EXECUTIVE SUMMARY

STUDY OF ACCOUNTING PROCEDURES WITH THE OBJECTIVE TO PREPARE AN ACCOUNTING MANUAL

Lark Group India s Second Largest manufacturer of winding wires has three units, one unit at Vadodara and two units at Goa.

A manufacturing company has to perform many jobs such as procurement of raw materials, issuing of materials to different departments for production, payment to suppliers, receipts from customers, managing the sales, fulfilling various statutory requirements etc. Now the management is interested to know if all these activities are properly monitored and timely completed.

The Procedure and Accounting System has been divided into the following modules : 1. Purchase Module: This includes the study from deciding the need to the actual receipt of material & payment to suppliers. This module is divided into two parts: a. Raw material b. Consumables 2. Revenue Module: This includes the study of the process from order generation to actual dispatch of material & receipts from customers.

3. Cash & Bank Module: This includes the study of the process involved in receipts from customers, payment to suppliers, inter branch transfers.

4. Taxation Module: Analysis of the procedures followed for calculation and accounting of various taxes applicable: a. Excise Duty and Education Cess b. Sales Tax ( C.S.T / V.A.T) c. T.D.S d. Service Tax

Project has been carried out by visiting each unit and step by step questioning of respective personnel into units. In all modules the documentation preparation, its validation and the documentation flow has been the focus area of study.

The duration of the project was 2 months. 15 days were spent in Vadodara unit and 15 days in the two Goa units.

Conclusion

One controlling accounting authority for all the units, who would be guide the accounts person and provide standardized entries.

Implementation of new accounting software would help standardization and centralization of accounts department.

For better control for all the departments, implementation of ERP system in all units.

OBJECTIVES
OBJECTIVES: The basic objectives of this project study are: To study the existing procedures and accounting system at Lark Wires and InfoTech Ltd. with an objective to prepare a standardized accounting manual for all the 3 units.

To find loopholes, if any, in the system.

To study the functionalities and the flow of Documents in the each department of the company.

To highlight the various modifications and simplification process that may be adopted to make the process more effective and user friendly.

To study the existing accounting treatment of various transactions and to provide standardization at all units.

To help in practical implementation of the project.

COMPANY PROFILE
LARK WIRES AND INFOTECH LTD Meeting Horizons of Quality ISO 9002 company

Mission Respecting your requirements of economic value addition and translating it into an augmented product through disciplined diligent hard work.

Vision " Our vision to be a leader in magnet wires is based on our competitive edge of cost, quality and customer satisfaction through integration of people, equipment and standardization. "

Organisation Structure The company's day to day operations are managed by Shri Vikash Ladha- MD, Plant Production. Mr Vivek Ladha is MD, HRD & Quality Control. Mr. Rajesh Ladha is Director Marketing in Northern region; Mr Kamal Ladha Director Marketing East & CoAffairs. They are assisted by Shri Avinash Ladha in Corporate Marketing & Finance, and also by Shri Rahul Nath who is Vice President Marketing.

Company s technical team is led by Shri. Suresh Roy at Goa and Shri. K S. Tewari at Baroda. Mr. Rai & Tewari were trained at Italy by SCET spa.

BOARD OF DIRECTORS: Kishore Chakravarty Sharad Sarin Bob Quinn Kamal Kumar Ladha Rajesh Kumar Ladha Vivek Ladha - MD Vikash Ladha MD 4

KEY PERSONNEL Gaurav Ladha Avinash Ladha Rahul Nath A.C.Sharma N.Vardharajan

History of Organisation Lark wires & InfoTech is an existing profit making company. It was incorporated on 2504-1990 in the name & style of M/s V L Cables Ltd. However the name the company was changed from V L Cables Ltd. to Lark Wires & InfoTech Ltd. w.e.f. 24-03-2000.

It is an ISO 9002 company; ISI marked company & reported to be first Indian company to offer UL approved class wires (Lark UL 35 & Lark UL 73).

Group Companies: Lark Wires & InfoTech Ltd. Ashoka Creations Ltd. Unit : Lark Finance Ashoka Credit Ltd. Unit : Gerson Engineering Works Kamal Packaging Pvt. Ltd.

Branches at: 1. Mumbai 2. Calcutta 3. Delhi 4. Faridabad 5. Goa 6. Nagpur 7. Vadodara 5

Production: Production plants at: 1. Goa 2. Vadodara 3. Setting up new plant at Jammu

Production Capacity: Licensed Capacity: 5000.00 mt Installed Capacity: 4066.00 mt

Products: 1. Super Enameled Copper Wire 2. Self Adhesive Tapes 3. Coated and Released Papers 4. Pot / DTI Tes & Paper Cores 5. Marketing & Distribution 6. Financial Services

Turnover: Lark Wires & InfoTech Ltd.: 75 crores for year 2005-06

Ashoka Credit Limited : 20 crores for year 2005-06

Competitors: Precision Wires India Ltd. Ramratna Wires Ltd.

Customers: 1. Videocon 2. Lucas TVS

3. Crompton Greaves 4. Electrolux 5. United Technologies Otis Elevator

The key financials of the Company for the last 4 years are as follows.

31.03.2003 Particulars (Audited) Net Worth DER Sale & Other Income PBIT PAT Cash Profit 1140.67 1.18 4065.43 334.19 0.56 117.68

31.03.2004 (Audited) 1202.75 1.16 5254.58 401.82 0.31 119.65

31.03.2005 (Audited) 1429.00 2.06 5137.00 352.01 22.70 139.95

31.03.2006 (Provisional) 1589.31

7369.89 673.95 301.22 421.22

RESEARCH METHODOLOGY
Problem: To study the existing procedures, documentations and accounting system at Lark Wires and InfoTech Ltd. & with an object to prepare a standardized accounting manual.

Type of data required: 1. Primary Data: The hand information, which has been collected for the first time. Information collected for the first time through interviews, documents assessment on sample basis and observation.

2. Secondary Data: Data which has already been collected, compiled and presented earlier by an agency or any others. Data collected for analysis from the company s Trial Balance and Audit Report.

