TRUE COGS: UTILIZING YOUR KHB BOOKKEEPER TO ANALYZE COST
We’ve all been there. Maybe your books are a little behind, but you know “in your gut” what the cost is of shipping out that truck load of product. Or, a potential investor comes to you to ask what it costs to create a pack of cookies (Shark Tank, anyone?). You know how much a bag of flour is, but how much is a pack of cookies worth of flour?
You wouldn’t be asking yourself these questions, or trying to guess, if you had a KHB Bookkeeper. And, in 99% of those cases, you will miss something. Our brains are good, but they generally aren’t that good. You may remember the cost of flour, but do you know how much to allocate for direct labor?
QuickBooks has the ability to track profitability on both projects and items, and, additionally, can be used to track complete landed cost via in product workarounds. In 60-80% of the files we see, the profitability and costing reports are not being used, and this is something easily rectified going forward. You have to know what to rectify, however.
Start with allocating expenses to clients, or sub-clients/projects. You may need to access your preferences, and allow for tracking line item by class, but once you do so, you can then allocate your costs accordingly. For item costing, make sure you receive in your goods, pay bills, etc, at the item level – not the account level. If you allocate costs by account, it goes directly to the account. Your items aren’t affected unless you allocate the cost to the item. In desktop, just click the right tab in the split line area of your transaction. In QBO, look below the account section.
What if I don’t want to figure this out? I have too much on my plate. I need it handled. Of course, if you utilize our help, we can complete your books, as well as train you on how we go through the process, in case you decide to bring them in house down the road. Either way, we can help.
What if my needs are too complex for QuickBooks? Given that QuickBooks Enterprise has Advanced Inventory and other functionality to support costing, this is not the issue it once was. However, if your company does, indeed, have complex inventory issues that expand past the in-product functionality, it might be time to look to an external inventory or costing software, such as SOS Inventory, or Fishbowl. Our Enterprise Consultants and QuickBooks Bookkeepers can facilitate the decision process, walking you through the pros and cons of each software, many times at no or little cost to your company, unless you decide to move forward with a purchase.
If you decide to move forward, our optional implementation costs are straightforward, and include a cost of ownership summary that extends past your first year, making the decision crystal clear for your buyer. Add on our bookkeeping services (flat rate or hourly), and you’ve just solved a problem, with a clear understanding of the cost point associated with it. We complete a custom quote or proposal for each client, based on your feedback on what your needs are.
So what do I need, a KHB Bookkeeper, an implementation, purchase, or a mix? It’s a lot like a puzzle. You may have a 1, 2, or 5 piece puzzle, or a mix, but our goal is to make your experience as clear and simple as possible. You can purchase the product through our team, leaving you with no cost to us. You can leverage our bookkeeper’s knowledge and experience to train you, or your team, on how to correctly allocate for cost, or you can outsource the whole shebang, engaging KHBO for implementation, and bookkeeping. Whatever you choose, our clear proposal will outline your cost, and the expected deliverables. This might be why so many clients return year after year to engage us for additional phases, training, projects, or services.