Revenue Maximization – Role of CFO

Revenue Maximization is a major component of Sustainable Profit Growth Framework (SPGF).  Generating Sales is  primary responsibility of Sales & Marketing Heads , however Finance Heads , as a part of Corporate Management has also to play an important part in this. Finance function arranges funds from Banks and Institutions on basis of some Revenue Projections. Hence Finance Head is an important stakeholder in ensuring that Revenue is Maximized.

Revenue Maximization involves following steps :

  1. Realistic Sales Plans : It is observed that Sales Plans are made with optimistic mindset. This is the reason that most of the times Sales Targets are not met. Finance Head should ensure from an independent view that Sales Plans are based on ground realities.
  • Alignment with Production and Supply Chain : Finance Head as a key part of Annual Budget Team has to see that Sales Plan is properly aligned with Production , Manpower and Material availability.
  • Funds Availability : Finance has to ensure that sufficient funds are available for Long Term and Short Term Capital .
  • Control over Discounts, Credits and Price Cuts : Finance Head has to ensure that there is adequate due diligence given to discount and price cuts policy advocated by marketing department.
  • Achievement of Targets :  Finance function has to keep watch on Achievement  of Revenue Targets set for Month and Quarter. Any shortfall on targets has to be escalated by Finance to Top Management.

Implementation Steps :

Key Implementation Steps :

1. Development of Sales & Revenue Plan

2. Production & Resources Alignment Plan

3. Development of Discounts & Rebates Policy

4. Monthly Sales MIS

5. Integration with ERP

Strategic Production MIS

Developing Strategic Production MIS Framework
Developing Strategic Production MIS Framework

Production Management deals with entire gamut of operational controls at the level of production. It involves a complex coordination of production resources like machines, manpower, material, sales orders, maintenance , quality routine etc. This also requires coordination with funds managers, vendors and dealers. Production Management function is part of wider Factory Management function and also includes Quality , Engineering and Maintenance function. The key MIS reports which should be generated as part of Production MIS are as below :

  • Capacity Utilization Report : This report analyzes Capacity Utilization of different machines and production system as a whole. Reasons for variance are analyzed.
  • New Technology Report : This report analyzes New Technology which have come in market – local as well as global. This report also lists Technologies which are in trial stage and likely to come in future. Cost – Benefit analysis is done for all new technologies and decision if any to be taken for introduction.
  • Plant Performance Report : This report reviews performance of plant as it stands in present. Future revenues and costs are estimated. This is compared with Gains from replacement of new equipment.
  • Process Improvement Report : This report compares Standard and Actuals performance in terms of Time spent and Cost incurred in different processes and sub processes.
  • Production Planning & Control MIS : This report analyzes gaps in resource availability in terms of man, machine and material for a specific Production Plan.
  • Production Bottlenecks Report : This report analyzes Production Bottlenecks in terms of man, machine, material, utilities and others issues. Reasons of same are analyzed and action decided.
  • Standards Review MIS : This report reviews standards of Machine Hours, Labor Hours, Material Consumption Rate, Consumables Consumption Rate, Power Consumption etc. Present standards are compared with national and global standards. Target Improvements are listed and action decided upon.
  • Shop Floor Rejections Report : This report analyzes Shop Floor Rejections in different processes. Cost of such rejections are estimated. Reasons are analyzed and actions decided upon.
  • Production Loss Report – Reason Wise: This report analyzes Reasons of Production Losses. Frequency of reasons are analyzed and corrective actions taken.
  • Machine Productivity Report : This report analyzed productivity of machines in terms of hours run as well as production units per hour. Comparison is made between standard and actuals.
  • Power Losses MIS : This report analyzes power utilization and compares with standards.
  • Boiler Efficiency Report : This report analyzes efficiency of Boiler in terms of cost per unit of steam.
  • Generator Efficiency Report : This report analyzes efficiency of generator in terms of cost per unit of power generated.
  • Machine Hour Rate MIS : This reports computes Machine Hour Rates for a period and compares with Standards. This report is also useful for Job and Process Costing purposes.
  • Labour Hour Rate MIS : This report computes Cost of Labour per hour and compares with Standards.
  • Process Costing MIS: This report analyzes Standard and Actuals costing of different processes in terms of material, machining, labor, power and overheads
  • Job Costing MIS : This report analyzes Standard and Actuals costing of different jobs in terms of material, machining, labor, power and overheads.
  • Safety Management MIS : This report lists compliance of safety measures in different segments. Levels of compliance are indicated. Reasons of noncompliance are analyzed and corrective actions decided upon.
  • Accident Control MIS : This report analyzes incidents of accidents, their frequency & costs. Reasons of same should be analyzes and corrective actions taken.
  • Maintenance Analysis MIS: This report analyzes Preventive & Breakdown Maintenance incidents.
  • Maintenance Efficiency Reports : This report compares actual hours spent on maintenance jobs with standard hours for same.
  • Maintenance Effectiveness Report : This report indicates effectiveness of maintenance in terms of saving in lost production time. The purpose of maintenance is to prevent loss in production time due to breakdown of equipment.
  • Production Loss Report – Incident Wise : This report analyzes incidents of Production Losses. Reasons are analyzed and corrective actions taken.
  • Maintenance Man Power Report : This report indicates utilization of maintenance man power. Comparison can be made over a period of time. This shall indicate any underutilization & can help to avoid wide fluctuations by shifting peak man hour time slot to those with less load time slots.
  • Repairs MIS : This report lists incidents of Repair of equipment. It analyzes frequency, reasons and costs involved.
  • Rework Cost MIS : This report analyzes Cost of Rework of rejected material. This shall help to decide whether rejections needed to be reworked or sold as scrap.
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Strategic Finance & Accounts MIS

