Manager Credit Crunch in Tally 9

Features

Its classification may be on the basis of monetary value, availability of resources, variations in lead-time, part criticality to the running of a facility, new customer parts unique to that product, and others

ABC Analysis is motivated by the principle, ‘80% of the expenses are controlled by 20% of the factors’. ABC Analysis is an important tool to combat credit crunch and spiraling expenses by prioritizing it. The categorized expenses in the accounting system are classified into various categories viz. A, B, C

• “A” - items are the highest priority, the tightest control, frequent deliveries, close follow-up, and accurate records. Planning and Scheduling these parts utilize MRP (Material Requirements Planning), DRP (Distribution Requirements Planning, or EOQ (Economic Order Quantity) or other lot sizing techniques such as Lot for Lot. 10 % of the “A” items volume accounts for 70% of the total inventory value.
• “B” - items are the priority when low or out of stock. Normal control is used and good records are maintained. EOQ and other lot sizing methods can be used effectively with these items. “B” items account for 20% of the total inventory value, and 20% of the inventory volume.
• “C” - items are the lowest priority, simplest method of control. Min/Max used for ordering. These parts are usually expensed, as there are no records for them. These parts represent 10% of the total value, and 70% of the volume.

Benefits

• The analysis can be carried out base on Rate, Value or Quantity which give the user a lot of flexibility
• One can define your own parameters for ABC analysis
• The graphical representation gives a picture of the necessity of the expenses
• Integrated with the accounting system

Client Speaks 

Analysis helped me to differentiate between required expenses and unnecessary costs. “

- CEO of the manufacturing company