Method of Data collection: Following methods of data collection were used: 1. Preparation of Modules 2. Questionnaire & Interviews 3. Assessments of documents on sample basis 4. Observation The analysis of the documentation and accounting procedures of a manufacturing company, as large as Lark Wires and InfoTech Ltd. is a lengthy process as it involves lot of planning and detailed study of past records. 1. Preparation of Modules: To simplify the lengthy analysis all the processes were divided into the following modules:

a. Purchase Module: This module contains the study for the process of acquiring Raw Material and Consumables. The analysis is carried out as per the following steps: Need for acquiring material Requisition for material Enquiry / /Invitations for tenders, quotations Finalization of tenders Purchase order: o Verbal o Documentation Acknowledgement of P.O Advance Payment if any Material receipt Inspection Storage of material Taxation Payment to supplier Accounting Entries

b. Revenue Module: This module deals with the actual sales procedure followed by the company. The study of this module has been divided into the following steps: Generation of Enquiry Rate Negotiations Receipt of Sales Order Confirmation of Order Advance Payment received if any Order forwarded to Production Dept Dispatch of Material Invoicing Receipt from Customers Accounting Entries Sales Returns if any 9

c. Expenses Module: This module deals with the procedure followed to incur Revenue Expenditure only. The study of this module has been divided into the following steps: Need for expense Requisition Approval Authorization Documentation Payment Process Reimbursement of expenditure to Staff if any Accounting treatment of each expense

d. Cash Module: This module deals with the cash payment and cash receipts for the company. This study included the following: Determining cash requirement Disbursal of cash Maintenance of Petty Cash Documentation Accounting treatment

e.

Bank Module: This module deals with all the banking transactions concerning the

manufacturing units. The study of this module includes the following steps: Bank receipts procedure Inter-Bank / Inter Branch transfers Maintenance of documents Bank Payment Procedure Reconciliation

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f. Taxation Module: This module deals with the study of the following taxes applicable to this particular manufacturing concern: Excise Duty & Education Cess Sales Tax ( C.S.T / V.A.T) T.D.S Service Tax

2. Questionnaire and Interviews: A general questionnaire was designed keeping in mind the modules. Department wise interviews were conducted based on the questionnaire; with modifications as per the role of the employee. The general questionnaire contained the following questions: a) What is the role of the employee? b) Paper work handled by the employee ( position in flow of documents )? c) How and when does the employee report to his senior? d) What reports does he get from his subordinates? e) How does he use these reports? f) Details of the documentations maintained? g) Consistency maintained in the process?

3. Assessment of Documents: Assessment of the documents involved in the above mentioned modules was done on sample basis. The following documents were analyzed Purchase Order prepared by Lark Sales Orders received Documents involved in the Material Inward Procedure Documents involve in the dispatch procedure Inter Office Memo Statutory documents maintained for taxation All documents required and maintained for L.C and Hundis Payment and Receipt vouchers

4. Observation: A comparative study was done between respondent s answers and the actual system being followed to note the difference between the two. The company used the following self developed software: 11

A. FME: This is accounting software developed and applied in the company since the year 1996 to suit the growing needs of the company. This is Single Entry software. B. LOTS: This is software used to assist customer order processing. It deals only with the sales order processing. There is no different module developed for Purchases in this software. Area of study: 1. Mumbai 2. Vadodara : The manufacturing unit and the administrative office are located in different places. The accounting function is carried out in the administrative office. 3. Goa: The group has 2 units in Goa, one of them at Verna Industrial Estate and the other at Kundaim Industrial Estate ( Gerson Engg. Works Ltd. ); which comes under Ashoka Credit Ltd.

Period of study: 2 months (1st June 2006 to 31st July 2006)

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DATA FINDINGS
Purchase Module:
a) Need: The first step in the purchase process is determining the need for acquiring the material. In all the three units i.e. Lark Baroda, Lark Goa and Gerson Engg. Works Ltd. the need for raw material is decided by the Production department in consultation with the marketing department. The decision to acquire more raw materials is based on the following factors: 1. Pending Orders 2. Stock available The estimated monthly requirement of raw material is calculated at the beginning of every month by the respective production and marketing departments collectively. The estimated quantity of copper is conveyed to the Mumbai office by each unit via e-mail. Enamel Purchase Decision is taken by respective units as per their requirements. The decision on purchase of consumables is taken by the various department heads; as and when needed. b) Requisition for material: Raw Material: The requisition for copper is made verbally to the Mumbai office by the respective manufacturing units. There is no Purchase Order prepared for acquiring copper. The Mumbai office is responsible for placing the order for copper for all the three units. The production department forwards a Purchase Requisition to the stores department for acquisition of Enamel.

This Purchase Requisition has the following details: 1. P.R No. 2. Date. 3. Budget Head 4. Intending Department 5. Description of Material 6. QUANTITY: Required, In Stock, Sanctioned 13

7. Approximate Value 8. Purpose and Proposed make/source. The Head of the Production department signs the requisition. Stores Department also signs the requisition. Consumables: For acquiring consumables a different processes are followed in Goa and Vadodara. Goa: A Material Requisition note is prepared by the indenting department. This note is forwarded to stores department. There are 2 copies made of this material requisition. 1 kept in the stores department and the other in the indenting department. Material Requisition contains the following details: 1. Sr. No, Date and Department. 2. Particulars 3. Quantity required 4. Quantity Issued 5. Stores Folio No. 6. Rate per unit 7. Amount Rs. 8. Remarks/ Machine no. This requisition is authorized by the Head of the indenting department. In case of non availability of material; the shortage quantity is mentioned on the material requisition note by the stores department. The indenting department then has to raise a purchase requisition for the same quantity which is again forwarded to the stores department.

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Vadodara: There is no material issue note prepared for acquiring material from stores. An entry in separate store register is made by the indenting department person. The procurement of consumables is decided by Plant Manager.

c) Enquiry / Invitation for Tenders: Tenders for required quantity of Copper for all units are invited by Mumbai Office as and when required. For purchasing enamel respective units invites proforma invoice. Consumables are mostly purchased from regular supplier without inviting tenders.

d) Finalization of Tender: Finalization of Tender for Raw Material is done by Director and Finance Manager at Mumbai office only. Enamel pricing is based on market price & from only one domestic supplier and one international supplier, so there is no need of finalization for purchasing of enamel. Prices of Consumables are finalized with supplier verbally on phone.

e) Purchase Order: After the receipt of Purchase Requisitions the commercial executive prepares the Purchase Order. The following details are mentioned in the P.O: 1. Suppliers name 2. P.R No 3. Buyer Code 4. P.O number 5. P.O date 6. Item Specifications 7. Material Code 8. Order Quantity 9. Rate (Rs.) 10. Discount 11. Excise % 12. Special Excise % 13. Delivery Schedule 15