Developing Dynamic Financial & Accounting MIS Framework

Finance is core to any business organization. Its involvement starts with arrangement of Funds to start the business and continues till its closure. Any Financial MIS framework should originate from  Key Functions of Finance which are as follows :

Strategic Finance

  • Investment Evaluation – Utilization of Capital in right projects.
  • Finance Arrangement for Long Term Assets & Working Capital Finance.
  • Risk Management – Managing Risk in business and environment.
  • Stakeholder Communication – Shareholders, Bankers, Investors.
  • Financial Value Creation – Maximization of Business Valuation

Accounting & Statutory

  • Accounting of Transactions of business.
  • Statutory & Taxation compliances

Financial Efficiency

  • Profit Maximization from operations. – Revenue Maximization and Cost Minimization.
  • Financial Hygiene – Fraud & Mistakes Prevention.
  • Treasury Management

Keeping above functions in mind, following Financial MIS Reports can be generated :

Investment Efficiency MIS

Every business starts with introduction of financial capital. This capital could also have been invested in alternate investment opportunities. Apart from own Capital every business also arranges for loans from different sources. This Loan has to be repaid by promoters irrespective of profitability of business. Hence it is desirable that MIS should be generated to check returns and health of financial capital deployed in business. Following MIS may be generated to this effect.

  • Finance Macro Environment Report
  • Financial Value Creation Report
  • Investment Efficiency Report – Liabilities Based
  • Investment Efficiency Report – Assets Based
  • Investment Efficiency Report – Future Incomes
  • Investment Entry Report
  • Investment Exit Report
  • Credit Rating Report

Capital Expenditure MIS

Capital Expenditure Control is a vital element of Financial Management functions. Capital Expenditure generally involves large sum of expenditure. Further capital expenditure has a long term impact on profitability of company. Hence its finds an important place in Financial Management MIS. Some of key capital expenditure and assets related reports are as follows:

  • Capital Expenditure Analysis
  • Assets Disposed Off Report
  • List of Assets Not Authorized for Acquisition /Disposal
  • Fixed Assets Verification Analysis
  • List of Assets Pending Disposal
  • Reconciliation between Fixed Assets Register and Nominal Ledger

Project Progress MIS

Project MIS is a combination of Technical and Financial aspects of management. Every project has multiple components of cost and funding. It is essential that all these components progress as per schedule. This shall ensure that project is completed in time which in turn shall save Time & Cost Over runs. From Finance Angle two types of reports should be generated:

  • Project Progress Report: Expenditure Incurred
  • Project Progress Report: Means of Finance

Risk Management MIS

  • Risk Management MIS
  • Risk Coverage MIS
  • Insurance Adequacy Analysis: Market Value:
  • Premium Paid Analysis
  • Pending Claims Analysis
  • Exchange Fluctuation MIS

Regulatory MIS

Management of regulatory matters covered under different acts such as Income Tax, GST, Company Law, SEBI, RBI etc. are handled by Finance department in most organizations. A proper M.I.S shall help the Finance Manager to keep tab on all important aspects of this area of his responsibility. He should develop checks & systems to come to know about any deficiency in time and take necessary action. Broadly M.I.S for Taxation Compliances has to be patterned around following reports:

  • Statutory Laws Compliance Report
  • Statutory Laws Deficiency Report
  • Statutory Returns Compliance Report
  • Statutory Penalties Report
  • Forms Not Received

Financial Records MIS

  • Financial Records MIS
  • Accounts Master MIS
  • Reconciliation MIS
  • Debit Balance Confirmation MIS

Financial Analysis & Cost Management

  • Balance Sheet Analysis:
  • Profitability Analysis: Total Cost approach:
  • Profitability Analysis: Marginal Cost Approach:
  • Cash Flow Analysis:
  • Cost Minimization MIS:

Working Capital MIS

  • Working Capital Analysis
  • Debtors Analysis
  • Legal Debtors Analysis
  • Creditors Analysis
  • Vendor Advances MIS

Funds Management MIS

Deposit Float Report:

Payment Float Analysis

Bank Movement Plan:

Idle Funds Analysis:

Employee Accounts Analysis


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Strategic Sales & Marketing MIS

Developing dynamic Sales & Marketing MIS Framework
Developing Strategic Sales & Marketing MIS

Sales & Marketing is a critical function essential to achieve objectives of organization An effective Sales & Marketing function is vital to success of an organization.

