CPA CA Anand Soni ,’s Post

March month has just started Every company will advise their team and allocate team’s precise hours to submit their departmental forecast for: Sales turnover product wise Production Planning, product wise quantum to produce Raw material purchase required and its cost Spares and stores purchase cost Repairs and maintenance cost Salary and Wages cost Administrative Overheads cost Factory Overheads cost and So on for the other cost involved for the company If your company is into yarn manufacturing business then www.p4pops.com is helpful for cost estimation, budgeting and planning.... #budget #financialaccounting #financemanagement #forecasting #managers #management #ppc #production #productionengineer #planning #cost #costestimating #profitability #textile #spinning

THE OVERHEAD SPIRAL OF DEATH Standard costing & margin calculation can lead to poor management decisions regarding outsourcing products or discontinuing product lines. Over the years I’ve worked with a few companies that brought me in to understand why their standard costs keep increasing. In each case, here is what happened: ·      Management evaluated product profitability based on a target standard margin %. ·      Products with standard margins less than target needed to be discontinued or outsourced. ·      Standard costs of remaining products increased as a result. ·      More products had to be outsourced or discontinued. In one case, corporate shut down one factory because it was not profitable. In another case, management laid off almost all factory employees. It’s essential and necessary for lean companies to move away from standard costing. Learn how in The Lean CFO: https://lnkd.in/gcY9BpuR #lean #leanthinking #leanaccounting

Are you aware of the various costs associated with running a factory? Understanding factory costs is essential for effective financial management and optimizing operations. Our latest blog breaks down direct labor, indirect labor, material, and overhead costs, providing strategies to reduce expenses and enhance profitability. Discover how to streamline your operations and negotiate better with your factories! #Manufacturing #CostAccounting #BusinessStrategy

Components of Factory Overhead  Factory overhead, often referred to as manufacturing overhead, includes a variety of indirect costs that are not directly tied to the production of specific goods but are necessary for the manufacturing process. These costs can be broadly categorized into indirect materials, indirect labor, and other indirect expenses.  #Manufacturing #Process #Overhead #Indirect #Manage #Production #Cost #Material #Labor #Expenses #Business

As a production or Quality leader , are you really aware of your cost Breakdown!! Every dollar/Penny counts. As a production leader, understanding where your money goes is crucial for maximizing profits. Let's break down the complex world of costs into simple terms. The Big Picture: Sales Revenue, Costs, and Profit Your product's journey to profitability starts with sales revenue: the money coming in. But the total costs is the sum of everything you spend to create and sell your product, are subtracted from sales revenue to determine profit. Sales Revenue - Total Cost = Profit. But how i calculate the Total Cost. Total Cost = Direct Cost + Indirect Cost Direct Costs: These are the expenses directly tied to producing your product. Imagine building a car , the steel, rubber, and labor to assemble it are direct costs. They fluctuate based on production volume. Indirect Costs (Overhead): These are the costs that support production but aren't directly linked to each unit. Drilling Down Deeper: Components of Direct and Indirect Costs Direct Costs: Material Costs: The price of raw materials used in production. Labor Costs: Wages paid to workers directly involved in manufacturing. Machinery Costs: Depreciation, maintenance, and energy consumption of production equipment. Indirect Costs: Technical Overhead: Costs related to research, development, quality control, and engineering. Administrative Overhead: Expenses for general management, finance, HR, and other support functions. The Impact on Your Bottom Line By analyzing these cost components, you can: Identify cost-saving opportunities. Pinpoint areas where expenses can be reduced without compromising quality. Optimize resource allocation: Ensure that resources are used efficiently and effectively. Make data-driven decisions: Use cost information to guide production planning and pricing strategies. Enhance profitability: Increase your profit margin by minimizing costs and maximizing revenue. Remember: Consistent cost monitoring and analysis are key to maintaining a competitive edge. Operating Profit = Total Revenue - Total Cost (Assuming ZERO Stock) Would you like to delve deeper into a specific cost category or explore cost-saving strategies? DROP A MESSAGE #production #costcutting #profit #quality #operations #costmanagement #business #finance #manufacturing #industry

Do you know what story your financials are telling? One of our client’s newly acquired portfolio companies faced escalating manufacturing costs, particularly in raw materials and labor, squeezing profit margins. Beyond rising production costs, their operations were plagued by highly inefficient processes, leading to excessive waste and underutilized capacity. To combat these challenges, we worked closely with the company’s leadership to implement lean manufacturing principles, renegotiate contracts to cut costs by 12%, improve scheduling and capacity to reduce overtime by 15%, and increase factory utilization by 20%. We audited the cost structure to identify excess spending and implemented a cost-control framework for better expense management. Among other initiatives, our efforts secured a 15% increase in overall profitability within the first year, reversing several years of declining performance and positioning the company for sustainable growth. All this to say, your financials tell a deeper story. Partner with an experienced advisor to turn the numbers into a winning strategy. #ManufacturingEfficiency #CostOptimization #LeanOperations #ProfitabilityBoost #BusinessTurnaround

When embarking on the journey of building a warehouse, it's essential to navigate the intricacies of cost considerations with precision. Mastering these elements ensures informed decision-making and paves the way for a successful and cost-effective warehouse project. #Warehouse #Cost #Budget #Planning

Best way to focus on your business and to improve the revenue of business: The few interpretation of the business tactics. 1. If you doing manufacturing or retail business. Now you can focus on your business because we are here for you. We will take care of the major logistics part of your business. 2. Our dynamic team will be playing in the back screen for - #Inventory planning (SKU Wise), #Seamless dispatch planning. And we can able to be provide the entire things as a recorded report like eg- #As on date stock in hand, #Accurate sales report, #Cost control workings and finally #Profit & Loss report. If you going to be choose us you can enjoy the below following benefits forever. #Manpower - Don’t need to be maintain the extra manpowers & this costing also will be reduced (eg- #Yearly bonus of employees, PF, Indurance, & Staff welfare). #Warehouse - Don’t need to be maintain the warehouse and commercial vehicles expenses and depreciation. #Forecast - We can only focuse on the forecast and to be achieved what we planned as well. #Operation - When your not directly involved in this kind of operations the ultimate one of the time is yours then your business expansion is in your hand. Where the expansion is happening the prosperous growth is there.

Great blog on one of my fav topics- cost center planning! Thanks Surajit Mohanty ! https://lnkd.in/eUvdVjyf

Breaking Down Manufacturing Costs https://lnkd.in/gSjWK_a6 🏭 Ever wondered how manufacturing costs are broken down? Understanding the difference between direct and indirect costs can help streamline processes and reduce expenses ✅ Manufacturing costs are essential to producing a product. They include: 🔹 Direct Materials: The raw materials directly used in the product 🔹 Direct Labor: Wages of workers directly involved in production 🔹 Manufacturing Overhead: Indirect costs like factory rent, utilities, and indirect labor/materials 🧠 Did you know there's also non-manufacturing costs? These include selling and administrative expenses, which are costs not tied directly to production but still vital to business success 🎯 When calculating your total manufacturing cost, consider: 🔹 Prime Cost = Direct Materials + Direct Labor 🔹 Conversion Cost = Direct Labor + Manufacturing Overhead These insights can help you better allocate resources and improve operational efficiency #LeanManufacturing #ManufacturingCosts #CostReduction #ProcessOptimization #OperationalEfficiency #ContinuousImprovement Source: Balaji L R