions, so you simply click, from the drop-down. If you want to track sales by sales rep or crew or foreman or source of lead, you will need to have sales rep on the invoice, too. That’s true for custom fields as well. The screen shot to the right shows how to add these to your invoice templates. Keep in mind they don’t have to print out on the customer’s copy, but will provide valuable information for you.
- Reports – Once you started to collect the data, the next step is to look at your reports. You’ve already seen a few in this article that you can create to review. Seeing the numbers or seeing it in a chart of graph form will help you evaluate your business so you can refine it. You will get some interesting aha’s” when you review these reports with new information.
Contact our office if you have questions or would like assistance.