The MD’s Control Room:

How Finsys and MLG Help You Stay in Control ~ MLG Finsys MIS Reports Package

A Practical MIS Review for Business Owners

Running an MSME is not only about increasing sales. It is also about knowing.…at the right time:

– How much money has been collected today. ?
– Which customers are overdue. ?
– What is lying in the bank. ?
– Which payments are pending ?.
– Which materials are moving slowly ?.
– Whether GST and TDS obligations are ready ?.
– Whether stock, sales, purchases, and cash are moving according to plan ?.

Many business owners receive information only at month-end. By then, a delayed collection, excess inventory, missed GST invoice, wrong purchase rate, or unapproved payment may already have affected profitability.

The purpose of this MIS review is simple:

> “To give the MD ready-to-use information so that important decisions do not depend only on assumptions, telephone calls, or delayed reports.”

Come,… Let us start

Finsys provides the system visibility. MLG Associates helps interpret the information, identify risks, and guide the management team.

Together, they help create a practical **MD Control Room** for your business.

***

What You Can Expect From This Review

This is not merely a software demonstration.

During the personal meeting, our team will help you understand:

1. What information the MD should receive daily, weekly, and monthly.
2. Which reports are already available in your Finsys system.
3. Which reports require better data entry or process discipline.
4. What business risks each report can reveal.
5. Which person in your organisation should act on the information.
6. How regular review can improve cash flow, working capital, compliance, stock control, and profitability.

The objective is not to create more reports.

The objective is to create better decisions with fewer surprises.

1. Daily MD Snapshot

Daily reports are designed to give the MD a quick view of the current position.

Sales Position

The MD can review:

– Sales for today.
– Sales for the current month up to date.
– Sales for the current financial year.
– Comparison with the corresponding period of the previous year.
– Sales by customer, salesperson, product, branch, or location, wherever applicable.

Why it matters

A sales figure by itself is not enough. Management should also know whether sales are growing, whether the growth is profitable, and whether collections are keeping pace with sales.

Questions for the MD

– Are we achieving our daily and monthly sales plan?
– Which products or customers are contributing to the growth?
– Is sales growth coming with healthy margins?
– Are sales increasing while collections are slowing down?

Collection Position

The collection report may show:

– Collections received today.
– Collections received during the month.
– Collections during the financial year.
– Comparison with the previous year.
– Customer-wise collections.
– Salesperson-wise or territory-wise collection performance.

Why it matters

Profit shown in the Profit & Loss Account does not automatically mean cash has been received.

A business may show strong sales and profit but still face pressure because receivables are not collected on time.

**Questions for the MD**

– Which major customers have not paid as expected?
– Are salespeople following up for collections?
– Are customer advances properly adjusted?
– Are deductions and short payments being identified quickly?

***

Bank Ledger and Bank Position

The MD should receive a clear view of:

– Bank balances.
– Receipts and payments.
– Cheques issued but not presented.
– Cheques deposited but not cleared.
– Bank-wise position.
– Available drawing power or working capital position, where applicable.

Why it matters

A bank balance is not always the same as immediately available cash.

The business may have:

– Cheques issued but not yet presented.
– Customer cheques under clearing.
– Bank charges not recorded.
– Receipts credited in the bank but not adjusted in the books.
– Temporary funds available in one bank but shortages in another.

***

Bank Reconciliation

Bank reconciliation should help identify:

– Deposits recorded in the books but not yet credited by the bank.
– Payments recorded in the books but not yet presented.
– Bank charges and interest not entered in the books.
– Direct credits or debits appearing in the bank statement.
– Unidentified transactions.
– Old uncleared items requiring follow-up.

Why it matters

Regular reconciliation reduces the risk of:

– Duplicate payments.
– Missing receipts.
– Incorrect bank balances.
– Delayed detection of unauthorised transactions.
– Incorrect cash-flow decisions.

***

Suspense Accounts

The team should review suspense receipts and suspense payments regularly.

**The review should ask:**

– Why has the amount not been identified?
– Which customer, supplier, employee, or bank account is involved?
– Who is responsible for resolving it?
– How long has the amount remained pending?
– Is there a possibility of duplicate payment or incorrect accounting?

**MD benefit**

Suspense accounts are not merely an accounting issue. They may hide:

– Unadjusted customer receipts.
– Unidentified bank payments.
– Duplicate entries.
– Wrong ledger postings.
– Pending operational information.

***

Pending Payment Advice and Pending Bills

The MD should be able to see:

– Payments approved but not released.
– Payments awaiting approval.
– Supplier bills received but not processed.
– Bills pending because of missing purchase orders, goods receipt, quality approval, or supporting documents.

Why it matters

This helps management balance two priorities:

– Paying suppliers on time.
– Avoiding premature or duplicate payments.

***

Daily MIS Top Report

A daily executive summary may include:

– Purchase orders.
– Sales orders.
– Material receipt reports.
– Sales invoices.
– Purchase invoices.
– Collections.
– Payments.
– Pending quality checks.
– Pending accounts approvals.
– Pending GST e-invoices, wherever applicable.

**MD benefit**

Instead of asking different departments for separate updates, the MD receives one structured daily snapshot.

***

2. Weekly “Working-Capital” Review : Debtors and creditors

Weekly reports help management control money blocked in customers, suppliers, stock, advances, and pending transactions.

Customer Outstanding: 30–60–90–120–150–180 Days

The report should be reviewed:

– Customer-wise.
– Salesperson-wise.
– Branch-wise.
– Ageing-wise.
– Against approved credit limits.
– Against agreed payment terms.

