SM2.6 80/20 Business Analysis
We talk about the 80/20 Rule a lot in 12Faces. This article looks specifically at how to analyse many parts of your business with 80/20 to rapidly improve productivity. It is a mix of Yellow and Blue Belt
SM2.11 80/20 Inventory Management
If inventory is something you have to manage in your business, the The Amazing 80/20 Rule Tool can have a powerful impact on Profit and Cashflow.
This is a Yellow Belt article.
SM2.5 How to do an 80/20 Data Analysis
We frequently refer to the 80/20 Rule in 12Faces. It assumes you can spot the best and worse performers among your products, market, staff and customers. This article explains the simple methodology behind quickly allocating each candidate to a slot in the rankings chart. Blue Belt
Critical Financials for Business Explained
Many Owners overlook the vital business health information available by an analysis of your financials It all sounds too hard so keeps getting put off till “later” But your profitability and cashflow is easily monitored for adverse trends Accounting terminology differs between countries and even between accountants. Use our accounting terminology translator for unfamiliar terms […]
How to Reduce Variable Costs for Better Profit
Summary Especially in a manufacturing business, the variable cost of parts, resources and energy etc are likely to be a substantial part of your overall costs. This 12Faces Menu is a collection of distilled business wisdom relating to managing and reducing these costs. Variable costs are those that are directly tied to your level of production. If you produce more of an item, […]
Learn about Daily Sales Outstanding Metric
Summary cashflow is the life blood of a business but it is a difficult thing to grasp as an abstract idea. “Is my cashflow OK?” is difficult to answer. Effective management of Accounts Receivables is part of the answer. The Accounts Receivable Daily Sales Outstanding (DSO) ratio, and its partner, the Daily Accounts Payable Outstanding (DPO) ratio respectively […]
Overhead Margin Analysis Explained
Overhead Margin relates to Overhead Costs, which are the costs in your business that do not change directly with a change in your Revenue and/or a change in your Cost of Goods Sold (COGS). They include such things as: Rent, insurance. Interest. Salaries of permanent staff. Administration costs in general; telephone, office costs. Some elements of […]
C2.4.6 Cost Reduction – Supplier Relationship
One of the easiest, and least painful, places to start a cost cutting exercise is by looking at your supplier relationships. Any activity in this area can have good pay offs. Example: Assume that about half of your expenditure is on products purchased from suppliers. These could be: Manufacture: Variable Costs Retail: Cost of Goods […]
Gross Profit Margin Analysis Boosts Profit Explained
Gross Margin Analysis opens the door to understanding the complex interactions between Revenue, COGS (Cost of Goods Sold or Operating Expenses) and Gross Profit. It can be hard to understand why (e.g.) Revenue is going up but Gross Profit is going down! Gross Margin also lets you measure the operating efficiency of your business and points out which components of your COGS may be declining in efficiency. Bottom line, an improving Gross Margin is a good sign for improving profitability in your business. Yellow Belt
Management Accounting Suggestions
In this article, we discuss some of the common improvements that can be made to small business management accounting bookkeeping systems to make them more useful for management accounting and performance measurement purposes. The usefulness of many of the tools and discussions in 12Faces rely on the quality and nature of the small business management […]