Do’s and don’t in Audit of Scrap Generation

How to Audit the Scrap Entry in Finsys ERP ( or any ERP of the World ) …

Things to Remember… things to cross check…. Important Tip. Important Guidelines…. use any Software of the world. even in manual production and PPC….

What to do
Pros
Cons
Important focus

Income tax
GST
TDS
TCS
ERP
All points

Ideally, move it properly
Document sign it
Printout it
Permanent audit

GST says…manufacturing process, logically sell it
Since GST Department wants GST on that

Income tax needs TCS on Scrap sale

Internal area

Is Raw Material going into Scrap ?
Master batch ?
Motors… going into Scrap ?
Sold excess or short ?

If should have been 10 ton…sold 6 ton… how ?
If should have been 10 ton… but selling 15 Ton…. big loss of
Raw Material becoming rejection

3 people to sign why this rejection happened

From x to y

Printed boards lost, why
Root cause ?
Making cooler, AC, paint..anything… why lost, why scrap ?
Offer Qnty out from WIP and offer Qnty inward of scrap

If you dont seek
You might face big losses, if these precautions are not taken

Like cash ka hisaab
Whether production RM or other Material

https://youtu.be/P3AHmQvvqA4

See the Detailed discussion and Suggested SOP— for Scrap Generation in Finsys ERP —- in this Youtube Video link below

With the Do’s and Don’ts…. RM going into Scrap ?

Youtube link for Scrap ? How to control how much Raw material ….. sold off at Scrap in your company ? Safety steps

See the Youtube video above, to see, How to control how much is being sold off at Scrap in your company ? How to cross Check… Short is a Loss, Excess is Bigger LOSS

 

It is important that you are Entrepreneurs, as CFO, as Stores / Materials Manager, as Auditor, cross check the system of Scrap Accounting

Contact us

Sale Audit… How to Audit the Sales Order and Sales invoices ?

Audit of Accounts Receivables ( Debtors )

 

In our journey of making our Sale audit better and more effectively done earlier we have discussed about –

What important points to be check while auditing ? when you are –

1.Taking New Sales Order – https://mlgassociates.in/if-you-are-doing-your-sales-order-audit-correctly  (Click and Read)

2.Creating New Customer – https://mlgassociates.in/new-customer-creation(Click and Read)

Today’s Topic gonna be New HSC/SAC Code and Gate Out Record

HSC/SAC Code

 

If your HSC code is wrong then it will create troubles for you.

If your industry have 8 digit HSC code and you entered 6 digits this will create troubles and if you have 6 digit code and you make the code by prefixing/suffixing it with 00,01 & 10 this will again creates trouble to you.

SOP should be followed.

Talk and consult with your Consultants about sales or purchase item’s new or already entered wrong codes and improve things as much as possible.

 

Gate Out Record

 

If just invoice making is sufficient for recording material to be out from your place ?

What is the proof of Material gets out of your sites main gate after making invoice ?

You should check this. Also check whether your ERP has a feature Like finsys- main exe.-F2, Web Finsys -Scaning feature that who let the material to be out from gate and at what time and also from which transport?

 Get Out gives you control of seeing with proof that when the material gets off from your site.

For more such points which are important for your internal audit will gonna be discussed soon, just stay tuned.

For more information and clarity watch the video below by – Mr. Sangeet Kumar Gupta, F.C.A and Co-founder of Finsys .

 

Video Shot at Jaipur Marriot

 

What are the good things you must see during audit of the Sales Side. Debtors, Prices, Sale order and so many things.. Practical Ideas.

Audit of Accounts Receivables ( Debtors )

is a Good thing to do

What to Check in Sales Order?

 

 

We usually assume that if invoice is generated by system it has more reliability. That’s why sale audit is mostly done just for taxation.

But

—Here are some questions for you—

1️⃣

Have you checked your Sale order’s price?

2️⃣

Have you checked that the price of invoice is according to the discussed, agreed and final price?

3️⃣

If effective date is correct or not ? –

(For more clarity like – the price was effective from 1st April and you started the invoicing of price changed and you get order on 10th April and you changed the price in your ERP on 15th April.

So..as per the things price gets changed from 15th April, if the debit notes were made for the dates from 1st to 15th April or if credit notes have to be issued-issued or not ?)

 

Who is Responsible and Accountable for all this?

You have to understand that it’s also an important area for Audit.

 

There are some important areas of Sale audit.

 

Today we gonna discuss about one of them which is –

 

New Sales Order

 

Here is the checklist you should be checking-

Which Sale order is new in this month? – It can be either fresh or amended orders.

What is the position of the orders? – If in literal we got the order or it’s just party has asked for the quotation on mail.

We should ask or cross-check with the management that – If we get the price increase in any order in this month according to our assumption or not?

After checking the Sale order given by management you should check whether the already rate entered in your ERP are correct or not?

Check the Sale order physically or either make demand for it. As there is a possibility if you doesn’t have your customer’s P.O (Purchase Order) and you changed the price, this will not be considered as increase in price.

If taxes deducted are ok or not or are according to discussion or correct or not ?

      Effective Date is correct or not ?-Is there any Retrospective increase or decrease?

E-invoice should be made or not ? as its mandatory for the organization over 5 Crore turnover.

These all points should be covered while you are going to have your Sales Audit.

 

–> Next time will talk about our next important area of Sale Audit which is – ‘New Customer Creation’<–

 

Stay tuned for more such informative content and see the video below by – Mr. Sangeet Kumar Gupta, F.C.A and Co-founder of Finsys for further information and more clarity .

 

 

Also read about the recent event he attended by the link given below:

https://mlgassociates.in/world-forum-of-accountants