**Questions for the MD**

– Which customer accounts are moving beyond agreed credit terms?
– Which salesperson has the largest overdue collection?
– Are any customers continuously purchasing without clearing old dues?
– Is the business giving credit to customers who are already overdue?

***

Bills With Short Payment

This report identifies invoices where the customer has paid less than the billed amount.

Possible reasons include:

– Rate difference.
– Quantity difference.
– Quality claim.
– Freight deduction.
– TDS deduction.
– GST-related difference.
– Unauthorised deduction.
– Bank charges.
– Commercial dispute.

Why it matters

A small deduction on hundreds of invoices can become a significant annual loss.

The objective is not always to recover every deduction. It is to identify recurring patterns and prevent avoidable leakage.

***

Customer Advances

Customer advances require regular review because:

– The invoice may not yet have been raised.
– GST treatment may require attention.
– The advance may relate to an old order.
– The order may have been cancelled.
– The amount may have been received against the wrong customer ledger.

**MD benefit**

This report helps the business convert advances into sales correctly and avoid old balances remaining unexplained.

***

Customer Dues Older Than 180 Days

Old receivables require special attention.

The review should classify them as:

– Recoverable.
– Under dispute.
– Subject to documentation issues.
– Financially stressed customer.
– Likely doubtful.
– Requiring legal or commercial action.

**Important caution**

The accounting and tax treatment of old receivables should be reviewed with the company’s tax and audit advisors based on the applicable facts. The report is a management-warning tool; it is not a substitute for a specific legal or tax opinion.

***

3. Supplier and MSME Payment Review

Supplier Outstanding: 30–60–90–120–150–180 Days

The MD should see supplier dues:

– Supplier-wise.
– Purchase-category-wise.
– Location-wise.
– Ageing-wise.
– Against agreed payment terms.
– Separately for disputed and undisputed balances.

Why it matters

Delayed supplier payments may affect:

– Supply continuity.
– Purchase rates.
– Credit terms.
– Vendor relationships.
– Production planning.
– MSME compliance considerations.

***

Advances to Vendors

Vendor advances should be matched against:

– Purchase orders.
– Material receipts.
– Invoices received.
– Quantity received.
– Quality clearance.
– Pending bills.
– Expected delivery dates.

**Risks to identify**

– Advance paid but material not received.
– Material received but invoice not received.
– Invoice received but not adjusted against advance.
– TDS or GST documentation pending.
– Old advances requiring recovery or adjustment.

***

Supplier Dues Older Than 180 Days

Long-pending supplier balances may indicate:

– Invoice disputes.
– Goods-return issues.
– Debit notes pending.
– Unrecorded settlements.
– Unclaimed balances.
– Incorrect ledger postings.

The purpose of this review is to separate genuine payable amounts from balances that require correction or settlement.

***

Supplier Dues Beyond Applicable MSME Payment Timelines

Management should identify dues that may require attention under applicable MSME payment and tax provisions.

This report should be reviewed jointly by:

– The MD.
– Purchase department.
– Accounts department.
– Finance team.
– Tax or compliance advisor.

**Why it matters**

The report helps management take action before the issue becomes:

– A supplier dispute.
– A compliance concern.
– A tax-adjustment issue.
– A cash-flow problem.
– A year-end disclosure or audit concern.

***

4. Unadjusted Receipts and Payments

Suspense Receipts and Suspense Payments

The objective is to ensure that every receipt and payment reaches the correct ledger.

**Review points**

– Is the customer or supplier identified?
– Is the amount related to an invoice?
– Is a bank narration available?
– Is there any possibility of duplicate payment?
– Has the responsible employee been assigned?
– Is the item older than the permitted resolution period?

***

On-Account Receipts

On-account receipts should be reviewed to identify:

– Customer deductions.
– Unadjusted advances.
– Invoice-wise payment allocation.
– TDS deductions.
– Short payments.
– Receipts credited to the wrong customer.

**MD benefit**

Early identification allows the company to recover genuine deductions and adjust books properly.

***

On-Account Payments

On-account payments should be reviewed for:

– Vendor advances.
– Payments awaiting bills.
– Payments pending purchase documentation.
– MSME payment review.
– GST and TDS documentation.
– Duplicate or excess payments.

**MD benefit**

This provides better control over working capital and reduces the risk of funds remaining unadjusted.

***

5. GST and Documentation Control

GST Invoices Not Recorded in the Books

This review can identify invoices that may have been received operationally but are not yet recorded in accounts.

Possible reasons:

– Invoice pending from purchase department.
– Goods received but bill not received.
– Bill pending quality approval.
– Bill pending accounts entry.
– Invoice received at another location.
– Vendor has issued an incorrect invoice.

***

GST Invoices Not Appearing on the GST Portal

The team may follow up on invoices that are:

– Recorded in the books but not reflected on the portal.
– Reflected with an incorrect GSTIN.
– Reflected with an incorrect invoice number.
– Reflected with an incorrect taxable value or tax amount.
– Pending due to vendor filing or amendment.

**Why it matters**

This helps the company monitor input-tax-credit risks and follow up with suppliers in time.

The final tax treatment should always be confirmed with the responsible tax professional based on the relevant GST provisions and records.

***

Pending GST E-Invoices

The report should identify invoices requiring attention before dispatch or reporting, wherever e-invoicing provisions apply.

**Questions for management**

– Which invoices are pending?
– Is the delay due to master-data problems?
– Is the customer GSTIN valid?
– Is the HSN or tax rate correct?
– Is the invoice blocked because of a system or process issue?
– Has material already been dispatched?

***

6. Monthly Financial Review

Profit and Loss Account With Ratio Analysis

The MD should receive more than a simple P&L.

