Sticking with our corny accounting jokes to lead into our Income Statement series of blogs, here's our last one: What's the definition of a good tax accountant? Someone who has a loophole named after them!
Boy, glad that's the last of those—I'm not sure that one even has a punchline! But it does provide a nice segue into our final installment of this 4-part series.
If you do have a good tax accountant, that's great, they'll be able to provide much-needed insight into your taxes and help you get the most from your expenses. But they most likely won't be able to tell you what your Income Statement can about the health of your business.
Who are your BEST clients, and who needs attention?
We all know that getting existing clients to spend more money with you is easier and costs less than finding new clients. So how can you quickly (and easily) see how much your clients are spending and how that is changing over time?
You guessed it—your Income Statement.
As discussed in Part 3 of the Income Statement series, the Income Statement report can tell you WHEN your products are selling, WHAT products are selling, and now we'll show you how to find out WHO you're selling to (and not selling to).
Below is an example of how you can drill down on who is buying your products and/or services. By selecting the "Client or Supplier" option in the "Arranged By" drop-down in Kashoo, we can see who spent how much, and also get key information as to when they typically make purchases.
In our example, we can see one client spent over $4,000 in June, but sales with them have since declined. Perhaps we should reach out to find out why. Based on the information in the Income Statement you can now start to generate some questions about your business:
- Do you have a client that has dramatically increased their monthly activity with you? It's nice to acknowledge your loyal customers.
- Has a particular client's sales dropped off? Perhaps they found a new supplier with more competitive pricing!
- Does a client only purchase when you run a promotion (you know when you ran a promotion, right?)
If you didn’t look at this report arranged by client, you might see that there had been virtually no change in your sales and you would assume things are fine.
Once you arrange it by client, all of a sudden you are seeing something really useful, more important, something you can take action on—that being one of your clients has lowered their spend with you significantly. This isn't a good thing, but hopefully fixable.
Sometimes all it takes is a phone call to touch base with your clients to find out what is going on, and in turn, you can do what you need to do to make that client happy again. For your new clients, or the client that has increased their spend with you, this is the perfect opportunity to reach out, thank them for their business, ask for a referral or testimonial, and find out if there are other ways you can help them.
So there you have four different ways you can use the Income Statement report to learn about the health your business. Now you can use that information to take action and grow your small business in the years to come—and like a funny joke, that's something your accountant won't be able to tell you.
For your convenience, here's a recap of our 4-part Income Statement series:
- Part 1: How much did you make last week, last month, and last year?
- Part 2: Do you know what your best and worst selling items are?
- Part 3: Do you know WHEN your sales are best?
- Part 4: Who are your BEST clients, and who needs attention?
As you can see, Kashoo's Income Statement can provide an abundance of information. You can start a 14-Day FREE trial today with the Kashoo web app, or visit us in the App Store to start your 30-Day FREE trial of our iPad or iPhone accounting app. No commitments, no hassle, cancel any time.