How To Calculate CAC in Quickbooks | Arithmix

If you're running a business, you've probably heard the term "CAC" thrown around. But what exactly is CAC, and why is it important to calculate it? In this article, we'll break down everything you need to know about CAC and how to calculate it in Quickbooks.

What Is CAC?

CAC stands for "customer acquisition cost." It's the amount of money you spend to acquire a new customer. This includes all of your marketing and sales expenses, such as advertising, sales commissions, and the salaries of your marketing and sales teams.

Calculating your CAC is important because it helps you understand how much you're spending to acquire new customers. This information can help you make more informed decisions about your marketing and sales strategies, and can also help you identify areas where you may be overspending.

When Is It Valuable To Calculate CAC?

Calculating your CAC is valuable in a number of situations. For example:

• If you're looking to raise funding for your business, investors will likely want to see your CAC to understand how much you're spending to acquire customers.
• If you're trying to improve your marketing and sales strategies, understanding your CAC can help you identify areas where you may be overspending or where you could be more efficient.
• If you're trying to grow your business, understanding your CAC can help you set realistic growth targets and identify areas where you may need to invest more in marketing and sales.

Now that you understand what CAC is and why it's important, let's dive into how to calculate it in Quickbooks.

How To Calculate CAC In Quickbooks

Calculating your CAC in Quickbooks is relatively straightforward. Here are the steps:

1. First, you'll need to gather all of your marketing and sales expenses for a given period. This could be a month, a quarter, or a year, depending on how frequently you want to calculate your CAC.
2. Next, you'll need to determine how many new customers you acquired during that period. This could be a bit trickier, depending on how you define a "new customer." For example, if you're a subscription-based business, you may want to count only customers who signed up for a new subscription during the period.
3. Once you have your total marketing and sales expenses and your total new customers, simply divide your marketing and sales expenses by your total new customers. The resulting number is your CAC.

For example, let's say you spent $10,000 on marketing and sales in a given month, and you acquired 100 new customers during that month. Your CAC would be $100 ($10,000 / 100).

Calculating your CAC regularly can help you stay on top of your marketing and sales expenses and make more informed decisions about your business. With Quickbooks, it's easy to track your expenses and calculate your CAC, so you can focus on growing your business.

How Do You Calculate CAC in Quickbooks

Quickbooks itself isn’t naturally geared towards letting you calculate complex metrics like CAC. As an alternative, teams typically use products like Arithmix to import data from Quickbooks and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Quickbooks, combine it with data from other systems, and create calculations like CAC.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating CAC in Arithmix

Calculating metrics like CAC is simple in Arithmix. Once you've created your free account, you’ll be able to import your Quickbooks data, and use it to create natural language formulas for metrics like CAC.

Arithmix is designed to give you the power to build any calculations you want on top of your Quickbooks data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.