The monthly review may include:

– Sales growth.
– Gross profit percentage.
– EBITDA.
– Net profit.
– Expense ratios.
– Contribution by product.
– Contribution by customer.
– Plant or branch profitability.
– Comparison with budget and previous year.

**Questions for the MD**

– Is profit improving because of genuine efficiency or temporary factors?
– Which expenses are increasing faster than sales?
– Which product or customer has reduced margins?
– Are freight, power, salary, finance cost, or rejection costs rising?

***

Bank Stock and Debtors Statement

Where applicable, the report may support preparation and review of bank stock and debtor statements.

The team should reconcile:

– Stock as per books.
– Stock as per physical or operational records.
– Debtors as per books.
– Eligible receivables.
– Credit notes and old receivables.
– Drawing-power calculations.

**MD benefit**

This reduces the chance of differences between internal records and information submitted to financial institutions.

***

Cash Flow or Funds Flow Report

The report should help the MD understand:

– Opening cash and bank balance.
– Expected collections.
– Expected payments.
– GST and TDS outflows.
– Salaries and statutory payments.
– Loan instalments and interest.
– Purchase commitments.
– Planned capital expenditure.
– Surplus or shortage of funds.

**The key question**

> Will the business have sufficient cash when the payment actually falls due?

Profitability and cash flow must be reviewed together.

***

GST and TDS Payment Readiness

The monthly compliance review should track:

– Tax liability.
– Available credits.
– Cash requirement.
– Pending invoice issues.
– TDS payable.
– Challan preparation.
– Filing and payment responsibility.
– Supporting reconciliations.

The dates shown in internal MIS should be treated as management targets and verified against the applicable statutory due dates for the relevant taxpayer and period.

***

Customer Credit Limit Versus Outstanding

This report compares:

– Approved credit limit.
– Current outstanding.
– Overdue amount.
– Pending sales orders.
– Customer advances.
– Security or collateral, where applicable.
– Proposed further sales.

**MD benefit**

The MD can make a conscious decision before allowing additional credit to a customer.

***

Early Payments to Suppliers

The report identifies purchases paid before the agreed due date.

Management can then ask:

– Was an early-payment discount received?
– Was early payment necessary?
– Was the payment made due to pressure from the supplier?
– Could the funds have been used elsewhere?
– Is the payment policy being followed?

***

Late Collection From Customers

This report compares customer collection with agreed payment terms.

It helps identify:

– Customers regularly paying late.
– Salespersons with weak collection follow-up.
– Orders accepted despite overdue balances.
– Customers requiring revised credit limits.
– Commercial reasons for delayed payment.

***

Staff Advances and Imprest Accounts

These accounts should be reviewed periodically for:

– Old advances.
– Missing supporting documents.
– Unadjusted travel expenses.
– Personal or non-business payments.
– Repeated advances to the same person.
– Unused balances.

**MD benefit**

Small unadjusted balances can become large control weaknesses when repeated across the organisation.

***

Directors and Related-Party Ledger Accounts

These accounts should be reviewed for:

– Debit or credit balances.
– Unadjusted personal expenses.
– Advances.
– Business expenses paid personally.
– Transactions requiring approval or disclosure.
– Balances remaining outstanding for long periods.

The review should be performed with appropriate confidentiality and in consultation with the company’s auditor or tax advisor wherever required.

***

Bank Interest and Finance Cost Review

The team can compare:

– Sanctioned interest rate.
– Applicable rate.
– Actual interest charged.
– Penal interest.
– Processing charges.
– Commitment charges.
– Other bank charges.
– Excess charges or unexplained differences.

**MD benefit**

A small difference in interest rate or bank charges can have a significant impact on a large working-capital limit.

***

7. Production and Operations Review

Slow-Moving Finished Goods

The report should identify finished goods remaining beyond the company’s normal holding period.

**Questions for management**

– Is there confirmed demand?
– Is the product still saleable?
– Is the stock packed according to current customer requirements?
– Is the selling price adequate?
– Should a special sales plan or transfer be considered?

***

Slow-Moving Raw Materials

Raw materials beyond the defined holding period should be classified as:

– Required for confirmed orders.
– Required for regular production.
– Surplus.
– Obsolete or near-obsolete.
– Transferable to another plant or product line.
– Requiring purchase-plan revision.

**MD benefit**

The aim is to release blocked working capital before it becomes a write-off.

***

Purchased Material With Rejections

The report should track:

– Supplier name.
– Purchase order.
– Material received.
– Quantity rejected.
– Reason for rejection.
– Replacement status.
– Debit note or claim status.
– Production impact.
– Financial impact.

***

Customer Returns

Returned material should be reviewed for:

– Customer.
– Invoice.
– Quantity.
– Reason for return.
– Quality issue.
– Transport damage.
– Commercial dispute.
– Replacement or credit-note action.
– Re-entry into saleable stock.

***

Material Received in Late Hours

This report can help identify receipts occurring outside normal operating hours.

Management may review:

– Whether the purchase was approved.
– Whether the receipt was genuinely urgent.
– Whether the quality check was completed.
– Whether the entry date is correct.
– Whether there is any risk of backdated or delayed documentation.

***

Material Shipped in Late Hours

The MD may review late-hour dispatches for:

– Customer urgency.
– Transport planning.
– Sales order reference.
– Invoice and e-way documentation.
– Dispatch approval.
– Freight impact.
– Repeated exceptions by location or customer.

***

Pending Sales Orders

The report should show:

– Customer.
– Order date.
– Product.
– Quantity.
– Promised delivery date.
– Available stock.
– Production status.
– Dispatch status.
– Reason for delay.