3 copies are made of the P.O. Yellow is retained in the Purchase book. Red is forwarded to the stores department. White copy is sent to the supplier. This P.O is authorized either by the Marketing head or the Production head. An entry in the Purchase control register is made; which is maintained by the stores department. P.O. is not prepared at units for Purchasing of Copper and Order is processed verbally or by email through Mumbai office. f) Acknowledgement of P.O.: Acknowledgement of receipt of P.O is not sent by the supplier. Sometimes a verbal acknowledgement is sent.

g) Advance Payment: In case of Enamel 100% advance payment by way of L.C. is done by each unit.

h) Receipt of Material: No prior intimation is sent by the supplier regarding the dispatch of material. In case of Copper and Enamel the security department first informs either the Plant Manager or a senior administrative personnel (V.P. / M.D.). In case of consumables only the stores department is intimated. A phone call is also made to the Stores department by the security guard. Weighing of material is done at Weighbridge in supervision of a Security Person or stores personnel. Material Quantity is verified at Gate against the Invoice. One copy of invoice is given to Transporters Stamped and Signed by the security as an acknowledgment of receipt of Material. Invoice is stamped at the back and the inward serial no. is given as per the MATERIAL INWARD REGISTER is written. Material Inward Register contains the following details: 1. Sr. No 2. Date 3. Gate Entry No. 16

4. Challan No. 5. Bill No. 6. Party name 7. Item Name 8. Quantity 9. Rate 10. L/F 11. Sign 12. Remark Entry in Inward Register and Preparation of MIV (Material Inward Voucher) is done by the Security. The MIV is also Signed & Stamped by security person. MIV contains the following details: 1. Suppliers Name 2. Suppliers Code 3. Store Entry No. 4. Invoice Challan No. 5. Sr. No. (as per given by the Security at the time of entry) 6. P.O no. 7. Date. 8. Material Code (mentioned on the incoming invoice or packaging) 9. QUANTITY: Received, Rejected, And Accepted. 10. Store L.F no.(as per given by the Store Dept.) 11. Remark. 12. Store receipts counted and checked by Store Personnel. 13. Quantity checked by (as per specifications) Store Personnel by. 14. Inspected and checked for quality by the QC department. 15. Indentor: checked and signed by the Head of the concerned department. 16. Gate entry Signed and stamped by Security. Invoice & MIV is forwarded to Stores Department. Unloading of material under is done the supervision of StoreKeeper.

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The date of receipt of material and a tick is marked against the initial entry made in the Purchase Control register.

i) Inspection (Quality Control): a. Raw Material MIV is then sent to QC. QC collects a sample of the raw material. Details of the material are entered in the Raw Material register maintained by QC department. There are different registers maintained for Copper Enamel D.M water Lubricant Test Certificates received with the material are stored in a separate file by the QC department. A serial no is given to the copper reel, which is used for further reference. Enamel is given special code according to the specifications. Tests are conducted to verify the quality of the raw material and if found usable the MIV is passed by the QC department. The MIV is sent to the respective department heads (indentor for the purchase) and they sign it and it is forwarded to accounts department.

b. Consumables Inspection of consumables is done by the indenting department.

j) Storage of Material: Unloading of material is done under the supervision of the Head of the Stores department. A tick is marked against the initial entry in the Purchase Control Register to signify closure of the order.

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k) Taxation: Documentation and accounting for taxation is done in following manner in the respective unit:

Vadodara: RGI register is maintained in the factory by the head of the stores department. He enters the Excise tax paid on each purchase in this register. The details of RGI register are sent to the administrative office on a monthly basis for the purpose tax payment. Entry for C.S.T / V.A.T paid is directly done in the accounting software FME. There is no separate register maintained for this purpose.

Lark Goa: A separate RGI register is maintained in Excel format by the head of the taxation department. A separate Excel sheet is also maintained for C.S.T/ V.A.T.

Gerson Goa: A separate Excel sheet is maintained for Excise Tax and C.S.T/V.A.T by the head of the accounts department. Both the sheets are forwarded to Lark Goa s taxation department on a weekly basis.

l) Payment to Supplier: Payment to suppliers is done in 3 ways: 1. Cash: For purchase of consumables 2. Cheque: For purchase of consumables and enamel; if from a local supplier. 3. L.C: For purchase of copper and for import of enamel.

m)Accounting Treatment: The following main account heads are debited in the case of any purchases: a. Copper: This account shows the purchases made of the CC Rods from the suppliers. b. Enamel: This account shows the purchases of the enameling material required for the manufacturing process. 19

c. Spool: This account shows the spools purchases required for winding of copper wires. d. Packing Material: This account shows the purchase of packing material like Material packing Box. The P.P box strapping material is also included in this account head. e. Stores and Consumables: This account head includes bearings, nut bolts and all consumable items like oil, cotton waste. The entry is made in the same format of the Purchase Invoice. The computerized accounting entry is made in the accounting software FME as per the format of the invoice which contains the product details, payment details and the various taxes applicable i.e. SALES TAX, EXCISE, CESS. A ledger account when opened is given a specific code no which is maintained for further recording of entries. As this code is entered in the format, a debit or credit given to the ledger according to the module.

Entry for receipt of material:

Purchases a/c(Exps A/c head) Excise PLA a/c Cess a/c Purchase C.S.T / VAT a/c To Supplier a/c

Dr Dr Dr Dr

(being material received vide MIV No.____ ,dated___, from respective supplier)

Entry at the time of payment to supplier: Payment via cheque: Supplier's a/c To Bank a/c (being payment made to suppliers by cheque no.__ dated__ against bill no.__ of _______bank ) Dr

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Payment by Cash Supplier s a/c To Cash a/c (Being cash paid to supplier against bill no_____ , dated ___) Payment through L.C. Supplier's a/c To Bank a/c (being payment made through LC dated___ BILC no.___vide bill no.___ due date___ material received vide MIV no___) Dr Dr

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FLOW CHART
PURCHASE MODULE
PURCHASES

RAW MATERIAL

Misc. Material

Copper

Enamel

Requirement Production Manager & Marketing Head

Requirement Production Manager & Marketing Head

Convey to Director / V.P.

Convey to Director / V.P.