MIS is system to ensure that goals to business are achieved in acceptable quality and cost norms. Strategic MIS ensures that activities of business are aligned to core Strategy of organization. SMIS helps in identifying the bottlenecks of business which prevent achievement of goals. It also helps to judge effectiveness of Strategy adopted and to make changes if required.

Developing a Strategic Information System involves following steps :

a)        Goal Setting : Goals Of Organization at Macro & Micro Level.

b)        Bottleneck Identification : Identifying bottlenecks which prevent achievement of goals.

c)         Identifying Information required to help achieve goals and solve bottlenecks.

d)        Identifying Inputs required to compile this information

e)        Designing Formats to collect these information

f)         Assigning responsibility to collect and compile this information

g)        Analyzing the information received and applying to decision making.

h)        Evaluation and Audit of Information System.

SMIS for Sales & Marketing Function :

Strategic MIS for Sales & Marketing function primarily measures synergy between Marketing and Core Strategic Objectives of organization. Marketing MIS starts from Demand Projection and extends to Marketing function performance from different parameters such as Sales Target Achievement, Sales Profitability, Sales Promotion Efficiency, Receivables Management etc.  Key Sales & Marketing MIS reports which should be generated in every organization are indicated below :

A. Strategic Marketing MIS

  1. Macro Environment Analysis – Marketing MIS
  2. Competition Intelligence MIS
  3. Market Needs Analysis
  4. Sales & Marketing Objectives MIS
  5. Product Life Cycle MIS
  6. Market Segmentation MIS
  7. Brand Management MIS
  8. Market Size Report

B. Customer Relationship MIS

  1. Customer Orientation MIS
  2. Customer Grievances MIS – Detailed
  3. Customer Grievances MIS – Summary
  4. Customer Grievance Frequency Report

C. Sales Price MIS

  1. Product Pricing Report
  2. Sales Price Revisions MIS
  3. Sales Price Verifications MIS
  4. Price Verification Frequency
  5. Price Composition Trend Analysis
  6. Price Discount Efficiency MIS
  7. Foreign Exchange Fluctuation Impact MIS

D. Market Communication MIS

  1. Call Centre Effectiveness MIS
  2. Public Relations Effectiveness MIS
  3. Advertising Marketing Efficiency MIS
  4. Mobile SMS Marketing Efficiency MIS
  5. Email Marketing Efficiency MIS

E. Sales Revenue MIS

  1. Revenue Maximization MIS
  2. Sales Analysis Report :
  3. New Market Sales MIS
  4. New Product Sales MIS
  5. Channel Sales / Performance Report
  6. Tender Sales MIS
  7. Sales Loss Analysis MIS
  8. Product Despatch Loss Analysis
  9. Pending Disputed Sales Report
  10. Sales Return Notes Not Prepared MIS

F. Sales Order MIS

  1. Sales Order Report
  2. Pending Sales Order MIS
  3. New Sales Order MIS
  4. Orders Cancelled MIS
  5. Customer Order Rejections MIS

G. Sales Expenses MIS

  1. Selling & Distribution Overheads MIS
  2. Sales Expenses Reduction MIS
  3. Freight Cost Analysis
  4. Demurrage Cost
  5. Brokerage / Discount Control MIS

H. Sales Process MIS

  1. Sales Order Issue Time MIS
  2. Sales Order to Despatch MIS
  3. Time Taken from Despatch to Payment Report
  4. Emergency Sales MIS
  5. Sales Authorization MIS
  6. Sales  Function Automation MIS
  7. Sales Records Management MIS
  8. Sales Process Time & Cost Standards MIS
  1. Debtors Management
  1. Customer Credit Worthiness MIS
  2. Receivable Analysis MIS
  3. Legal Debtors MIS
  4. Customer Advances Analysis MIS
  5. Customer Balance Confirmation MIS

J. Sales Team MIS

  1. Sales Team Productivity Report
  2. Sales Team Performance Report
  3. Sales Team Performance MIS – KRA Analysis
  4. Sales Team Performance MIS – Summary
  5. Sales Team Development Report
  6. Sales Team Deficiency Report

