1. BY: CMA SUKRUT MEHTA KIRIT MEHTA & COMPANY COST ACCOUNTANTS Value Addition through Cost Audit 1

2. 2  Reduction in Costs  Increasing Revenue  Focusing on Profitable Sales (Revenue compared to costs)  Cash Flows improvement The Usual Suspects KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS

3. Knowledge work v/s factory work 3 Knowledge work refers to the work in the organization which is not physical but intellectual It is based on administrative, managerial and decision making skills Factory Work is the physical activity associated with operations, procurement, production, supply chain, sales, book keeping and Cash management Factory Work is easily quantified using various Key Performance Indicators (KPIs) and Key Result areas (KRAs) KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS

4. 4 Cycle Time improvement Administrative Time Reduction To make explicit and consistent an implicit knowledge process Add knowledge to a process to add value to the process customer Involve the customer in the process to improve the satisfaction with the result Share knowledge more effectively throughout the process Improve the execution of programs and initiatives Knowledge work improvements KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS

5. 5 Peter Drucker stated in 1968 that the age of farming was over a century ago and the age of industrial output will end in this century The entire services industry and knowledge work as a part of factory work based industries is changing the landscape of business Virtuous waste is prevalent in every function of the business and the biggest problem is that “All companies assets go home at night” Knowledge Work KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS

6. 6 Finance Procurement Stores and Quality Control Production Supply Chain Marketing Sales Functions which are soft targets KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS Use the 5 why Rule!

7. 7 Cash Flow Management Financial Accounting Taxation control CAPEX Allocation Forecasting Budgeting Pricing 7 step MIS (Perfect Target) KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS Management Information and Control System

8. 8 Data Intake Errors  60% errors can be replaced with Technology  Complex Chart of Accounts  Communication of questions and misinterpretations Making Exception the rule Increases Labor Jobs and manual entries Manual Closing of Books despite technology Ad hoc reports and their consistent requirements Helping Finance department KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS

9. 9 SOP / Guidelines for Cash Profit Statements based on:  Business Line  Regions  Products and Services Checklists and Calendar of Tax and Legal compliances Directory and scheduling of ad hoc reports Authorization guidelines and guidelines Plant / division / SBU working may differ from HO Helping Finance Department KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS

10. Performance Appraisal Report 10 KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS

11. KIRIT MEHTA & COMPANY COST ACCOUNTANTS THANK YOU 11 KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS KIRIT MEHTA & ASSOCIATES COST ACCOUNTANTS sukrutkmehta@gmail.comsukrutkmehta@gmail.com; +91 98333 93398