Convey to Mumbai Office Finance Manager

if Import

Domestic Supplier

Rates as per HCL/Delhi Office

Rates as per Market

Rates as per Market

L.C. Opening (Mumbai Office)

Requisition for proforma invoice from Supplier Tongling, China

P.O. authorized by Director / V.P. or Production Manager

One Copy of L.C. to Supplier & One copy to lark, Goa

Receipt of Proforma Invoice Lark, Goa

Receipt of Proforma Invoice

Dispatch of Material Against L.C. by supplier

Fax to Mumbai Office

100% Advance payment by cheque

L.C. Opening (Mumbai Office)

Dispatch of Material by Supplier

One copy of L.C. to Supplier via Internet & One copy To Lark Goa

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Dispatch of Material Against L.C. by Supplier

Material Received at Gate

Intimation to Director / V. P. Or Production / Marketing Head By Security Guard

Weighing of Material At Weigh Bridge under Security / Store personnel

Material Quantity is verified by Security against Invoice

Invoice is stamped at back And MIV is prepared by Security

Entry in Material Inward Register (Security)

MIV forwarded to stores

Unloading of Material under Stores dept.

MIV signed & forwarded to Q.C. dept.

Q.C. Test

MIV signed and forwarded to Stores Personnel

MIV signed by indentor

Transporter s copy of L. R. Signed & Stamped By security

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Entry in Store-FME against MIV by Stores Incharge

MIV with Invoice & L.R. Forwarded to Account Dept. Stored in Single File

Verification of MIV and Accounting entry in FME software By Account Executive

Payment as per terms (For L.C.) Mumbai Office

Receipt of Bank Advice

Bank Payment Voucher by Accounts Executive

Accounting Entry (Including L.C. Charges)

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MISC PURCHASES
A

Purchase requisition By concern dept. person (Indentor)

Authorised by Head of Department

Rate Negotiations By Head of Department

Requistion forwarded to Stores Department

Stores Dept. enters in Purchase Control Register

In Case of Local Purchase

In case of Outside Purchase

Requisition forwarded To Purchase Personnel

Purchase Order is prepared by stores personnel & Signed by indenting Department s Head

Purchase Personnel Collects Cash from accounts dept. Preparation cash payment Voucher by Accounts Executive (Authorised by V.P. / Director)

Material received at gate

Purchase Personnel Purchases Material & gives material at Gate with Invoices/Bills

Security enters it in Material Inward Register Prepares MIV, Stamped at Back of Invoice

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Security enters it in Material Inward Register Prepares MIV, Stamped at Back of Invoice & writes Through Purchase Personnel

Material, MIV & Invoices forwarded to Stores Dept.

Purchase Requistion, Material, MIV & Invoices forwarded to Store Department

Store Dept. receives material, Signed and forwarded MIV to Indenting dept.

Indenting Dept. Checks Material And signed in MIV & again forward it Stores Dept.

Stores Dept. Make entry in Purchase Control Register

Entry in FME Stores By Stores Incharge Receipt of Material

Accounting entry in FME By Account Executives

Payment By Cheque

Payment already made in cash In case of Purchases through Purchase Personnel

Accounts Executives prepared Cheque & Bank Payment Voucher

Cheque Signed & Authorised By V.P. / Director

Cheque issued to party With Payment Advice

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Revenue Module:

a) Generation of Enquiry: All the regions; Mumbai, Vadodara, Bangalore, Delhi & Chennai have been appointed marketing personnel who are responsible for generating enquiry and orders.

b) Rate Negotiations: The raw material rates are fixed according to the price list issued by the Delhi office. For major orders the fabrication rates are decided by the respective unit s Marketing head and the V.P / M.D. In other cases the regional marketing personnel have been authorized to fix the fabrication rates with prior approval from higher authorities.

c) Receipt of Sales Order: Vadodara: The regional marketing person receives the sales order in the written form. Along with the order they also forward MF1 (Marketing Form 1) to the respective administrative office. The MF1 contains the following details: 1. Purchase Order No. and Date 2. ST/CST no./date 3. Name of Customer 4. Customer Code 5. Delivery Address 6. Marketing/Sales representative code 7. Depot/Branch code 8. Dealer or agent code 9. Product Description: Size, Specification No., Grade(G1/G2/G3), Total, Rates(as per PL/Discounts), Fabrication rate, Job Work, Customer s Item Code No, Delivery Schedule.

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Charges Applicable are also mentioned: 1. Insurance 2. Bank Charges Customer/ Lark 3. Freight: Customer/ Lark/Paid/ To pay. If paid by transport. Paid to transport by LarkWire/depot/branch or debit note to customer. 4. Octroi to be paid by Customer/Lark 5. Spool Code details 6. Credit Period 7. Local Sales Tax/CST 8. Door delivery/up to 9. Permit 10. Invoice through 11. Contract No. 12. Transporters details 13. Payment Details 14. Customer Limit 15. Customer O/s 16. Customer Overdue Limit 17. Delivery as on This MF1 is authorized by the Senior Commercial Executive / Marketing Head. The P.O and MF1 is received at the administrative office initially. Here it is authorized and then 1 copy of each is forwarded to the factory via fax / courier. Total 3 copies of the MF1 are made 1 copy is sent to the factory with copy of P.O. 1 copy is retained in the office in respective customer s file. 1 copy of MF-1 Stored in a separate MF-1 File as per serial number with P.O. Goa: Here the orders are received via fax, email sent by the regional marketing personnel. There is no MF1 preparation here. The orders are stored in 2 separate files 1 in Sales order file 2nd in the respective Customer Correspondence file 28

d) Confirmation of Order: Order acceptance is sent via email or verbally. This is not followed on regular basis.

e) Advance Payment received if any: In case of new customers 100% advance payment is received against the Proforma Invoice. For regular customers there is credit period of 60 to 90 days according to their credit status.

f) Order forwarded to Production Dept: Vadodara: After the receipt of MF1, it is entered in the MF1 control register by the stores manager. It contains the following details: 1. MF1 No. and date 2. Amendment Slip No./date 3. Customer Name 4. Size 5. Grade 6. Part/Type 7. Quantity 8. Dispatch Quantity 9. Invoice No. and Date 10. L.R No. and Transporter 11. Balance Quantity 12. Dispatched Quantity 13. Invoice No and Date 14. LR no and Transporter

After checking for the material in stock the order is then forwarded to the Production department. Here the production manager does the planning taking in consideration the order requirements and the availability of material.(no time constraints). 29

Following are the details of Production Planning and work order given to the Operators. 1. Job No. 2. Size 3. Grade 4. Type 5. Quantity: Order, stock, Production Required, Actual Planned

Separate planning is done for Wire Drawing is also maintained by the plant manager. The details provided in this work order are: 1. Machines to be used 2. Job No. 3. Size to be drawn 4. Required for final size/inlet 5. Quantity 6. Bobbin Type(Dies) 7. No of Bobbins 8. For Machinery No. 9. To be Annealed: Yes/No 10. Inlet

This is put up on the factory notice board to inform the workers.

