The 5 Most Important QuickBooks Online (QBO) Reports for CPG Finance
Running a successful winery requires you to keep a keen eye on your finances. But with numbers swirling around like cab sauv at the bottom of a glass, it’s easy to get overwhelmed. Enter QuickBooks Online (QBO).
QBO generates a vineyard’s worth of financial reports that can help you gain deep insights into your company's performance. These analytical tools can help you separate the crush from the dregs in your financial data. We’ve compiled a list of the five most useful ones to help you optimize financial management and drive your brand’s success.
1. Profit and Loss Report
The Profit and Loss (P&L) report is a detailed snapshot of your winery's financial performance over a set period. It's a map that highlights key milestones and potential challenges. Use it to assess your winery's overall profitability, areas for improvement, the breakdown of your costs, and trends in revenue and profitability.
A P&L report includes revenue, cost of goods sold (COGS), gross profit, operating expenses, and net income (or loss). Revenue represents the total income generated from wine sales, COGS are the direct costs of producing wine, and gross profit is the difference between revenue and COGS. Meanwhile, operating expenses are the costs of running the winery, and net income is the final result after subtracting expenses from revenue.
On QBO, you can break the report down into:
P&L by month: Separate your report by month to observe trends throughout the year. This can be particularly helpful for wineries, which experience a surge in demand during the holidays and summer months. Use it to identify the months your wines sell best so you can strategically adjust production and inventory levels.
P&L compared to the prior year: For established wineries, comparing the current year's P&L report with the previous year's helps normalize for seasonal variations and provides valuable insights into growth patterns and overall business consistency. Just like comparing different wine vintages, this helps you evaluate whether your production, marketing, and sales strategies yield consistent results.
P&L by class: This option allows you to categorize your financial data by different segments within your business, such as product lines or sales channels. Perhaps you split your P&L report between your red, white, and sparkling wines. You can then analyze which wines drive the most revenue and pinpoint areas where you could adjust pricing or marketing efforts to increase profitability across your entire portfolio.
To generate the P&L report, go to Reports, select Profit and Loss, choose the desired date range, and customize the report by period or class as needed.
2. Sales by Product/Service Summary Report
While the P&L provides a broad overview of your winery's financial health, the Sales by Product/Service Summary Report offers a granular view of your wines. It shows units sold, revenue generated, COGS, and gross margin percentages, helping businesses determine their top-selling products and identify which items may require pricing adjustments or cost reductions. As such, it's especially useful for CPG brands that focus on unit economics.
Understanding the performance of each wine is critical for maximizing profitability in the CPG industry. The Sales by Product/Service Summary Report empowers you to identify your star performers — the wines that consistently sell well and generate healthy margins — and pinpoint those that might need adjustments.
With QBO, you can:
Analyze sales volume. Identify your best-selling wines and assess which may need more marketing or promotional efforts.
Evaluate gross margins. Compare the gross margins of different wines to identify those with the highest profitability.
Identify cost-saving opportunities. Analyze COGS for each wine to identify areas to reduce costs and improve profitability.
Optimize product mix. Use the report to make informed decisions about which wines to continue producing, discontinue, or introduce.
Navigate to Reports, select Sales by Product/Service Summary, set the date range, and customize by product or service as needed.
3. Accounts Receivable Aging Summary
Beyond the vineyards and the cellars, your winery's financial health hinges on something often overlooked — managing outstanding customer invoices.
The Accounts Receivable Aging Report lets you quickly identify customers with consistently overdue invoices and see if any underlying issues cause payment delays. In turn, it empowers you to take proactive steps to address payment problems and prevent them from escalating.
Prioritize collections. Focus on invoices that have been outstanding for a long period, as these pose a higher risk of nonpayment.
Segment receivables. Analyze your receivables by customer segment or product line to identify any patterns in payment behavior. This can help you tailor your collection strategies.
Set up automated reminders. QBO allows you to automate email reminders for overdue invoices, saving you time and ensuring consistent follow-ups.
Offer payment incentives. Consider offering discounts or incentives for early payments to encourage customers to pay their invoices promptly.
Click on Reports, choose Accounts Receivable Aging Report, select the date range, and customize by customer or aging period if needed.
4. Inventory Valuation Summary
Maybe your CPG brand produces a line of energy drinks. You could use the Inventory Valuation Summary to track the number of cases of each flavor in stock. If you notice your citrus-flavored energy drink is running low, you can reorder more cases to avoid stockouts and lost sales. Additionally, if you notice a certain flavor isn’t selling well, you can analyze the reasons and adjust your marketing or production strategies.
For CPG brands and wineries, accurate inventory management is vital for avoiding stockouts or overstocking, which can tank profitability. The report provides insights into the value of your inventory on hand, helping you track stock levels and make informed decisions about production, purchasing, and sales.
It can:
Track stock levels: Monitor your inventory levels so you consistently have enough stock to meet customer demand.
Set reorder points: Pinpoint the ideal stock to have on hand to prevent unexpected stockouts and maintain a smooth flow of products.
Prevent overstocking: Avoid overstocking by analyzing sales trends and adjusting your production and purchasing plans accordingly.
Evaluate inventory value: Understand the value of your inventory to assess your financial position.
Access Reports, select Inventory Valuation Summary, set the desired date range, and customize by location or product if necessary.
5. Budget vs. Actuals Report
The Budget vs. Actuals Report lets you compare planned expenses and income against actual performance. Having a clear financial plan and tracking your performance against it is necessary for maintaining financial discipline and making informed decisions.
Let’s look at what you can do with it:
Identify root causes of variances. Once you've identified areas where your budget and actuals differ, investigate the underlying reasons. This could involve changes in sales volume, unexpected expenses, or pricing adjustments.
Forecast future performance. Use the report to project future financial performance based on current trends and adjust your budget accordingly.
Evaluate the effectiveness of your financial planning. Compare your budget to actual results to assess the accuracy of your financial projections and identify areas for improvement in your planning process.
Benchmark against industry standards. Compare your financial performance to industry benchmarks.
Communicate with stakeholders. Use the report to communicate your winery's financial performance to investors and lenders.
Go to Reports, select Budget vs. Actuals, choose the date range, and customize by budget or fiscal year as required.
Making the Most of QBO Reports
QuickBooks Online (QBO) offers a powerful arsenal of financial reports that can provide the insights needed to make informed decisions and drive your business forward. If you're feeling overwhelmed by the sheer number of QBO reports or need help interpreting the data, consider consulting with a financial expert.
Balanced Business Group can provide tailored financial management and winery accounting services to help you get the most out of QuickBooks Online and optimize your winery's financial performance.
Contact us today to schedule a consultation.