K. After Sales Service MIS

  1. After Sales Service Efficiency MIS
  2. After Sales Service Profitability MIS
  3. Warranty MIS – Replacements
  4. Warrant Management MIS – Product Wise
  5. Warranty Management MIS – Invoice Wise
  6. Service Material Return MIS

L. Miscellaneous S&M MIS

  1. Goods Lost MIS
  2. Stocks Not booked MIS
  3. Slow & Non Moving Stock Analysis
  4. Sales Employee Imperest MIS
  5. Earnest Money / Security Deposit Report
  6. Deposit Float Report
  7. Deposit Float Report – Region Wise
  8. Post Dated Cheque Register
  9. Deduction Made From Invoice by Customer MIS
  10. Debit / Credit Note Control MIS
  11. Balance Sheet Analysis for Sales & Marketing


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Strategic Material & Supply Chain MIS

Developing Strategic Material & Supply Chain MIS

Material is an important cost in any business organization. However, in Manufacturing organizations it is prime cost where it can go up to 90% of total cost. Material Control is important function for any MIS. It has primarily four objectives:

  • Improving Material Quality and Customer Satisfaction
  • Reducing Material Cost
  • Ease of Material Availability
  • Improving overall Material Management System

Keeping above objectives in mind following Class of  MIS Reports are generated for Material:

Material Cost Reports: Purpose of these reports is to Plan, Collect and analyze information on Material Cost factors.

Material Quality Reports: Purpose of these reports is to analyze impact of Material Quality on Final Product.

Material Availability Reports: These reports analyze parameters to ensure timely and adequate availability of material for production.

Material Storage Reports: These Reports analyze parameters to check smooth and efficient working of material stores & warehouse.

Procurement Process Efficiency Reports: These reports analyze efficiency of procurement process.

Based on above classifications, key Material MIS Reports which should be generated in any organization  are as below:

A. Strategic Material MIS

  1. Macro Analysis for Material Management
  2. Bottleneck Analysis for Materials
  3. Material Content Improvement MIS
  4. Material Cost Reduction MIS
  5. Material Planning Report

B. Material Quality MIS

  1. Material Quality Improvement Report
  2. Materials Quality Related Rejections Trend
  3. Customer Quality Grievances Report
  4. Production Rejections Analysis Report
  5. Vendor Rejections Analysis Report
  6. Vendors with high Rejections Report
  7. Rejections Cost Performance Report

C. Material Storage MIS

  1. Stock Verification Discrepancy Report
  2. Physical Verification Frequency Report
  3. Stores Physical Condition MIS
  5. SRN not Accounted For
  6. Material not Returned
  7. Returnable Gate Passes Report
  8. Ageing Analysis
  9. Slow Moving Items Report
  10. Stock Loss at Stores

D. Material Lead Time MIS

  1. Indent & Purchase Order Gap Report
  2. Purchase Order to Supply Time Gap Report
  3. Time Gap for Inspection of Goods Report
  4. Time taken from gate to stores Report
  5. Time taken for issue of material Report
  6. Time taken for release of payment Report
  7. Vendor Wise Supply Delays Report
  8. Item Wise Delays Report

E. Material Price MIS

  1. Price Verification Analysis
  2. Price Composition Trend Report
  3. Foreign Exchange Fluctuation Impact MIS
  4. Price Discounts Efficiency MIS
  5. Price Reduction MIS
  6. Freight Cost Analysis MIS
  7. Demurrage Cost Analysis MIS
  8. Material Price Verification Frequency Report
  9. Adequacy of Quotations Report

F. Purchase MIS Reports

  1. Pending Purchase Orders MIS
  2. Purchase Orders Cancellation MIS
  3. Purchase Orders Revision MIS
  4. Purchase Authority Variation MIS
  5. Vendor Database MIS
  6. New Vendor Development
  7. Vendor Advances Blocked
  8. Material Vendors Ageing MIS
  9. Vendors Balance Confirmations MIS
  10. Legal Vendor Cases Status
  11. Purchase not with lowest bidder’s report
  12. Emergency Purchases MIS
  13. Pending Purchase Requisition MIS
  14. Purchase Order Variation MIS
  15. Pending Disputed Purchases
  16. Stock loss at Material Receipt
  17. Material Return MIS

G. Special Material MIS Reports

  1. Balance Sheet Analysis for Materials
  2. Material Reconciliation MIS
  3. Material Management Process Automation MIS
  4. Production Loss due to Material Availability
  5. Purchase Expenses Analysis
  6. Material Working Capital MIS
  7. Consumables & Packing Cost Analysis
  8. Goods Lost MIS
  9. Insurance Coverage of Stocks MIS
  10. Empty Containers / Bags MIS
  11.  Scrap Treatment MIS
  12. Material Shortage Analysis Report
  13. Material Standards & Ratios Analysis MIS


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