Inspection and Quality Assurance: The first inspection stage is done after the Wire Drawing stage. A Wire Drawing Test Register is maintained for it. The results of all the tests are maintained here. The material, which is accepted, is marked OK against its ID and if rejected it is marked as N/C.

After the tests if the material is verified as OK then a tag containing the size and grade of material is attached to the spool. After the completion of first stage of enameling a line sampling test is done. This record is maintained in the Line Sample Register. Online Inspection is done during the Production Process. If any problems are found a memo is given to the operator. 30

2 copies of this memo are made: 1 with the operator and one with Q.C dept.

Final Testing is done after the end of Production Process. The results of this test are maintained in the Final Test Register. Once the material tested OK a green tag is attached to the material/spool and it is sent to stores. Spool no is given by the operators.

A Rejection Register is also maintained.

Goa ( Lark & Gerson): Here also the MF1 is entered in the Pending Order register. A software LOTS is used from this stage on to further keep a track of the order processing. After the entry in the Pending Order register the order is entered in the Customer Order screen in LOTS by the marketing head. After the feeding of Customer Order in the LOTS software; the marketing personnel feeds the due date for the finished product.

The Production Manager, is then able to access this new order on his Production Schedule Sheet. The Start Time and the End Time on this sheet is filled by Production Manager. This is supposed to be the time period in which the production has to be completed. After filling the Start Time and the End Time, this screen is made accessible to the machine operators as Production Screen. The Start and the End time in this screen are the actual time required for production.

The machine operator sticks a Manual Spool Label on the spool about to be produced, and he enters this Manual Spool No. in the Production Screen. Against this Manual No. the software generates a spool no of its own starting with the alphabet to indicate the machine it has been produced on.

A for E1 B for E2 .and so on.

Both these spool nos. are later printed on the Packing Label, Packing Slip. The Weight List Summary contains only the Software generated spool No. 31

Inspection and Quality Assurance: The Q.C procedures are the same that are followed in all units. Only the final entry stage differs due to the software LOTS in both units of Goa.

After the final testing of the material the Q.C personnel manually puts a sticker on each individual spool to indicate it s quality.

Green: O.K Yellow: ShortPack or Rewinding Red: Scrap.

An entry in the LOTS software is also made regarding the status of the material.

Material accepted and sent for weighing is marked Green. Material still under Q.C is marked Grey. Material on Hold is marked Yellow. Scrap Material is marked Light Pink. Material Returned by customer is marked Pink.

The accepted material is then passed on to the weighing department.

g) Dispatch & Invoicing: A computerized weight list summary is prepared and attached with the out going invoice.

3 copies of this weight list are made.

1 is sent with the transporter, 1 is sent to the party 1 is retained in the factory in separate Box File.

Dispatch Documents: Gate Pass, Bill, Lorry Receipt, Weight List Summary. 32

Loading is supervised by store department head. He verifies the material as per the weight list summary and puts a tick mark for every correct entry on his copy of the weight list summary.

Vadodara: Invoice (Bill of Excisable goods) The bills are prepared by the stores person or a dispatch person and the maker of the bill signs on the bottom left corner.

The plant manager does the authorized signature. The following are the details of the bill: 1. Invoice No. 2. Name and Address of the Consignee 3. CST/LST No 4. ECC No 5. Customer Code 6. MF1 No and date 7. Order No and date 8. Transporter or LR No and date 9. Item Code 10. Description 11. No of packets 12. Quantity 13. Rate 14. Value 15. Excise Duty@ 16% 16. Education Cess @ 2% on Excise duty 17. Sales Tax against Form 19 NIL for local and against CST (@4%) for inter state. 18. Total Invoice Amount 19. Date & Time of Removal 20. Vehicle No. 21. Insurance Details.

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4 copies of this bill are made. Pink: Transporter, White: Party, Green: Office (Baroda), Yellow: Retained with the Factory.

The gate pass is prepared by Dispatch person who signs on the left bottom corner and also mentions the vehicle no.

At the centre bottom the security personnel at the gate sings it and stamps it. He does so after duly verifying the material with the weight list and the bill.

The plant manager signs as the authorized person on the bottom right corner.

The details mentioned in the Gate pass are as follows: 1. Date and time 2. Sr. no. 3. Particulars 4. Quantity 5. Challan no./ invoice no. 6. Date

2 copies of the gate pass are made. 1 is stored in a separate box file and another is retained in the Gate Pass book.

The documents dispatched with the material are: 1. Bill in Pink Copy 2. Weight List Summary 3. Lorry Receipt 4. Other forms (if required) 34

Goa: The material passed by Q.C is then brought to the weighing department from the production floor.

The weighing / Dispatch department is intimated by the marketing head about the day s delivery schedule in the morning itself. Weighing of the material is recorded on the Weighing 2 screen in the LOTS software. After weighing is done and all the details are filled in the material is sent for Packing.

The no. of spools to be packed in a corrugated box is pre-decided according to the spool type and the size of the box. A Packing Slip is prepared from the LOTS Pack Auto Form screen. The Packing Slip contains the following details: 1. Case No. 2. IS No. 3. Size 4. Grade 5. Type 6. Spool Type 7. Reel 8. Spool No. (software generated) 9. Gross Wt 10. Tare Wt 11. Net Wt 12. Net Total

The Slip is attached on the Corrugated Box and the pack is sent for invoicing/dispatch. This box is entered in the finished goods stores.

The Invoice is prepared by Marketing Head or Marketing person.

