Manufacturing companies have many of the standard ledgers and purchasing and payroll can be key concerns. However, the main business area is inventory.
There is normally a master or balances file that contains details of inventory holdings at a particular date. Costs may be held in a separate file. Transaction history can be particularly useful although file sizes are often quite large. Selling prices normally have to be picked up from a separate file. Common tests include:
Analyses
Age stock by date of receipt
Compute the number of months of stock for each item held based on either sales or purchases. Produce a summary of this information
Stratify balances by value bands
Analyze usage and ordering to improve turnover
Summarize products by group, location, and type
Create a report of products in order of profitability
Reconcile physical counts to computed amounts
Calculations
Cast (or total) the file, providing sub-totals of the categories of inventory
Re-perform any calculations involved in arriving at the final stock quantities and values
Re-perform material and labour cost calculations on assembled items
Gaps and Duplicates
Test for missing stock ticket numbers
Test for missing transaction numbers
Identify duplicate stock items
Exception Tests
Identify and total stock held in excess of maximum and minimum stock levels
Identify and total obsolete or damaged stock
Identify any items with excessive or negligible selling or cost prices.
Identify differences arising from physical stock counts
Test for movements with dates or reference numbers not in the correct period (cut off)
Identify balances which include unusual items (e.g., adjustments)
Identify work in progress which has been open for an unreasonable period
Identify stocks acquired from group companies
Isolate products with costs greater than retail price, with zero quantities, or with zero prices
Matching and Comparing
Compare files at two dates to identify new or deleted stock lines or to identify significant fluctuations in cost or selling price
Compare cost and selling price and identify items where cost exceeds net realisable value
Compare the value of physical counts to General Ledger amounts
Check work orders for accuracy against original sales orders
Cash Disbursements
Reconcile inter-company transfers
Summarize cash disbursements by account, bank, group, and vendor
Generate vendor cash activity summaries for contract negotiations
Purchase Orders
Extract pricing and receipt quantity variations by vendor and purchase order
Track scheduled receipt dates versus actual receipt dates
Identify duplicate purchase orders or receipts without purchase orders
Reduce inventory by comparing projected receipts to available stock
Analyze late shipments for impact on jobs, projects, or sales orders due
Reconcile receipts by comparing accrued payable to received items
Works-in-Progress
Merge products on work orders and sale as orders for new demand analysis
Use net demand analysis against inventory and purchase orders to generate a quick material requirement planning report
Check work orders by size, priority, and for lease to shop floor
Produce shop floor activity reports by any item
Generate comparison of planned versus actual labour, materials, and time
Reconcile job tickets or time cards to work order line items
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