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Presentation by Stanley – 1st Mar, 2021
About Frontier Knitters Pvt. Ltd.
FRONTIER KNITTERS, a GOVT. OF INDIA RECOGNISED EXPORT HOUSE targeting Rs.200 crores T.O for the current year.
-Into Manufacture & Export of knitted Ready made garments
- Consists of Sports Wear, Men's Wear, Outerwear, Nightwear Girls Wear and Infant Wear.
- Serving customer spread over USA, GERMANY, SWITZERLAND, NETHERLAND, UNITED KINGDOM, IRELAND AND OTHER EU COUNTRIES.
Company
Product Range
Customers
Exporting countries
Scope
Building Financial discipline into the system
1. Accounting -partly
2. Finance
3. Costing
4. Budgeting
5. Treasury
Activities of Finance department
1. Arrange Finance as required for operation
2. Working capital management
3. Manage receivables/payables
4. Deal with Bank - bills, stock, credit limits, submit reports, etc
5. Arrange loans and manage investments
6. Treasury management
Finance discipline
Financial discipline has to be
developed from
Marketing ->
-> order processing ->
-> purchase ->
-> factories ->
-> shipping ->
-> finance dept.
Business Process
ORDE R PROCESSING
& PURCHASE
FACTORIES & SHIPPING
FINANCE DEPT.
MARKETING
Key stress areas to be identified
1. Gross profitability margins
2. Overheads
-- Factory & Head Office
3. Working capital adequacy
4. Stock management
5. Funds management
MARGINS
WORKING CAPITAL
OVERHEADS
Areas Finance discipline is required
•Receivables
•Payables
•Capital investments
•Budget & allocation
•All Profit centers
•Stock maintenance
•Reporting
- to top management
- to bank
(assuming accounts dept. does statutory reporting)
What we try to achieve by doing this exercise
1. No strain in the cash flow of the company
2. Pay creditors in time
3. Plan for the betterment
4. Stop using working capital for building Capital assets
5. Avoid issuing PDC
6. Get good quality product at reasonable price
7. Bank credit usage discipline & avoid excess borrowing
8. Make all units as profit centers
9. Stock maintenance at optimum level
10. Engage bankers, when in need
11. Identify lossmaking orders, lossmaking profit centers, lossmaking buyers, loss making styles, etc
Areas - new systems will be implemented
1. Cash flow statement monthly (with weekly schedule) – to be used for funds planning for all profit centers
2. Budgeting projection vs actuals
3. Monthly Business Report
- of H.O
- all profit centers
4. Monthly sales report
5. Treasury
apart from regular monthly P&L
ageing report
and OCR
Exclusions
Areas which will not be
focused during this
exercise.
•Accounting
•Auditing
•Internal Auditing
Internal Auditing
Accounting
Auditing