Which Clients are in Your Top 20?

I recently read an article on the Pareto Principle, which states that 80% of your results come from 20% of your work. It was interesting to read the background on the principle and see it used in areas  other than business, like clothing (we wear 20% of our clothes 80% of the time), cooking (we cook 20% of our recipes 80% of the time), etc.  But it got me to thinking about how you can identify the top 20% of your customers in QuickBooks, the top 20% of your items/services, sales reps, your expenses, etc.   While it won’t always be an 80/20 (could be 75/25), you still get the idea.

If you are in a 2010 version of QuickBooks, the company snapshot can at least begin to give you a visual.  But here are some reports/graphs that might be helpful.

  • Profit & Loss – Choose whatever date range you want, then select Modify.  In the lower right-hand corner, you’ll see an option for % of income and % of expense. Choose one or both – could be an eye-opener!
  • Sales by Customer Summary – Again, choose your date range then select Modify.  Choose % of column.  You’d have to export to Excel to sort, but you can quickly identify your top clients.
  • Sales by Item  Summary – Choose your date range.  Percent of Sales is already an option. If you don’t want some of the other information, then select Modify and get rid of any columns you don’t want to see.   In the report screen, you may also want to click on collapse if you have numerous subitems – it’s sometimes easier to read with fewer items listed.
  • The Income and Expense graph can be customized – you can look at account, customer or class, and choose income or expense. On the right, you’ll see the percentages of income and expense plus a pie chart for a visual.
  • The Sales Graph can also be customized.  You can see sales by item, customer or sales rep and again you’ll see percentages and a pie chart.

Some of these reports don’t address actual profit from customers, i.e. perhaps sales were high, but so were expenses or perhaps you’ve invoiced, but have yet to be paid or paid in full.  So, here’s a custom report you can create and memorize on your own:

  • Click on Reports, Custom Summary Report
  • Choose your date range
  • Choose your report basis – cash or accrual
  • Display columns by – Total only
  • Display rows by –  Customer
  • Display Columns for Total
  • Sort by Total
  • Add any sub columns you want – perhaps % of column

So, with these tools, you can now focus 80% of your time on the 20% that is most productive and profitable for your business.  You can email me if you have problems with these reports.

I would love to hear if there were surprises when you ran these reports.

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