Manufacturing

CaseWare IDEA Applications

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