**MD benefit**

This enables management to protect customer relationships and prioritise production intelligently.

***

Approved Purchase Orders With Goods Not Received

Separate reports may be maintained for:

– Domestic purchase orders.
– Import purchase orders.

The review should show:

– Supplier.
– Order value.
– Order date.
– Expected delivery date.
– Material pending.
– Advance paid.
– Production impact.
– Revised expected date.

***

8. Stock-Related MIS

Raw-Material Closing Stock

The raw-material stock report may be valued using the company’s approved method, such as actual landed cost or FIFO, subject to the company’s accounting policy and applicable reporting requirements.

The report should show:

– Item-wise quantity.
– Location-wise quantity.
– Value.
– Ageing.
– Slow-moving quantity.
– Excess quantity.
– Stock required for confirmed orders.

***

Finished-Goods Closing Stock

Finished goods may be monitored using an approved standard-cost or other appropriate valuation approach for management reporting.

The report should distinguish between:

– Saleable stock.
– Stock reserved for customers.
– Slow-moving stock.
– Rejected stock.
– Damaged stock.
– Stock pending quality clearance.

***

Other Stock or OSP Stock

Where applicable, other stock categories should be reported separately with clear definitions and valuation logic.

**Important principle**

Every stock report should clearly state:

– Quantity basis.
– Valuation basis.
– Date of report.
– Location.
– Whether the figure is book stock, physical stock, or operational stock.
– Whether rejected or blocked stock is included.

***

Rejection Stock in the Godown

Separate reports should be maintained for:

– Vendor rejection stock.
– Customer rejection stock.

The report should include:

– Item.
– Quantity.
– Value.
– Date of rejection.
– Reason.
– Responsible party.
– Expected action.
– Disposal, replacement, return, or rework status.

***

Pending Quality-Control Stock

The report should identify material remaining in quality control beyond the defined number of days.

**Questions for the MD**

– Why is the material not released?
– Is the delay due to laboratory testing, documentation, manpower, or quality dispute?
– Is production waiting for the material?
– Is the material included incorrectly in available stock?
– Is supplier or customer communication required?

***

How the Personal Meeting Will Work

Step 1: Understand the MD’s Priorities

The Finsys and MLG team will first understand the MD’s key concerns, such as:

– Cash flow.
– Sales growth.
– Collections.
– Profitability.
– Inventory.
– Banking.
– GST compliance.
– Production delays.
– Vendor management.
– Expansion plans.

***

Step 2: Demonstrate Relevant Reports

We will not overwhelm the MD with every available report.

We will select the reports most relevant to the business and demonstrate how each one answers a practical management question.

For example:

> “Which customers are using our working capital beyond the approved credit period?”

or:

> “Do we have excess raw material in one location while another location is purchasing the same item?”

***

Step 3: Explain the Business Meaning

A report is valuable only when management understands what action it requires.

For each report, the team will explain:

– What the report shows.
– Why it matters.
– What warning signs to look for.
– Who should act.
– How quickly the matter should be resolved.
– What information must be improved for better reporting.

***

Step 4: Agree on an Action Calendar

The MD and team may agree on:

– Daily reports.
– Weekly review reports.
– Monthly management reports.
– Responsible persons.
– Review frequency.
– Escalation process.
– Data-entry requirements.
– Follow-up method.

***

Step 5: Start With a Practical Pilot

The implementation can begin with a small number of high-value reports, such as:

1. Sales and collection position.
2. Bank position and reconciliation.
3. Customer ageing.
4. Supplier ageing.
5. Cash-flow forecast.
6. Slow-moving stock.
7. Pending purchase and sales orders.
8. GST invoice reconciliation.
9. Profitability and ratio analysis.
10. Suspense and on-account balances.

Once the MD sees the value, additional reports can be added systematically.

***

What the Client Team Must Do

Finsys and MLG can guide, configure, review, and follow up. However, accurate MIS depends on timely and correct data entry.

The client team remains responsible for:

– Entering transactions correctly.
– Creating accurate customer, supplier, item, and GST masters.
– Recording receipts and payments promptly.
– Completing purchase and sales documentation.
– Recording material receipts and dispatches.
– Completing quality and stock confirmations.
– Sharing bank statements and supporting documents.
– Assigning responsible persons for pending items.
– Providing explanations for exceptions.

> **Correct data in the system creates reliable management information.**

***

What Finsys Will Contribute

Finsys helps provide the technology platform for:

– Integrated accounting.
– Sales and purchase workflows.
– Inventory and stock visibility.
– Order tracking.
– Bank and receivable information.
– Multi-location reporting, where configured.
– Automated MIS generation.
– User-wise process discipline.
– Dashboards and management reports.

The exact reports and automation available will depend on the client’s Finsys modules, configuration, transaction discipline, and agreed scope.

***

What MLG Associates Will Contribute

MLG Associates can help the client with:

– MIS interpretation.
– Accounting and control review.
– GST and TDS follow-up.
– Receivable and payable ageing review.
– Working-capital guidance.
– Ratio and profitability analysis.
– Suspense and ledger scrutiny.
– Monthly management discussions.
– Identification of reporting gaps.
– Guidance for corrective action.

The objective is not merely to point out mistakes.

The objective is to help management understand the issue, decide the action, and monitor closure.

***

The MD’s Expected Outcome

After adopting this approach, the MD should gradually gain better visibility over:

– Daily sales.
– Daily collections.
– Cash and bank position.
– Customer and supplier exposure.
– Pending approvals.
– Stock ageing.
– Production and dispatch commitments.
– GST and TDS readiness.
– Profitability and expenses.
– Cash-flow requirements.
– Operational exceptions.

