We at Fourlane have learned a lot from our customers when it comes to the problems they run into with their QuickBooks files. With our services, we try to help the businesses we work with identify the true issues hiding beneath the surface, and walk away better off then when they came to us. That’s why with this QuickBooks Insight series, we hope you can identify with the experiences other customers have faced.
Today’s QuickBooks Insight Tip #6: Material – Not the Clothing Kind
Time is the most precious commodity all leaders have today. Our roles in the accounting or finance side of the house should be to protect that time. We can best do this by removing immaterial amounts from financials and instead using subledger reporting for details.
A Franchisee for a car repair franchise had set up every vendor on their chart of accounts as an expense line. He wanted to be able to look to see very specifically where his cash was going on a monthly basis. Some of these vendor totals would be less than .005% of revenues over the course of a year.
We like to explain it like an email sitting in your inbox. Every time you look at this email it takes you away from your overall goal and direction and makes you think about it. The same happens with immaterial amounts on your Profit & Loss statement.
We showed our client how to run a purchases by vendor report, and even further, how to use items to get more details without bogging down the chart of accounts. The comfort that the details were readily available allowed the customer to part ways with his detailed vendor expense reporting on his financial statement. Instead we were left with material buckets of numbers that were at least 5% of revenue or more.
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