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The Invoice Screen in LOTS contains the following details:

1. Invoice 2. Invoice No. 3. Date 4. Preparation time 5. Customer 6. Consignee 7. P.O No. 8. Against 9. Payment Terms

Vehicle Details 1. L.R no 2. L.R date 3. Transporter 4. Vehicle No 5. Regn No 6. Removal Dt 7. Removal Time

Amount 1. Item Amount 2. Excise 3. Cess 4. Sales Tax 5. VAT 6. Service Tax 7. Other(%) 8. Invoice Amount 36

Spools 1. Sr. no 2. Order No 3. Size 4. Grade 5. Type 6. Pack Type 7. Approximate Quantity 8. WL Quantity 9. Rate 10. Case 11. Excise Duty Rate 12. Customer Copper Rate per kg 13. Other Details : Remarks The vehicle is called in by Dispatch head. After the weight list is printed the material is loaded in the vehicle according to the list. After the loading of material the final Invoice print is taken.

The details mentioned in this Invoice are: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Name of Excisable Good Tarrif No./ Sub-heading No. Ecc no. Pan no C.S.T no Service tax no Tin No Customer Code Invoice No P.O No 37

11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42.

Date Time Name and Address of Consignee CST No TIN No Excise Regd No Name and Address of Buyer if he is not Consignee CST No TIN No Excise Regd No Sr. No Item Code Description of Goods Size No of Cases Weight Rate per kg Value Excise Duty Payable CST Payable/VAT Others Invoice amount Transporter L.R No. L.R date Vehicle No Against Terms of Payment Date of Removal Time of removal Remarks. Insured Policy No.

The authorized signatory is Marketing Head. 38

5 copies of this invoice are made 1. Original for Buyer 2. Duplicate for Transporter 3. Triplicate for Assessee 4. Quadruplicate for Accounts 5. Extra Copy for Personnel department

Documents of Dispatch: 1. Invoice - Transporters 2. Weight List Summary 3. Test Certificate from Q.C. 4. L.R. Copy 5. Gate Pass

h) Receipt from Customers: There are following methods of receipts from customers:

1. Amount directly deposited in Lark bank accounts by customer/regional marketing personnel: Under such conditions intimation is made from the party to the marketing personnel beforehand. In case the cheque is handed over to the marketing personnel and he deposits in the bank, the details of deposit sent to Marketing head or Senior Commercial Executive fax or email. 2. The cheque is sent to Lark Wires office through courier.

3. The third method is a bill of exchange: The terms and conditions of payment are already decided by the marketing personnel while receiving the PURCHASE Order from the customer. 39

The bill is prepared by the commercial executive.

It is authorized by the M.D / V.P.

This bill is either stored with the office in separate file until its maturity or it is discounted with the bank as and when needed.

The decision of bill discounting is taken and authorized by the M.D. the discounted bill copy is stored in the separate file.

i) Accounting Treatment:

Entry at the time of dispatch of material: To make a sales entry in the software; a STOCK INWARD entry has to be made first. This entry is made against Material Received from Manufacturing Unit as it is mentioned in FME Software.

The Stock Inward entry is passed as per the invoice.

The amount of stock inward is equal to TOTAL INVOICE amount

SALES TAX i.e. it

includes the value of product, the excise and the education cess levied on it.

Sales Tax is not included as there is no sale made. Entry : Stock Inward A/c To Store A/c Person making the entry in the FME software marks the Invoice on the top left corner with an entry number which is same as the invoice no. This number is circled. Dr.

The stores account is given a debit after a certain period by preparing a journal entry. Store A/c To Stock Inward A/c 40 Dr.

These entries are dummy entries. These are made to accommodate with FME software, these are not related with accounting effects.

After Stock Inward entry an immediate sale entry is passed which is shown on the debit side of customer s account by total invoice amount i.e. Sale Price+ Excise and Cess+ Sales Tax

The invoice is marked with the entry no which is same as the invoice no. this no. is marked upper right side of the invoice. For example 665/665.

The computerized accounting entry is made in the accounting software FME as per the format of the invoice which contains the product details, payment details and the various taxes applicable i.e. SALES TAX, EXCISE, CESS.

Customer's A/c To Sales a/c To Sales - C.S.T / VAT a/c

Dr.

(being sale made against invoice no. ___dated ____)

In Case of payment receipt through cheques:

Bank A/c To Customer s A/c

Dr.

(being payment received by cheque no.___ ____bank against bill no.____ dated____)

dated___ deposited in

In case of Bill of Exchange: At the time of discounting of bill Bank A/c To BPBD A/c (being bill no. ___ discounted and credited on account of___ against invoice no ___ dated____ amount____ ) 41 Dr.

Bank Charges(BPBD) A/c To Bank A/c

Dr

(being amount debited by bank as per bank advice bill no.__ ______ discounted by bank)

dated

Service Tax A/c To Bank A/c

Dr.

(being service tax deducted by bank @ ___%)

At the time of maturity of bill

BPBD A/c To Bank A/c

Dr.

(being payment recd against bill no.___)

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FLOW

CHART

SALES MODULE
SALES ENQUIRY : Marketing Personnel At Branch Offices Send P.O. / MF-1 to Lark, Goa

Receipt of Order & Enters details in Customer Order Module in Lots: Marketing Head & also in Pending Order / Dispatch Register

Production Planning (Duration of Production and Dispatch) Entered in Lots : Marketing Head

Production Scheduling in Lots by Production Manager

Production

Inspection & Quality Control

Weight of Spool entered in Lots Weighing Personnel

Labeling & Packing of Material

Dispatch Schedule Prepared by Marketing Head every morning & informed to Dispatch Personnel

Preparation of Invoice & Generation of Weight List Summary in Lots By Marketing Executive

Weight List Summary printed and L.R. Details are entered in Lots by Weighing Personnel

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Material Loaded as per Weight List Summary

Invoice Printed in 5 Copies by Marketing Executive & Signed by V.P. / Marketing Head and entered in Pending Order / Dispatch Register

Customer Copy

Transporters Copy

Account Dept. Copy

Assesses Copy

Extra Copy

Sent with Transporter or by Courier

Lorry Receipt prepared by Transporter One copy is retained In a file

Account Entry for Sales as per Sales Invoice by Accounts Executive

Taxation Dept. Prepares Excise & Sales Tax Documentation in Excel on next day of Dispatch & Stored in a File

Gate Pass Preparation By Dispatch Personnel 2 copies One Copy for Security One Copy in Book

Receipts Stored in a File

Gate Pass given to Security, He Checks Material & stores Gate Pass in a file

Acknowledgement From Transporter With his bill details.

Cheque Directly Deposited by Customer Or Mktg. Personnel

Cheque received at Lark, Goa

Bill of Exchange

Cash

Receipt of Advice & Paying Slip

Entry in Inward Register by Admn. Personnel

Preparation of Bill by Accounts Exec. Signed by V.P.