The desired outcome is:

> **Less dependence on informal updates. More control through timely, organised information.**

***

A Simple Monthly MD Meeting Agenda

1. Business Performance

– Sales versus target.
– Sales versus previous year.
– Collection versus sales.
– Gross profit and EBITDA.
– Key product and customer performance.

***

2. Cash and Working Capital

– Bank position.
– Expected collections.
– Payments due.
– Customer ageing.
– Supplier ageing.
– Advances and on-account balances.

***

3. Stock and Operations

– Raw-material ageing.
– Finished-goods ageing.
– Rejections.
– Pending quality stock.
– Pending sales orders.
– Pending purchase orders.

***

4. Compliance and Control

– GST status.
– TDS status.
– Unrecorded or unmatched invoices.
– Suspense accounts.
– Bank reconciliation.
– Related-party and director balances.

***

5. Action Plan

– Issue.
– Responsible person.
– Required action.
– Due date.
– Status at the next meeting.

***

Questions the MD Should Ask Every Month

1. What is our current cash position?
2. How much collection is expected in the next 15 and 30 days?
3. Which customers are overdue beyond agreed terms?
4. Which suppliers are awaiting payment?
5. Are any MSME-related payment matters pending review?
6. What stock is moving slowly?
7. Can any excess material be used or transferred elsewhere?
8. Which purchase orders are pending receipt?
9. Which sales orders are delayed?
10. Are any customer or vendor advances old and unadjusted?
11. Are there any invoices in the books but not reflected on the GST portal?
12. Are there any GST e-invoices pending?
13. Which expenses have increased unusually?
14. Is the bank charging the agreed interest and fees?
15. Which suspense accounts are still unresolved?
16. Are any director or related-party balances outstanding?
17. What is our expected tax and statutory cash requirement?
18. Which product, customer, branch, or plant has reduced profitability?
19. Which issue requires immediate MD intervention?
20. What are the five actions to be closed before the next review?

***

Why This Is Valuable for an MSME

An MSME MD often remains involved in:

– Sales.
– Purchases.
– Banking.
– Production.
– Customer relationships.
– Staff matters.
– Compliance.
– Collections.
– Expansion.

The challenge is not lack of hard work.

The challenge is that important information is often:

– Spread across departments.
– Available only in separate files.
– Delayed until month-end.
– Not compared with targets.
– Not assigned to a responsible person.
– Not converted into an action plan.

A structured MIS review helps the MD move from:

> “Please find out what happened.”

to:

> “I know what is happening, why it is happening, and what action is required.”

***

Finsys + MLG: A Practical Partnership for Better Control

Finsys brings the system.

– Structured transaction data.
– Integrated workflows.
– Operational visibility.
– Reports and dashboards.
– Automation opportunities.
– Multi-department information flow.

MLG brings the guidance.

– Financial interpretation.
– Compliance perspective.
– Risk identification.
– Management discussion.
– Follow-up discipline.
– Corrective-action guidance.

The client brings the business knowledge.

– Correct operational information.
– Timely approvals.
– Accurate data entry.
– Departmental cooperation.
– Ownership of action points.

Together, these three elements create a stronger management system.

***

This Is Not Just Reporting

A report is useful only when it leads to a better decision.

The purpose of this programme is to help the MD:

– Protect cash.
– Improve collections.
– Reduce excess stock.
– Avoid preventable compliance issues.
– Control expenses.
– Improve supplier negotiations.
– Detect operational delays.
– Strengthen internal controls.
– Understand profitability.
– Build a more scalable organisation.

In simple words:

> **We do not want to give you more paperwork. We want to give you more control.**

***

Begin With Your Top Five Questions

Before the meeting, the MD may identify the five questions that matter most today.

For example:

– Where is my money blocked?
– Which customer is delaying payment?
– Which stock is becoming slow-moving?
– Which purchase is costing more than necessary?
– What compliance or banking issue needs immediate attention?

The Finsys and MLG team will then demonstrate how the relevant information can be organised, reviewed, and followed up.

***

Schedule Your Management Information Review

If your business has grown beyond informal registers, scattered spreadsheets, and delayed monthly information, it may be time to create a structured MD reporting system.

A personal review with the Finsys and MLG team can help you:

– Understand the current information flow.
– Identify important reporting gaps.
– Select the most relevant MIS reports.
– Define daily, weekly, and monthly reviews.
– Improve accountability across departments.
– Build a practical management-control routine.

The objective is simple:

> **To help the MD remain informed, confident, and in control—without having to personally chase every department for every answer.**

Finsys

Integrated ERP and business-process visibility for growing organisations.

MLG Associates

Accounting, tax, compliance, MIS review, and business guidance for management.

**To arrange a personal MIS review, speak with the Finsys and MLG team.**

***

*Note: Report names, frequency, calculations, and statutory review dates should be customised to the client’s business, ERP configuration, transaction discipline, applicable law, and professional advice. The client team is responsible for timely and accurate data entry in non-accounts modules.*

***

so that your Mission is Accomplished

A nicely Curated Bouquet… of some of the MIS Reports.. that the Finsys brings to you Daily.. Weekly.. and Monthly… .. Yes, this works.

Religious events allowed in CSR ?

Short answer:

Purely religious events (puja, satsang, pravachan, yatra, etc.) are not treated as eligible CSR activities in India;

However, CSR support can be given to secular, public‑benefit projects even if implemented by faith‑based organisations, provided they fall strictly under Schedule VII and are clearly ring‑fenced from religious worship or proselytisation.[ see source : business-standard]

What is allowed

Under Section 135 of the Companies Act and Schedule VII, CSR must relate to specified areas like education, health, livelihood, environment, heritage, rural development, disaster relief, etc., and must be for public benefit. If a religious/faith‑based organisation runs a project in these areas (e.g. free school, hospital, skill centre, old‑age home) and accounts are kept separate from religious activity, CSR funding to that project is permissible.

