Have you ever heard of the Pareto Principle or the 80/20 theory? Business-management consultant Joseph M. Julian named the principle after Italian economist Vilfredo Pareto. In 1906 Pareto observed a connection between income and wealth, where 80% of Italy’s land was owned by 20% of the population. He carried out surveys in other countries and discovered a similar pattern applied. Further studies have found the 80/20 theory to be to true across the board where in many events 80% of the effects come from 20% of the causes.
In your business 80% of your profits are generated from 20% of your efforts. The reports in your QuickBooks software can be used to do an 80/20 analysis of your business. A Certified QuickBooks ProAdvisor should be able to provide you with the QuickBooks support to do just that. With the help of a professional QuickBooks support team, you can analyze and what 20% of your efforts generate 80% of your profits. This will enable you to identify what areas of your business need to be trimmed down and where to put more of your efforts.
QuickBooks is a great management tool for your business, but unless you have the ability to navigate and use the program you may not find it easy to use. A qualified QuickBooks support team should be certified in every aspect of this software and should be able to provide you with the guidance you need to use it effectively. Outsourcing your bookkeeping function to a Professional Bookkeeping Service is another option that would allow you to focus on analyzing your financial reports and making good business decisions for even greater efficiencies.
With an 80/20 analysis from a professional QuickBooks support team, your business can be adjusted to run at its optimum profit potential. Rather than stressing and trying to do this on your own, invest in the help you need to get it done right. Finding the flaws in your business will allow you to correct them to make it run more efficiently.
Remember: Good Books = Good Decisions = Positive Cash Flow.
The author: Dawn Contardi, owner of Sharp Bookkeeping Service, a Certified QuickBooks ProAdvisor and a member of the American Institute of Professional Bookkeepers with 25 years of experience can be reached at 732-458-3800 or contact us.