Intuit recently updated QuickBooks 2024 with Release 16 (specifically R16_34), and that release included an Invoice Profitability Report.
Back in March, we introduced you to the Item Profitability Report. However, last month, Intuit updated QuickBooks 2024 with Release 16 (specifically R16_34), and that release included an Invoice Profitability Report that allows users to see the precise profit generated from every single transaction, not just the overall job. The Report enables the identification of the most and least profitable invoices and services.
The Report can be accessed from the Reports menu, then choose Customers & Receivable, and then select Invoice Profitability by Customer. Depending on your requirements, you may need to Customize (the) Report. This Report enables you to sort customers and invoices by profitability, allowing for efficient review of customer-level performance.
With this new Report, you can identify which sales drive profitability for your business, enabling you to improve resource planning, pricing, and customer prioritization. You can also use profitability insights to guide pricing decisions and negotiate effectively with customers. You can easily:
Let's examine some of the numbers you will find in this Report.
Actual Cost:
The value in the Actual Cost column comes from your company file's inventory valuation method. It is most likely the Average Cost method, but some Advanced Inventory users may be using the FIFO (First-In, First-Out) method.
The cost reflected represents a 'snapshot' of the inventory cost at the time the Invoice was created. It is the same value that is posted to COGS (Cost of Goods Sold), then the item is relieved from Inventory. This means you can have two different Invoices for the same item with different costs if the invoices were on different dates/times.
The Act. The Cost column displays values based on the cost of inventory and assembly items in your Item List. QuickBooks considers the cost of other item types, such as services, discounts, or other charges, to be $0.00. This is also the standard behavior in other profitability reports.
Actual Revenue:
The value in the Act. Revenue column represents the revenues generated for the inventory item(s) at the time of the Invoice based on your sales price.
$ Difference:
The values in the $ Diff column represent the 'gross profit'. Gross Profit is computed as Revenue – Cost of Goods Sold (COGS).
% Actual Markup:
The Report uses % Actual Markup to express profitability as a percentage. It reflects the percentage by which you increased your cost to achieve your sales price.
% Actual Margin:
The Report computes the percentage of revenue representing your profit and expresses that value in the #% Actual Margin.
Alternate Way to Run the Report
You can run the Invoice Profitability by Customer Report from an Invoice. From any invoice whose profitability you want to view, with the Invoice open, choose the Reports tab, then select 'Invoice Profitability by Customer'.
The Report contains all the same information, but only for the selected Invoice.
Disclosures:
Content based on Intuit source content within QuickBooks Desktop (Enterprise) 'help'. Graphics adapted from actual in-product screen captures within QuickBooks Enterprise 2024. Intuit content adapted by Insightful Accountant from Intuit sources is furnished for educational purposes only.
As used herein, QuickBooks Desktop (and all related SKUs, including QuickBooks Enterprise) refer to one or more registered trademarks of Intuit® Inc., a publicly-traded corporation headquartered in Mountain View, California.
Any other trade names or references used herein may refer to registered, trademarked, or copyrighted materials held by their respective owners; they are included in the content for informational and educational purposes only.
This is an editorial feature, not sponsored content. No vendor associated with this article has paid Insightful Accountant or the author any form of remuneration to be included within this feature. The article is provided solely for informational and educational purposes.
Note: Registered Trademark ® and other registration symbols (such as those used for copyrighted materials) have been eliminated from the articles within this publication for brevity due to the frequency or abundance with which they would otherwise appear or be repeated. Every attempt is made to credit such trademarks or copyrights within our respective article footnotes and disclosures.