The key point is that the activity funded must be secular, inclusive and available to the public, not restricted to followers of one religion.[ see source :  khaitanco]

Picture shows an Eye Camp at a Temple. Allowed – Yes

Picture shows an Cataract Operations Eye Camp at a Temple. Allowed – Yes

Example: Funding a free eye‑camp organised in a temple premises but open to all communities, with separate CSR documentation and reporting, is generally acceptable; funding the temple’s daily aarti or renovation as a place of worship is not.[See Related Source : linkedin]

What is not allowed

Several policies and clarifications explicitly state that activities “concerned with religion like construction of temple/mosque etc.” are not to be treated as CSR.

Donations for religious rituals, spiritual discourses, propagation of a particular faith, or renovation/expansion of places used mainly for worship do not qualify as CSR spend.

One‑time events like religious festivals, processions, or devotional concerts also do not meet CSR criteria, especially where they are primarily for brand visibility or community goodwill rather than Schedule VII objectives.[ See Related Source : itdc.co]

Grey areas and practical structuring

Faith‑linked events with a strong social component (health camp during a religious mela, disaster‑relief distribution through a gurudwara, mid‑day meals at a religious school) may be structured as CSR if: the CSR spend is strictly on the social component, the event is open to all without religious conditions, and documentation clearly shows outcomes in permitted Schedule VII categories. In practice, many companies adopt internal CSR policies that outright abstain from any activity with religious overtones to avoid regulatory and reputational risk, even if technically arguable.[See Related Source : itdc.co]

Suggested approach for your companies

For any business group, a safe approach is to treat “religious events” as non‑CSR and instead design secular programmes that may be operationally anchored at community or faith‑based locations but are clearly documented as health, education, livelihood, environment or heritage activities under Schedule VII.

Ensure separate bank accounts, ledgers and communication for CSR projects, and avoid photographs, reports or publicity that emphasise worship rather than social impact.[taxguru]

To advise clients or structure your own CSR, it will help if you share the type of religious event you have in mind (e.g. temple renovation, health camp during navratri, langar, etc.).

A Ramleela event is not automatically eligible for CSR; it depends on how it is structured and what the real objective is.

 

Legal framework to keep in mind

• CSR spending must be on activities that fall within Schedule VII of the Companies Act, interpreted liberally but still tied to the listed social, educational, cultural, and developmental purposes.[iitbbs.ac]

• Certain things are specifically excluded from CSR: sponsorships done mainly for marketing/brand promotion, one‑off events, activities benefitting only employees, and general entertainment events.[iitbbs.ac]

When a Ramleela could qualify

A Ramleela event might be considered CSR‑eligible if, for example:

• It is part of a structured project aimed at preservation of art and culture, promotion of education/values, or rural/urban community development, and can be reasonably mapped to relevant Schedule VII items (e.g. promotion of education, art, culture, or community development).[iitbbs.ac]

• It is run through an eligible implementing agency (Section 8 company / registered trust / society with 12A, 80G and 3‑year track record), and the CSR policy and board resolution clearly position it as a community‑development or cultural‑preservation programme rather than pure entertainment or brand promotion.[indialawoffices]

When a Ramleela would not qualify

Typically it will not be treated as CSR if:

• The company is mainly sponsoring the event for visibility (banners, stalls, product promotion, logo display etc.), i.e. a sponsorship activity for deriving marketing benefits. That is expressly excluded from CSR.[iitbbs.ac]

• It is a one‑off festive celebration with no defined CSR project outcomes, no linkage to Schedule VII objectives, and no proper documentation of need, beneficiaries, and impact.[iitbbs.ac]

• The event is primarily for employees and their families (internal cultural function), not for the public at large.[thecsruniverse]

So, a Practical approach for you

• Check whether the Ramleela organiser is an eligible CSR implementing entity (Section 8 / trust / society with 12A, 80G and 3‑year track record).[indialawoffices]

• Map the proposed activities to specific Schedule VII heads (e.g. promotion of art and culture, education, rural development) and have a proper project document: objectives, target beneficiaries, budget, outputs/outcomes.[iitbbs.ac]

• Ensure that the company’s branding/sponsorship element is incidental; if the main purpose is promotion/marketing, keep it out of CSR and treat it as normal advertisement/sponsorship expense.[iitbbs.ac]

 

Draft Request Letter for CSR Support for Ramleela Event

On the letterhead of the Ramleela Committee / Organising Trust / Society

Date:

To,
The Board of Directors / CSR Committee
[Name of Company]
[Address]

Subject: Request for CSR support of Rs. 10,000 for Ramleela programme under Schedule VII of the Companies Act, 2013

Respected Sir/Madam,

This is to submit that [Name of Ramleela Committee / Trust / Society] is organising the annual Ramleela programme at [venue] from [dates] for the benefit of the local community, with the objective of promoting and preserving traditional Indian performing arts, cultural heritage, and value-based public education. Schedule VII to the Companies Act, 2013 includes “protection of national heritage, art and culture” and also the “promotion and development of traditional arts and handicrafts” as eligible CSR activities.

The Ministry of Corporate Affairs has also clarified through General Circular No. 21/2014 that the entries in Schedule VII should be interpreted liberally so as to capture the essence of the subjects enumerated in the Schedule

In this background, support extended for a community-based Ramleela programme, where the principal purpose is preservation and promotion of traditional art and culture, may be considered under Schedule VII, item (v), namely “protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts”. upload.

