Business Overview Reports

In Chapter 10, Report Center Overview, we explained how to navigate the Report Center, what reports are available based on your QuickBooks Online (QBO) subscription level, how to customize reports to meet your business needs, and how to export reports using Excel, PDFs, and Email. In this chapter, we will discuss the three primary reports that provide a good overview of your business: profit and loss statements, balance sheet reports, and statements of cash flows. We will explain what information is included in each report, how to customize it, and how to generate the report. In addition, we will learn how to create a budget from scratch so that you can keep track of your income and expenses in relation to the set budget for the year. This information will go a long way in helping you make decisions about your business. Finally, we will introduce you to the cash flow planner and the audit log report.

By the end of this chapter, you will have a better...

Understanding profit and loss statements

In this section, we will show you how to customize and generate a profit and loss statement. The profit and loss statement, also referred to as the income statement, or statement of activities in the non-profit sector, shows you how profitable a business is for a period of time. This report summarizes all the income and expenses that have been incurred by a business for a specific period of time. The difference between income and expenses is shown on the report as either net profit (income exceeds expenses) or net loss (expenses exceed income). Like most reports, you can customize the profit and loss statement to meet your business needs.

Pro Tip: Before preparing any reports it is important to confirm that your books are reconciled for the reporting period.

Follow these steps to generate and customize a profit and loss statement:

1. Navigate to Reports in the left menu bar, as shown in Figure 11.2:

...

Generating balance sheet reports

A balance sheet report summarizes the assets, liabilities, and owner’s equity for a business at any point in time. This report allows you to assess the liquidity (access to cash or assets that can be quickly turned into cash) of a business, which is important to potential investors and creditors. As with most reports, you can customize the balance sheet report to meet your business needs. We will show you how to generate the report and customize it in this section.

Follow these steps to generate and customize a balance sheet report:

1. Navigate to Reports in the left menu bar, as shown in Figure 11.6:

Figure 11.6: Navigating to the Report Center from the left menu bar

2. Scroll down to the business overview section and select Balance Sheet, as shown in Figure 11.7:

Figure 11.7: Choosing the balance sheet report

3. As you can see, there are several different types of balance sheet reports...

Understanding the statement of cash flows

The statement of cash flows is a detail report that shows the cash coming in and going out of your business over a period of time. It groups cash flow into three categories: operating, investing, and financing activities. Operating activities include items that are part of the day-to-day business operations, such as cash due from customers (accounts receivable) or money due to vendors (accounts payable). Investing activities include the purchase of assets for the business, such as a computer. Financing activities include money coming in from a business loan or line of credit.

Similar to the profit and loss and balance sheet reports, you can customize the statement of cash flows to meet your business needs. We will show you how to generate the report and customize it in this section.

Follow these steps to customize and generate a statement of cash flows report:

1. Navigate to Reports in the left menu bar, as shown in Figure...

Creating a budget

After you’ve been in business for a year or two, you may want to take advantage of tools that will help you strategize and plan for the future. You can create a budget in QuickBooks Online from scratch or use existing data from the previous year. When you create a budget, you can keep track of your actual income and expenses to see whether you are coming in over or under budget.

QuickBooks allows you to create budgets for all income and expense accounts. You can also create a budget for specific customers. We will show you how to create a budget from scratch in this section. To access the budgeting feature, you must be subscribed to QBO Plus or QBO Advanced.

Follow these steps to create a budget:

1. Click on the gear icon and select Budgeting, as shown in the following screenshot:

Figure 11.14: Navigating to Budgeting from the TOOLS menu

2. The following screen will appear:

Figure 11.15: The Add budget button...

Using the cash flow planner

One of the challenges many small businesses face is staying on top of their cash flow. Within QuickBooks Online, you can access the new cash flow planner. This planner will allow you to create real or hypothetical scenarios without affecting your QuickBooks data.

To access the cash flow planner, click on Cash flow located on the left menu bar, as shown in the following screenshot:

Figure 11.20: Navigating to the Cash Flow Center

The Cash Flow Center will appear as shown below:

Figure 11.21: Cash Flow Center window

Here is a brief explanation of how this tool works:

• There are three tabs (1): Overview (shown in the preceding screenshot), QuickBooks Checking, and Planner. On the Overview tab, you will have a cash flow graph that shows all 12 months of your fiscal year. You can also link accounts and get or send money, which we will discuss below. The QuickBooks Checking tab allows you to apply for a checking account...

Generating the audit log report

The audit log report shows you everything that has happened in your company file so you can keep track of who has been in QuickBooks and what they have been doing. It shows you the date a change was made, the user who made the change, what the change (event) was, and the history if there is more than one change that was made.

Follow the steps below to generate the audit log report:

1. Navigate to Reports in the left menu bar, as shown in Figure 11.25:

Figure 11.25: Navigating to the Report Center from the left navigation bar

2. Scroll down to the Business overview section and select Audit Log, as shown in Figure 11.26:

Figure 11.26: Clicking on Audit Log in the Business overview group

3. The audit log report will appear:

Figure 11.27: Sample audit log report

4. At the top of the report, there are three fields you can use to filter the report by User, Date changed, and Events...

Summary

As discussed in Chapter 10, Report Center Overview, once you have customized the reports you plan to use on a regular basis, it is a good idea to memorize them and/or create a group of memorized reports that will appear in your Custom reports tab. In this chapter, we explained the information you can find on the three primary financial reports: profit and loss statements, balance sheet reports, and statements of cash flows.

We also showed you how to customize the reports and generate them. In addition, we showed you how to create a budget from scratch and run budget reports. Finally, we touched on what you can do with the QuickBooks cash flow planner, and showed you how to generate the audit log report to view the history of changes to your company file.

In the next chapter, we will show you what reports are available in QBO to help you stay on top of customers and sales.

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