The objectives of an operational review and the manner in which the review is to be performed varies per project.
Areas that may be covered can include a review of operations, overhead and direct expenses. The team works closely with the principals of the company to identify areas of possible cost reduction, duplication of administrative effort and product line profitability.
The review is intended to address significant business issues and not intended to be limited by function restricted to any particular part of the business. A proposed approach may include:
- To review the management and personnel structure, the responsibilities of all profit / cost centres and the personnel therein.
- To review the existing accounting and management information systems with a view to ascertaining the ability of the system to report to management in a timely manner the operating results.
- To examine the existing budgetary process and effectiveness and importance of same.
- To set up interview programs with all personnel involved in the major areas of the company to identify areas of operational inefficiency.
- To identify both medium- and long-term operational inefficiencies and improvements and prioritize by immediacy and payback.
- To identify secondary areas of possible improvements.
- To review the capital budget expenditure system and the cost benefit analysis and approvals pertaining to same.
- To review in detail accounts receivable and assess effectiveness of procedures to collect all over 60-day accounts.
Our professional team assists in implementation of recommendations and monitors the implementation. The engagement letter covers the services to be provided as well as the services not to be provided, and any limitations of the procedures to be performed.