Sales Reports: Understanding How it Works

Relationship between Sales Orders and Sales Report

The Order Report creates summaries of total sales, quantity sold, and other metrics from each Sales Order you receive. It then allows you to break down those metrics easily by dimension such as customer name, product, etc.

Applied creatively, the QuickBooks Commerce Order Report can be a powerful tool which can help you find useful insights into your sales data.

Accounting for total sales, profit, and tax

Understanding the difference between fulfilled and unfulfilled orders

Your Cost of Goods Sold, profit, discount and tax are calculated by separating fulfilled orders from unfulfilled. Consequently, all metrics from Sales Orders (except Total Sales and Quantity) are split into “realized” and “potential”.

“Realized” sales metrics come from fulfilled sales orders, and “potential” sales metrics come from unfulfilled sales orders. For example, items that have not yet left your warehouse will contribute to your potential profit, tax, discount, and cost of goods.

We call such profits and taxes “potential” because there is a chance that those orders are cancelled.

Understanding the calculations of sales, profit, tax, and other metrics

Order report calculates sales metrics separately for each SKU in your sales order and then makes a summary of sales for each SKU. This means that the Sales Report performs rounding of subtotal sales values and taxes by order line item.

This approach has both an advantage and a disadvantage. On the upside, it allows us to aggregate and breaks down sales of each SKU by different dimensions: product, customer, etc. On the downside, it may lead to accumulation of rounding errors and result in an overall 1-2% error in reported sales, profits, and taxes.

For example, let’s take a look at two mock sales orders:

Sales Order #1 / Date: January 1, 2019

Sales Order #2 / Date: January 1, 2019

Sales Report will then combine sales of Gecko Plushie from each mock Sales Order above, resulting in the following table:

Output of Sales Report

As you can see from the output above, Sales Report combined sales of Gecko Plushie from two mock sales orders and created an aggregated view.

Order Report can visualize sales not only based on SKU of each order line item, but also by product, customer, and other dimensions.

Treatment of Landed Costs

The Order Report excludes all freeform order line items such as Shipping costs from computations.

For example, if some of your Sales Orders contain shipping fee as a separate order line item, those shipping fees will not be accounted for.

Using preset reports

You might have noticed that in this document we refer to a single Order Report only, whereas in the Intelligence Hub QuickBooks Commerce provides links to multiple reports:

The reason behind this is that the Order Report is an application within QuickBooks Commerce that generates a unique set of data which contains summary information about all your sales of all your products to all customers. It only generates one set of data like this per each account.

However, users can filter that set of data in many ways. The multiple types of Order Reports that you see in Intelligence Hub are quick links to specially configured preset filters.

If you need more granular control over your reports, you can always modify and customize filters. QuickBooks Commerce makes creating your own presets simple and painless.

For example, if you would like to dig deeper and see how a particular product performed during that time period, simply click on Add Filters.

You will be able to select filter(s) from the drop-down menu.

Once you select Product you will be able to search for that particular product. Click on Apply Filter. Based on the example above, you will only see results for the Product 'Cat Scratch post'.

If you would like to exclude certain data from the Report results, you can add an is not filter to the report by selecting any of the available filters, select is not from the middle drop-down menu, add the specific criteria on the right drop-down menu. Click on Apply Filter.

Based on the example above, data from the B2B eCommerce channel will be excluded in this report.