Phase I – Needs Analysis

Perform a Needs Analysis to determine status of cost accounting and shop floor reporting.  The Needs Analysis includes a proposed Implementation. 

Phase II – Implementation.

Develop and implement improved cost accounting metrics, enhanced shop floor reporting procedures and/or document production procedures based on Needs Analysis.

Top Six Tasks Performed in Phase II

    1. Basic tune-up of existing cost accounting
    2. Major tune-up of existing estimating protocol
    3. Overhaul existing cost accounting
    4. Enhance daily shop floor reporting
    5. Manufacturing/shop floor software procedure documentation
    6. Develop and Implement an Economic Value Added (EVA)™ model

 Typical Considerations for Improving Cost Accounting Metrics

  • Chart of Accounts usage
  • Realized yield measurement
  • Overhead expense categorization
  • Overhead rate allocation design
  • Cost of sales determination
  • Cost of manufacturing determination
  • RM, WIP & FGDS inventory valuation
  • Indirect expenses identification & measurement
  • Identification, tracking & measurement of Direct Labor (DL)
  • Identification, tracking & measurement of Direct Material (DM)

Typical Questions for Enhancing Shop Floor Reporting

  • Who sets operator targets?
  • How are production operator targets set?
  • Current status of operator reporting?
  • Production operation documentation?
  • Inventory levels and capacity?
  • Is there an accurate daily scrap report?
  • Daily operator efficiency reporting?
  • Optimum level for operator reporting detail?
  • Management intervention feedback loop status?

Shop Floor Software Procedure Documentation Elements & Issues

  • Status of daily transactions in & out of software system
  • Level of computer literacy & system training among employees
  • Status of software use for RM, WIP & FGDS inventory valuation
  • Status & usage of RFQ forms, formats, sophistication, documentation
  • Identification/documentation of when/who does which critical task


 For Start-up businesses

  • Set up accounting processes and procedures
  • Create and customize a Chart of Accounts to closely fit the new business entity
  • Create financial statements such as Balance Sheets and Income Statements
  • Create the process and procedure of pulling together the General Ledger from which to draw the financial statements
  • Provide on-site financial analysis of financial statements and market opportunities
  • Set up procedure for recording accounting transactions
  • Write Desktop Operating Procedures for accounting process personnel
  • AR – train how to record and match cash receipts
  • AP – train how to match, pay and archive invoices; train how to manage check-writing
  • Credit – establish appropriate selection criteria for issuing credit
  • Collections – set up procedure to collect from customers including how to handle complaints and refusals to pay
  • Payroll – set up procedure to deal with forms 940 & 941 and other tax forms
  • Set up payroll timekeeping forms and how to match to shop floor labor
  • Develop/execute a long-term financial plan, including pro forma financial statements
  • Insurance – set up and create a maintenance plan for Worker’s Compensation, Property and Casualty coverage and Business Liability insurance
  • Set up simple bookkeeping using either QuickBooks or PeachTree accounting software, whichever is most appropriate

For On-going concerns

  • Perform financial or operational tasks as needed to solve immediate problems while creating and implementing long-term solutions
  • Reconstruct financial statements from canceled checks and bank statements
  • Handle banking relations; negotiate credit line with financial institution
  • Design a systematic way to deal with unsorted accounting transactions
  • Improve cash flow by contacting vendors and arranging an adequate repayment plan
  • Analyze selling transactions to determine actual realized margin for each product line
  • Create a customized inventory management system
  • Perform financial analysis on pricing and costing issues
  • Build financial pricing model
  • Create reasonable specifications for shop floor reporting software
  • Train production operators how to report shop floor activity
  • Link job estimates to actual job production performance
  • Establish workable PO system that fits the business entity
  • Write Policy & Procedure manual
  • Teach accounting personnel how to use accounting software
  • Train accounting personnel how to follow accounting and control procedures

Call Paul Updike to set up a consultation. 

[contact-form-7 404 "Not Found"]