 When you look at your Profit and Loss, you are looking at a consolidated version that includes every expense and income for the company over a period of time. However, you also have options on your Profit & Loss; you can make mini-P&L’s that break down the income and expenses:
• By Department
• By Job
• By Service or Product Many people find it helpful to break their revenue into ‘buckets’. Perhaps you sell products and services. Or maybe your services fall into different categories. Take Synthesis for example: We provide services in three categories: Accounting, ACT! Training, and Virtual Team Sales Support. Our products include Webinars and Training CDs. We could lump everything under one category: Revenue or we could choose to create mini Profit & Losses that tie the direct costs to of each product and service to each one of the revenue streams. Tying items together can be done with Classes or Jobs in QuickBooks and Departments or Job Costing in Peachtree.  We will focus on the easiest method in QuickBooks: Creating Classes. You can create Classes in QB’s that differentiate items by category or department. Click List, Class List. We’ll look at a sample company in QuickBooks called Larry’s Landscape which has three different departments and then one catch-all called Overhead (for those items that are not easily departamentalized, such as postage, office cleaning, electric bill.)
Once you create a Class, every check you write will have a class identified with it and every invoice you create will also designate a class: When you create an invoice for any client, make sure you classify which department is earning the revenue. If each line item has a different department associated with it, you can create these departments line by line. Similarly, when you receive a bill from a vendor or write a check that is related to a direct cost of that department, designate the department in the Class section. 
Once you do this with all money in and money out, it’s a simple matter of running a report: Profit & Loss by Class 
Now you can easily see which of your services and products are making you the most money. This allows you to focus your manpower, your time and your future spending dollars in that direction. If you would like more information on this particular tip, or for one-on-one QuickBooks or Peachtree training, contact us and we will set up a customized training for your specific company requirements. | 
