Value Addition through
Cost Audit
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BY:
CMA SUKRUT MEHTA
KIRIT MEHTA & COMPANY
C O S T A C C O U N T A NT S
The Usual Suspects
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Reduction in Costs
Increasing Revenue
Focusing on Profitable Sales (Revenue
compared to costs)
Cash Flows improvement
KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS
Knowledge work v/s factory work
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 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
Knowledge work improvements
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 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
KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS
Knowledge Work
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 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”
KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS
Functions which are soft targets
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 Finance
 Procurement
 Stores and Quality Control
 Production
 Supply Chain
 Marketing
 Sales
Use the 5 why Rule!
KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS
7 step MIS (Perfect Target)
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 Cash Flow Management
 Financial Accounting
 Taxation control
 CAPEX Allocation
 Forecasting
 Budgeting
 Pricing
Management Information and Control System
KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS
Helping Finance department
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 Data Intake Errors
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
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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
KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS
Helping Finance Department
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 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
KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS
Performance Appraisal Report
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KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS
THANK YOU
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KIRIT MEHTA & COMPANY
COST ACCOUNTANTS
KIRIT MEHTA & ASSOCIATES
COST ACCOUNTANTS
sukrutkmehta@gmail.com; +91 98333 93398
KIRIT MEHTA AND COMPANY - COST ACCOUNTANTS