80 - 20 RULE Definition

Bookmark and Share

80 - 20 RULE (Pareto Principle/Law) is a general rule of thumb in business that says that 20% of the items produce 80% of the activity, while 20% of the product line produces 80% of the sales, 20 % of the customers generate 80% of the complaints, and so on. In evaluating any business situation, look for the small group which produces the major portion of the transactions you are concerned with. This rule is not exactly accurate, but it reflects a general truth, nothing is evenly distributed.

Learn new Accounting Terms

OTHER OTC see NON-BULLETIN BOARD.

MANAGERIAL ACCOUNTING is a system using financial accounting records as basic data to enable better business decisions in the areas of planning and control.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.