The proposed programme is intended as a cultural and community initiative and not as an advertising or sponsorship activity for deriving marketing benefit. MCA guidance and CSR compliance materials also state that sponsorship-based activities undertaken for marketing benefit do not qualify as CSR expenditure.

Accordingly, a request is made to your good company to extend CSR financial support of Rs. 10,000 for the said Ramleela event / cultural programme. The contribution will be utilised towards expenses such as stage arrangements, costumes, sound, lighting, artist support, and other programme-related costs connected with the conduct of the cultural event.

The organising committee will provide the following documents for your CSR and accounting records:

• Copy of registration certificate of the committee / trust / society.

• PAN of the organisation.

• 12A / 80G registration, if applicable.

• Bank details and cancelled cheque.

• Brief note on the programme and expected beneficiaries.

• Utilisation confirmation / receipt after the event.

It is requested that the above support of Rs. 10,000 be kindly considered and approved.

Thanking you,

Yours faithfully,

For [Name of Ramleela Committee / Trust / Society]

Authorised Signatory
Name:
Designation:
Mobile:
Email:

Important note for use ( MLG Associates. message )

This draft is strongest where the Ramleela is positioned as a genuine cultural-preservation/community programme under Schedule VII item (v).

Please remember, If the company is shown as a sponsor for publicity, the amount may be questioned as non-CSR because sponsorships for marketing benefit are excluded.

Do you know, that Cost Audit is Mandatory for Auto Component Manufacturers

if Turnover Exceeds Rs 100 Crores

Auto component manufacturers in India often focus on production efficiency, OEM schedules, supply chain stability, GST, working capital, and pricing discipline. Yet one important compliance area is still misunderstood in many manufacturing businesses: whether maintenance of cost records and cost audit are mandatory under Section 148 of the Companies Act, 2013.

For businesses engaged in the manufacture of auto parts and automotive components, the issue becomes especially relevant where products fall within the notified sectors covered by the Companies (Cost Records and Audit) Rules, 2014. Various professional references discussing automotive components and Chapter 87 indicate that this sector can be covered for cost audit applicability, subject to the prescribed turnover criteria and the exact product classification.

In practical terms, the broad compliance position for a non-regulated sector company is this: if the company is covered under Rule 3, and its overall annual turnover from all products and services is Rs 100 crore or more, and the aggregate turnover of the specific product or products for which cost records are required to be maintained is Rs 35 crore or more during the immediately preceding financial year, cost audit becomes mandatory.

This is why many auto component manufacturers cannot evaluate applicability only by looking at one HSN code in isolation. The correct approach is to examine the nature of the goods, the notified product coverage, the sector classification under the Rules, the immediately preceding year turnover, and whether any exemption is available.

Why auto component manufacturers need to pay attention

The automotive supply chain is deep and diverse. It includes manufacturers of parts, assemblies, precision components, fabrication items, electrical components, chassis-linked parts, body-related items, and many other products supplied to OEMs, tier-1 vendors, exporters, and replacement markets. When such products fall within the classes of goods covered under the cost records framework, the company may be required first to maintain cost records and then, if turnover thresholds are crossed, to get those records audited.

This distinction is very important. Cost records and cost audit are connected, but they are not identical. A company may be required to maintain cost records once the Rule 3 threshold conditions are met, while cost audit under Rule 4 applies only when the higher turnover thresholds are also satisfied.

For manufacturers in the auto component segment, this means compliance should begin well before the year-end audit stage. Once the company enters the threshold zone, management should ensure that product-wise cost data, material consumption, utilities, labour, overhead absorption, captive consumption, inter-unit transfers, inventory valuation logic, and reconciliation with financial books are all properly documented.

Legal basis of mandatory cost audit

Section 148 of the Companies Act, 2013 empowers the Central Government to require specified classes of companies to maintain cost records and, where applicable, to conduct cost audit. The operational framework is laid down in the Companies (Cost Records and Audit) Rules, 2014.

Professional summaries of Rule 4 explain that cost audit applies where the company falls under the notified Table A or Table B categories and satisfies the relevant turnover thresholds. For companies in non-regulated sectors, the key threshold is overall annual turnover of Rs 100 crore or more, together with aggregate turnover of Rs 35 crore or more for the individual product or service for which cost records are required.

This is the basis for the statement that cost audit is mandatory for an auto component manufacturer when turnover exceeds Rs 100 crore, but with one important qualification: the business must also be engaged in a covered product category and satisfy the product-level turnover threshold. Saying only “above Rs 100 crore” is directionally useful for business communication, but the precise legal test includes both overall turnover and covered product turnover.

Relevance of Chapter 87 and automotive components

A number of industry and professional references discussing cost audit applicability specifically mention motor vehicles and automotive components in connection with Chapter 84, 85 and 87. These references indicate that automotive components have historically been discussed within the cost audit coverage framework, although present-day applicability should always be cross-checked with the current Rules, amendments, and exact product classification.

This matters because many manufacturers assume that only vehicle assemblers or very large OEMs are exposed to cost audit. That assumption is risky. In reality, component manufacturers can also come within the compliance net where their products fall under the notified coverage and their turnover crosses the prescribed thresholds.

Therefore, any company manufacturing auto parts, sub-assemblies, precision items, fabricated components, or allied automotive products should perform a structured applicability review rather than relying on assumptions based on industry practice.

Thresholds every manufacturer should know

For cost records, the general trigger under Rule 3 is overall turnover of Rs 35 crore or more in the immediately preceding financial year for companies engaged in covered goods or services. This means the obligation to maintain cost records can arise much earlier than the stage at which cost audit becomes mandatory.

