Space for pervasive banner when authenticated
Run the Invoice Profitability by Customer Report
Learn how to use the Invoice Profitability by Customer report in QuickBooks Desktop Enterprise.
Find out how to view and run the Invoice Profitability by Customer report. This helps you see how much you make and spend on each invoice, so you can keep track of your business finances.
Use the report to:
With its latest update, you can:
View revenue, direct cost, and gross profit for every individual item on an invoice
Analyze your margins by customer/job, sales rep, class, item, or item type
Select any subtotal or line item to open the original invoice and review its details
Understand invoice profitability key concepts
Run a Profit & Loss report first to review your overhead or operating expenses. You can also run this report to get the total profit of your business.
Note: The Invoice Profitability by Customer doesn't show them on the report.
Calculate your gross profit
Understand that gross profit is the revenue from your sales after you subtract the cost of goods sold. These are the direct costs when you manufacture your products.
Formula:
Gross Profit = Revenue − Cost of Goods Sold (COGS) or Direct Costs
The Invoice Profitability by Customer report shows the values for:
Gross profit in the ($) Diff column
Revenue in the Act. Revenue column
Cost of Goods Sold in the Act. Cost column
Note: Each item on an invoice shows your gross profit but not your overhead or operating expenses.
Markup vs. Margin
Understand the difference between markup and margin so you can make the correct pricing decisions.
Formulas:
Markup = Profit ÷ Cost x 100
Margin = Profit ÷ Revenue x 100
For example: You buy an item for $50 and sell it for $75. Your profit is $25.
The report uses Markup to express profitability as a percentage. It answers the question, "How much did I increase my cost to get the sales price?".
In this example, the percentage of markup is 50%. To get this, divide the profit, $25 with the cost, $50. Then, multiply the result with 100 to show the percentage.
The % Act. Markup column in the report shows this value.
Margin answers the question, "What percentage of my revenue is profit?".
In this example, the percentage of profit margin is 33.3%. To get this, divide the profit, $25 with the revenue, $75. Then, multiply the result with 100 to show the percentage.
The % Act. Margin column in the report shows this value.
Actual cost
Double-check the value that shows up in the Act. Cost (Actual Cost) column. This comes from your company file’s inventory valuation method. It can either be average costing or FIFO (first-in, first-out).
Important: The cost shown is a snapshot taken at the moment the invoice is created. If you buy the same item later at a different price, it won't affect the cost of invoices that exist. This is also true for other reports, like the Job Profitability report.
Run and customize the Invoice Profitability by Customer report
Run and customize the report from the main menu
Go to Reports.
Select Customers & Receivables.
Select Invoice Profitability by Customers.
Select Customize Report to customize your report.
To customize your view, you can:
Change grouping: Use the Group By ▼ dropdown to view profitability by Customer: Job, Rep, Class, or Item Type.
Filter data: Use the filter layer to narrow your results by specific date ranges, sales reps, or customer jobs.
Use a detailed view: Switch to the Detailed Line-Item view to see exactly which items (services or products) are driving your margins.
Run the report from an invoice
Go to Customers, then select Customer Center.
Select Customers & Jobs.
Select a customer with an invoice whose profitability you want to see. You can either:
a. Select a customer from the Active Customers ▼ dropdown.
b. Or, enter the name of the customer in the search field.Select the row showing the invoice.
Note: Make sure that it shows Invoice in the TYPE column and the invoice number, in the NUM column.Select the row where you want to open the invoice.
Go to Reports, then select Invoice Profitability by Customer.
Add service costs to your profitability reports
To make sure you see accurate profit margins from your services, you need to add a cost to each service item. Here's how to set this up:
Go to Lists, then select Item List.
Select the service item you want to track costs for.
Select This service is used in assemblies or is performed by a subcontractor or partner. This shows the cost fields.
Enter the amount for the following fields:
Direct Cost: Enter the amount you pay for this service (For example: subcontractor hourly rate or internal labor cost).
Expense Account: Assign an expense account (like Cost of Goods Sold) to track these costs.
Select OK to save changes.
Note: Once these costs are added, QuickBooks will automatically use them to calculate the Gross Profit and Margin % for that service on your reports.
Consider the following when you run the report
Why is the actual cost for my service item $0.00?
The Act. Cost column shows values based on the cost of inventory and assembly items in your Item List. QuickBooks considers the cost of other item types like services, discounts, or other charges to be $0.00. This is also the standard behavior in other profitability reports.
Job Profitability vs. Invoice Profitability report
The Job Profitability report shows all the income and costs of a project, from start to end. On the other hand, the Invoice Profitability report shows the profit from each invoice.
Tip: Use both reports to track the progress of your projects and the profit from each billing cycle.
Understand why profit changes after edits
The profit is calculated based on the items, quantities, and prices on the invoice. If you change a quantity, add a discount, or update a price, the report will update. It will reflect the new profitability of that transaction.
Sign in now for personalized help
See articles customized for your product and join our large community of QuickBooks users.
Call Sales: 1-800-365-9606
