Welcome to Part 3 of our Income Statement report series. Sticking with our theme of knee-slapping accounting jokes to break the ice; What does an accountant say when you ask him the time? It's 9:37 am and 12 seconds; no wait - 13 seconds, no wait - 14 seconds, no wait...
Ouch, these accounting jokes are groaners, aren't they?!? But speaking of time, that's another key item of interest the Income Statement report can provide. Our last post discussed what you're selling (or not selling), and for Part 3 of our Income Statement series, we're going to add to that by discussing not just WHAT you're selling, but WHEN you're selling it.
Do you know WHEN your sales are best?
Looking at patterns in your business over six and twelve-month cycles can give you great insight into not only client spending patterns, but yours as well. Taking "Items" as an example again, you can run the Income Statement report in Kashoo and compare how a certain item sold compared to previous points in time.
In the example screenshot, we can compare "Item" sales month-over-month to the current month (December 2016 in this case). Focusing on "Items", you can see that the sales for "Graduation Package" is high in June, something we'd expect as June is graduation season.
On a similar note, we can also run the Income Statement report and focus on "Accounts," as seen in the following screenshot:
Comparing month-over-month in “Accounts” view, we see above that November has higher sales of "8x10 Prints," perhaps a sign that Christmas is coming? But is there something that can be done in other months to promote sales of "8x10 Prints?" We know June's sales for "Graduation Packages" is popular, maybe there's a sales promo that can be created with the two.
With this information, you can now form some questions about your business:
- Is there a month where you have unusual sales activity (high or low)?
- Have you kept a marketing calendar? Do you know what marketing activities you performed that might have impacted your numbers?
- Was there some other event that possibly caused sales to increase/decrease, like weather, or a celebrity endorsement of a product/service similar to yours?
Some businesses grow month-over-month and some businesses have seasonality to contend with. Learning when your business goes through ups and downs allows you to plan accordingly for things like:
- Are there trends you can see with products/services?
- Should you hire a new employee?
- Is it a good time to buy new equipment?
The Income Statement report, when comparing time intervals, will give you information your accountant can't—information that's crucial to the success of your business. And it allows you to make decisions that can grow your small business year-after-year.