While you can glean a whole lot of information from a single report, a lot of the time the most insight into what’s happening in your business can be gained by comparing two reporting periods side-by-side. Comparative reporting will tell you what’s changed so that you can identify the reason and best gauge what you can do to see the results you want in future periods.
We’ve added the ability to compare two periods directly from your Profit & Loss and Cash Flow Statements.
To compare two periods in either report:
- Generate the report and select Compare to prior period...
- Select the date range that you would like to compare to the current period.
- Click Update Report
When using the comparative reporting feature the first reporting period (Date Range 1 on the left) should be the most recent period of the two.
Once you have updated a report to include two periods, the body of the report will include the totals for each period as well as two new columns: the total change between both periods as well as the change as a percentage value.
When you are able to compare changes between periods, you can begin to take action to have the changes you want to see take place. Comparing your reports and asking questions as basic as “What happened here?” can open the door to more meaningful questions like, “Should we raise prices?” or “Can we afford to start paying ourselves more?”
For screenshots and step-by-step guides, please click View original article below.