Cash A/c ..dr. To Customer A/c

Accounting Entry

44

Storage of Covering Letter in respective Customer File Storage of Bank Advice And pay-in-slip in respective Customer File.

Acceptance by Customer

Deposit of Cheque Admn. Personnel As per Instructions

Storage of Bills in Separate File by Accounts Executives

Bill Discounting (Decision By the Mumbai Office) Storage of Pay-in-slip Admn. Personnel

Discounting Charges debited by bank and advice received Accounting Entry of Bill Discounting (Bank A/c Dr To L.C. Cust. A/c )

Accounting Entry Receipt of Advice from Bank (Deposit of Amt. by Customer) In case of Dishonour Entry is reversed Accounting Entry against Receipt of Advice : Credit to Customer (L.C. Cust. a/c Dr. To Customer.)

Intimation to Customer

45

Cash Module:

a) Determining cash requirement:

Vadodara: Here as the administrative office & unit are at different places, the cash requirement decision at both the places is taken by different authorities. At the administrative office the Senior Commercial Executive is responsible for determining the minimum cash requirement. At the unit the plant manager decides whether more cash is needed for operations.

Goa: Here in both the cases; the factory and unit are at the same place. Here the V.P or the Senior Commercial Executive is responsible for determining the need for more cash.

b) Maintenance of Petty Cash: Vadodara: Minimum cash maintained in the administrative office is Rs. 10000/-. The cash box is under the supervision of the accounts head. The balance is checked on a daily basis. The cash book is also maintained by the accounts head. In case of cash being below the minimum level, the Senior Commercial Executive has the authority to approve cash withdrawal from the bank. Minimum cash maintained at the units is Rs. 30000/-. The cash book here is maintained by the Stores head/ factory assistant. In case of cash being below the minimum level a verbal intimation is made by the plant manager to the Senior Commercial Executive at the administrative office.

Goa: In both the units the minimum cash maintained is Rs. 10000/-. The accounts head make a verbal requisition to the V.P; in case of cash being low than the minimum level.

46

c) Disbursement of Cash and Documentation:

Vadodara: Cash Payment Vouchers are prepared by the accounts head and these payments are authorized by the senior commercial executive. The factory cash expense vouchers are sent to the administrative office along with the monthly list of expenditures. The vouchers are prepared by the factory assistant and authorized by the plant manager. These vouchers are also stored in the administrative office. After the approval of the senior commercial executive cash is sent to factory as and when needed. In this case 2 vouchers are prepared. Cash receipt voucher for the bank withdrawal and cash payment voucher for cash disbursement to the factory.

Goa: All the cash expense vouchers are prepared by the accounts head and authorized by the V.P.

d) Reimbursement to employees:

Any amount to be paid to employees for office expenses has to be first approved by the V.P / M.D. The employee is reimbursed for his extra expenses only after providing the proper supporting documents. In absence of Proper supporting documents the expenses are debited to the employees account.

e) Accounting treatment:

In case of cash being sent to factory Factory Cash A/c To Cash A/c ( being cash transferred to factory petty cash) 47 Dr.

In case of expenses being paid through cash:

Expenses A/c To Cash / Factory Cash A/c

Dr.

In case of Employee being given advance for expenses

Employee s A/c To Cash A/c (being cash paid to employee for

Dr.

. In advance)

Supporting Documents produced

Expenses A/c To Employee s A/c

Dr.

(being employee paid for ____expenses through advance already given)

48

Bank Module:
a) Bank receipts procedure: All the bank receipts methods and procedures are already mentioned in one of the above modules.

b) Inter-Bank / Inter Branch transfers:

A credit advice is sent by the bank to the office. A journal voucher is made by Account Executive. An entry is made against this voucher. (No base Document) Bank receipt voucher This voucher is prepared by accounts executive. The Voucher contains the following details: 1. Account Head 2. Code 3. Sub code 4. Narration 5. Amount The actual bank advice is stored in the BANK VOUCHER FILE. This file contains both: bank payment voucher and bank receipt details.

The voucher has the JOURNAL ENTRY no. written on it on the right top corner. The intimation of fund transfer is given via telephone only. There is no base document for this transfer.

Accounting Entry for this transaction:

The Lark Goa bank ledger account is debited and the branch account from which the fund is transferred is credited. This is done only after intimation is received or an advice is received from the bank.

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c) Maintenance of documents: All the bank vouchers are stored in each bank s voucher file. All the bank advices are also attached with the respective voucher. All the covering letters received from the customers are stored in respective customer correspondence file. The L.Cs are stored in separate L.C files. The discounted bills of exchange are also stored in different files.

d) Bank Payment Procedure: All the bank payment procedures are mentioned in one or more of the above modules.

e) Reconciliation: Bank reconciliation is done by the accounts executive at the end of every month. Reconciliation report is stored in the respective bank statement file.

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Taxation Module:
Taxation part of Lark Wires & InfoTech Ltd., Vadodara is mainly carried over by Senior Commercial Manager.

Taxation part of Lark Wires & InfoTech Ltd., Goa and Gerson Engg Works, Goa is mainly carried over by Taxation Dept. of Lark Wires & InfoTech Ltd, Goa jointly. The required details regarding all taxes is stored in separate files as well as in excel sheet by Account Executive of Gerson Engg. Works Ltd., Goa and the same are forwarded to Taxation Dept. / Accounts Dept. of Lark Wires & InfoTech Ltd., Goa on weekly basis or as per the requirement. a) Excise Duty & Education Cess Excise Duty 16.32% Vadodara: Calculation of Excise from invoices is done in Factory manually in RG II register by Stores Personnel / Factory Assistant. In RG II register both the calculations are made i.e. Excise Duty Collected and Excise duty paid. (Excise Duty 16% & Cess 2% on Excise Duty)

The difference of Excise duty & cess collected and Excise duty & Cess paid is supposed to be paid which is done by Vadodara Administrative office. Calculations of Excise Duty on Stock of finished goods are also done in administrative office by senior commercial manager. The Finished goods of Closing Stock figure is maintained in stock register in factory in a specially developed software for stock. The RG-II register details are

forwarded at every month to administrative office which is verified by senior commercial manager and the balance payment is made through Bank.

