Want an easy way to measure the sales growth of your business?
Consider adding the "average sales dollar per invoice" calculation to your key performance indicators.
How to calculate:
Average Sale Per Invoice = Total sales for the period (i.e. month) / Total number of invoices for the same period (i.e. month)
- Your total sales can be pulled from your profit and loss report in QuickBooks (assuming the data is accurate of course!)
- Your total number of invoices can also be pulled from QuickBooks - just go to your Customer Center and click on the Transactions tab in the upper left of the screen. Then click the Invoices option in the list. From there, set the date range to "Last Month", and then click on the "Num" header to sort the list by invoice number. Just subtract the ending invoice number for the period from the beginning invoice number - see the image below:
Assuming you are using a +1 numeric sequence for your invoicing, you can quickly calculate how many invoices you created during the month and plug it in. If not, you can export this to Excel and get an invoice count that way too.
BENEFITS OF THIS CALCULATION
Average sales dollar per invoice gives you a simple way to see if your business is selling more via each transaction on average as you start to watch this trend over time.
Did the value go up? Maybe you had a price increase and that is being reflected in your figures. Maybe your sales team is having success with "upselling" while talking to customers (i.e. did you want fries with that too?)
Did the value go down? Maybe you had the same sales amount compared to a prior month, but you simply generated more invoices during the month. If that is the case, your billing department was cranking out more paper and postage, spending more non-value added time on invoicing, etc. Then you can evaluate ways to streamline the billing process.
This metric certainly isn't the only one to use as you manage the business, but it sure provides an easy way to do some trendspotting relating to your sales.
BEYOND QUICKBOOKS: MAKING SENSE OF YOUR NUMBERS
If you'd like to take a deeper look at the information stored in your QuickBooks and get some help interpreting it, please contact me.
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