Updated: Sep 29
Do you know where to start when looking for ways to reach your revenue goals for 2023?
With the new year well underway, now is a great time to assess where your finances are and where you'd like them to be this year. To gain greater clarity about where your business is headed in 2023, there are a few key questions you should ask yourself--and your accounting team. Doing so can help you achieve important goals more efficiently, like:
Tracking the sales goals you set for the year
Leveraging estimate tools from QuickBooks to close new work
Staying on top of inventory more proactively
We'll review each of the three questions you should consider, along with how QuickBooks Desktop can help you find their answers and improve your chances of success in reaching your goals.
1. Have you tried using the Sales Tools offered by QuickBooks?
Do you create sales goals for your company? Unfortunately, many business owners don't. We understand that you might spend so much time just running your operation that setting objectives for the coming months feels overwhelming. Even if you do have the bandwidth to set these goals, you may feel you don't have sufficient information to make an educated guess about future sales.
This is where QuickBooks can help. The sales report feature lets you predict what's ahead by highlighting past trends. By reviewing past sales by different filters, you can determine which customers, items, and even sales representatives are most profitable for your business.
Start by identifying your best customers, since they may be some of your best prospects for new (or increased) business in 2023. You'll find this information by going to the Company Snapshot. Click Snapshots in the toolbar and ensure the Company tab is highlighted. Next, find the Top Customers by Sales chart and set the date range for a past period. Finally, click the Customer tab to find more information about historical sales.
Your best customers may be the ones you already have. QuickBooks can help you identify them.
You can find your other sales reports in the Report Center. To do so, navigate to Reports | Report Center and click on Sales. Customizable reports here include Sales by Customer, Sales by Item, and Sales by Rep. There's even a Pending Sales report, which would signal that some follow-up might be needed.
Should You Be Creating Estimates?
This question will depend on the type of work your company does. For example, if you do lawn work or computer repair, providing prospects with an estimate can help them determine whether they want to go ahead with the product or service. It can also be a starting point for negotiations.
If you've created invoices in QuickBooks before, estimates will be easy. Open the Customers menu and click Create Estimates. Select a Customer:Job, verify the Date and Estimate #, and give it a Due Date, so the customer knows when the estimate expires. Next, enter the products and/or services and their proposed quantities and prices, then save and send or print the estimate.
TIP: Would you rather have the Due Date field read something like Expires? We can show you how to modify labels on forms.
How Much Inventory Do You Have?
This information is critical whether you sell one-of-a-kind items or dozens of the same product. When you create an item record in QuickBooks to use in invoices, estimates, etc., you should be using the software's inventory-tracking tools, so you always know when you're running low (or out).
You’ll always know how many items you have in stock when you complete these fields in item records.
Open the Lists menu and select Item List. Open the Item menu in the lower left and click New. Select Inventory Part under Type. In the window that opens, fill out the top part of the form with information about the product. At the bottom of the screen is a section labeled Inventory Information, as pictured above. Complete the following fields:
Asset Account: This should be set to the default, Inventory Asset.
Reorder Point (Min) and (Max): QuickBooks reduces the number of items in stock every time a sale is made. At what point(s) do you want to be warned that you're running low?
On Hand: Unless you're setting up inventory for the very first time, be careful here; you could be adding an asset to your balance sheet. Contact us for more info.
Total Value: QuickBooks calculates this field.
As of: Make sure the current date is the one you want.
If you let yourself run out of a particular item, or if you try to sell more than you have on hand, you'll get a warning when you try to create an invoice or sales receipt for the product that says, "You don't have sufficient quantity on hand to sell item." To learn more about preventing negative inventory and its potential negative impacts on your accounting, contact us.
Make It A Good Year
You can certainly use other QuickBooks tools to improve your financial outlook, and we'll be exploring these throughout the year. In the meantime, let us know how we can help you broaden and improve your use of QuickBooks. We can expand on what we covered in this column and introduce you to features you need but may not know about.