Can QuickBooks Online Make You More Profitable?

Yes, it can – as long as you take advantage of some of its more effective tools.

We like QuickBooks Online for a lot of reasons. It’s designed for small business owners, not accountants, so its language and processes are understandable. It offers all the tools you need to manage your income and expenses. It provides tools for tracking inventory, creating projects, and running payroll. It generates reports. And it’s highly customizable, so no matter what kind of business you own, you can make it work for you.

QuickBooks Online’s bookkeeping capabilities can ensure that you get the numbers right, but its benefits go beyond that. Many of its tools can actually help you make changes to improve your company’s profitability if you make a commitment to use them regularly. Try incorporating these five features into your regular workflow for three months and see how they can:

Improve Customer Relationships

Your customers are gold. Unless you have hundreds of them, it’s well worth your time to cultivate good, long-lasting relationships with them. If you haven’t seen their name on an invoice for a while, send them a friendly, personalized email offering a one-time discount. Or tell them about new products and/or services that they might like. And don’t neglect your best customers. Let them know occasionally that you appreciate their business by sending them a freebie.

QuickBooks Online provides exceptionally detailed customer records that can give you quick insight into your customers’ history, their current status, and future opportunities. Beyond basic contact information, customer records offer comprehensive transaction lists and activity feeds that document your interaction with them. You can take notes and assign tasks, browse projects you’ve done for them, and see their current open balance and any missing payments. Connect Gmail or Outlook to QuickBooks Online, and you’ll be able to store conversations with them right in their records. You’ll find customer records by clicking the Home button in the toolbar, then Customer Hub, then Customers & Leads.

Maintain your customer records diligently, and QuickBooks Online can serve as a customer relationship manager (CRM). The Sales by Customer report can be a big help here

Help Maintain Smart Inventory Levels

If you sell products, you know what a balancing act inventory management can be. Carry too much and you may be tying up more money than you need to. Cut your levels too close, and you risk not being able to fulfill some orders – and maybe even losing customers.

QuickBooks Online can help you track your inventory so you can minimize those problems. You’ll know instantly when you go to the inventory home page which stock levels are low, what your best sellers are, and whether there are any open sales orders or purchase orders. Inventory records provide details about each item. They also tell you what the quantity on hand is and whether any are on purchase order or sales order, as well as the reorder point you set. Reports that are helpful here include Inventory Valuation Summary/Detail and Sales by Product/Service Summary and Detail.

To see inventory pages in QuickBooks Online, click All apps in the toolbar, then Inventory.

Accelerate Customer Payments

This is probably the most formidable problem that small businesses face. How do you get your customers to pay on time? You can, for example:

• Charge late fees.
• Decrease the number of days until the due date.
• Offer a small discount for early payment.

Probably the best way to encourage timely remittances is to allow customers to pay electronically. You’ll need to set up a merchant account through QuickBooks Payments. Customers will be able to pay directly through an invoice, on site or in a store, or digitally (ACH and credit/debit cards, Apple Pay, PayPal, Venmo, etc.). Transaction fees will apply.

You can speed up payments by giving customers more convenient, faster options.

Improve Your Cash Flow

It all comes down to this, doesn’t it? How much is coming in vs how much is going out? Keeping a close watch on your cash flow is critical. Positive cash flow is not the same thing as profitability, but the two are, of course, closely related. QuickBooks Online provides ways for you to monitor this. Click the Home button in the toolbar and scroll down until you see the Cash Flow graph. This will give you a quick look at today’s and your historical cash flow. If this snapshot doesn’t mean anything to you (and it may not; it’s pretty simple), we can analyze your situation by running and analyzing QuickBooks Online’s report, Statement of Cash Flows.

Keep Track of Your Digital Paperwork

How do you keep track of what invoices have been paid? You can always run a report that you should be running regularly: Accounts Receivable Aging Summary. This will spell out who owes you money and who is late sending it in. Though you can customize this report, the default view will show you a list of customers’ (and related jobs’) names with six additional columns showing whether they’re up to date or a certain number of days (by range) late: Current, 1-30, 31-60, 61-90, 91 and over, and Total.

You can also see a visual of your outstanding customer payments. Click Home, then Sales & Get Paid, then Sales transactions. Colored bars at the top of this page show you how much money is tied up in Estimates, Unbilled income, Overdue invoices, Open invoices and credits, and Recently paid. Click on any bar to see a list of related transactions below.

Make It a Habit

QuickBooks Online can, in many small ways, help you   achieve profitability. But it takes diligence on your part. If you’re not already taking these five steps regularly, try to work them into your accounting workflow. Taken together, along with the other things you do to get profitable and stay profitable, you should see your smart use of QuickBooks Online pay off. Let us know where we can help.