For cost audit under Rule 4, the thresholds differ by sector. In Table A sectors, the threshold is overall turnover of Rs 50 crore or more and product/service turnover of Rs 25 crore or more. In Table B sectors, the threshold is overall turnover of Rs 100 crore or more and product/service turnover of Rs 35 crore or more.

As a result, an auto component manufacturer with overall turnover above Rs 100 crore should not stop at the headline figure alone. Management must also check whether the turnover of the covered auto component line is at least Rs 35 crore and whether the company falls within the applicable notified category.

Important exemptions

Even where a company is covered under Rule 3, the requirement for cost audit may not apply in certain cases. Professional explanations of the Rules note exemptions where export revenue in foreign exchange exceeds 75 percent of total revenue, or where the company operates from a Special Economic Zone.

These exemptions are important for auto component manufacturers with large export exposure. However, the exemption should be evaluated carefully on facts and documented properly, because a mistaken assumption can create avoidable compliance risk for directors and management

Common compliance mistakes

One common mistake is checking only company turnover and ignoring the turnover of the specific covered product line. Another is assuming that ERP data automatically meets cost record requirements, even when cost sheets, reconciliation notes, utility allocation logic, and quantitative records are incomplete.

A third mistake is waiting until the end of the year to assess applicability. Since cost audit depends on proper maintenance of records through the year, delayed action often leads to weak data trails, reconciliation gaps, and unnecessary stress during audit and reporting.

How MLG Associates can help

At MLG Associates, we help manufacturing businesses evaluate whether cost records and cost audit provisions apply based on the nature of products, turnover profile, and sector classification. We also support businesses in reviewing product mapping, compliance readiness, documentation standards, and practical coordination between finance, costing, production, and ERP teams.

For auto component manufacturers, an early applicability review can prevent both over-compliance and under-compliance. The right review identifies whether the business falls within the notified framework, whether thresholds are crossed, what records must be maintained, and what actions are required for timely compliance.

A careful compliance review is particularly valuable for companies scaling beyond Rs 100 crore turnover, diversifying product lines, supplying to OEMs, or expanding exports. In all such cases, the cost audit question should be examined proactively rather than after receipt of a notice or during statutory reporting.

Applicability of Cost Audit – Motor Vehicles (including Automotive Components) Industry

• Cost Audit is applicable to:
  • Companies engaged in manufacturing, production or processing of goods or services.
  • Both Private Limited & Public Limited Companies are covered.

• These Companies are covered under Cost Audit if any of the following criteria is fulfilled:
  • Company Listed on Stock Exchange, or
  • Turnover of the company exceeds Rs. 100 crores

• Cost Audit is mandatory for the financial year 2012-13 and onwards.

(If a company is covered once on the basis of above criteria, the Cost Audit will remain mandatory even if turnover of the company is reduced in the subsequent years)

• Companies whose Cost Audit Orders were issued on case to case basis as per earlier Rules, shall continue to be covered under Cost Audit whether they fulfill the above criteria or not.

• Relevant Chapter Heading of the Central Excise Tariff Act, 1985 in respect of Motor Vehicles (including Automotive Components Industry

Chapter 84, 85 & 87

Cost Accounting Records:

• Cost Accounting Records are to be maintained as per The Companies (Cost Accounting Records) Rules, 2011, and
• Cost Accounting Standards issued by the Institute of Cost Accountants of India.

(Presently CAS 1-18 have been issued)

• Cost Accounting Records are required to be maintained for atleast 8 financial years.

Cost Audit Report:

• It is to be prepared on the basis of Cost Audit Report Rules, 2011

Submission of Cost Audit Report:

• It is to be submitted online to Ministry of Corporate Affairs.
• If Company is following April to March financial year, then the Cost Audit Report for the Financial year 2013-14 is required to be submitted by 27^th September, 2014 (i.e., 180 days from the close of financial year)

Source : https://costaccountant.in/applicability-of-cost-audit-to-auto-auto-components/

#tags : Cost Audit, Auto Components, Auto Component Manufacturers, Section 148, Companies Act 2013, Cost Records, CRA-1, CRA-2, CRA-4, Chapter 87, Turnover 100 Crores, Manufacturing Compliance, Cost Accountant, MCA Compliance, Cost Audit Applicability, MLG Associates

Tax ALERT

 

This is normal yearly Quarterly SoP. Nothing new. But sending this reminder only for “ready” reference.

We all know that we must pay advance tax before the financial year ends in 4 instalments: 15th June, 15th September, 15th December and 15th March.

This is not applicable if your Tax due is nil, of Tax due is less than the TDS already deducted by your customers etc.

Points to remember

1. Estimated ? Yes.  make your best estimate .
2. How much ? This is 15% of the Annual Tax payable by 15th June for FY 2026-27
3. This is not applicable if your Tax due is nil, (example due to any loss )
4. Similarly, if your Tax due is less than the TDS already deducted by your customers etc. then, again Advance tax is not required
5. What will happen if you don’t pay in time ? Govt will charge a bit of interest… this is approx 1% p.a. ( for a block of 3 months, in 1 go)
6. How to pay ? Online only
7. Site name = either your Bank account will have a link, or Official sites are : https://incometaxindia.gov.in/ and https://incometaxindia.gov.in/Pages/tax-services/pay-tax-online.aspx

Benefits of Paying Advance Tax
1. Avoidance of interest and penalty charges
2. Better cash flow management
3. Avoidance of last-minute rush and stress
4. Avoidance of default notice by the tax department

SO
PLS AVOID LAST DATE. and pay in time, as per normal annual SOP.