If any amount payable challan is prepared and amount is deposited in PLA a/c maintained with Excise Dept. before 5th day of next month. Excise Return i.e. ER-I is prepared by Senior Commercial manager at the end of every month and submitted to Central Excise Dept. before 10th day of next month.

51

All the correspondence with Excise Dept. is stored in a separate file.

Goa : Taxation Dept. personnel maintains RGI register / CenVat Earned register for the Excise credit available on purchases for the month in excel worksheet.

The daily Sales and Purchase invoices are forwarded to Taxation dept. where they calculate the excise payable or Cenvat credit available. The Daily Stock Register is maintained by taxation dept. for Excise on sales. The stock register is prepared as per the details received from dispatch dept. every morning. ( Stock summary from LOTS)

Taxation Personnel calculates the total excise payable for the month and informs about the amount to the accounts department. Excise Returns are filed by Taxation Dept. Personnel in the form E-R1. The payment of excise has to be made before 5th of every month. The return is prepared by Taxation Dept. personnel and filed it with Central Excise Dept. before the 10th of every month. All the payments of excise are done in PLA a/c.

Separate registers are maintained for each excisable item purchased or sold. Only the monthly payment entries are made in the software.

In case of Job Work

Form 56H is given by customer for non-levied of Excise on bill.

These forms are stores in a separate file and its details are also mentioned in excel sheet.

b) Sales Tax ( C.S.T / V.A.T)

C.S.T. :

4% for register inter-state customers against C form 12.5 % for unregistered inter-state customers

V.A.T. :

4 % for intrastate customers 52

Vadodara : C.S.T. : Calculation of C.S.T. is already done while preparing invoice. When accounts personnel enters invoice details in FME, amount of C.S.T. is automatically transferred to C.S.T. register. At the end of every month C.S.T. payable to Sales Tax Dept. is calculated by Senior Commercial Manager and the same amount is paid to Sales Tax Dept. with challan before 5th day of next month. Monthly return with challan and details of Sales is submitted to Sales Tax Dept. before 10th day of next month.

V.A.T. : Calculation of V.A.T. is moreover same as per Excise calculation. Senior Commercial Manager calculates the ModVAT (available on local purchases) earned and VAT payable on sales at end of every month. Local Purchase and Sales is very low so VAT transactions are very less. Payable amount if any is paid to Sales Tax Dept. with challan before 5th day of next month. Monthly return with challan and details of Sales is submitted to Sales Tax Dept. before 10th day of next month.

Collection of C form from customers is mainly done at year end. Follow-up is done by Commercial Executive. Yearly Assessment is handled by Senior Commercial Executive.

Goa : C.S.T. : LARK GOA has been exempt from SALES TAX up to 15 years from incorporation. Quarterly Return is filed in this case showing SALES TAX as Nil by Taxation Dept. Personnel before 10th day of next month.

V.A.T. : VAT is applicable in Goa. Taxation Dept. records ModVAT earned from local purchases in excel sheet. VAT on Sales is also recorded in excel sheet by Taxation Dept. whenever sales occurs. All the calculations regarding VAT is done by Taxation Dept. at every quarter end. Taxation Dept. maintains a Statement of Restrictive Tax Invoices issued in excel sheet. 53

If VAT exceeds than ModVAT at quarter end then payable amount is paid to Sales Tax Dept. with challan before 5th day of next month. Quarterly return with challan and details of VAT is submitted to Sales Tax Dept. before 10th day of next month. Yearly Assessment is handled by Taxation Dept. Head.

c) T.D.S.

Contractors / Transporters : The T.D.S. rates are : 2.04% for Non-Companies i.e. individuals 2.24% for Companies 2.04% includes 2% T.D.S., 2% cess on T.D.S.. 2.24% includes 2% T.D.S., 10% surcharge on T.D.S., 2% cess on T.D.S.. T.D.S. is deductable only if contractor / transporter exceed Rs. 20,000 receivable from company in a year.

Salaries : T.D.S. on Salaries as per Income Tax Slabs Upto 1 Lacs 1 Lacs to 1.5 Lacs Nil 10% 20% 30%

1.5 Lacs to 2.5 Lacs 2.5 Lacs & above -

Vadodara : T.D.S. is deducted on Job Work & Transporters @ 2.04% on the Bill. Calculation of T.D.S. is done by Senior Commercial Manager. Monthly Challan is prepared for payment of Tax Deducted and payment is made before 7th of next month. Return is also prepared for the same and submitted to Income Tax Department online through a CA before 10th of next month. The documents are stored in a separate T.D.S. file.

54

T.D.S. certificates are issued to Company & Transporters on monthly basis after the payment of T.D.S. to IT dept. All the copies of T.D.S. certificate issued are stores in respective Company correspondence file. T.D.S. certificate received from our customers are stores in a separate file and at the year end all the certificates are forwarded to Kolkota Office.

Goa : T.D.S. is handled by Accounts Executive in Goa. T.D.S. is deducted on Job Work & Transporters @ 2.04% on the Bill. Calculation of T.D.S. is done by Accounts Executive. Monthly Challan is prepared for payment of Tax Deducted and payment is made before 7th of next month. Return is also prepared for the same and submitted to Income Tax Department by Taxation Dept. Personnel before 10th of next month. The documents are stored in a separate T.D.S. file.

T.D.S. certificates are issued to Company & Transporters on monthly basis after the payment of T.D.S. to IT dept. All the copies of T.D.S. certificate issued are stores in respective Company correspondence file.

T.D.S. certificate received from the customers are stores in a separate file and at the year end all the certificates are forwarded to Kolkota Office.

T.D.S. on Salary: Tax deducted from salaries depends upon the salary of the employee. Tax is deducted on monthly basis or quarterly or half yearly, form 16 is issued at year end with details of deduction of taxes to employees by Accounts Executive.

d) Service Tax Bank directly deducts the Service Tax and debits respective bank account. Account Executive make the entry on the same date but after receiving the bank statement on monthly basis. Credit of Service Tax under Excise is also considered while preparing Excise Return by respective person.

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OBSERVATIONS
Lark Wires and InfoTech Ltd. is growing manufacturing company and has manufacturing units at different locations. During my project work I observed that there is no such controlling authority for accounts to all units.

Considering the growth of company accounting software FME which is currently in use needs to be changed. The software FME has limited usage considering the increasing turnover of company and various reports required for managerial decisions.

Customer order processing software LOTS which is used to track orders, production planning, invoicing, dispatch, finished goods stock etc., it deals only with sales order processing. It is a helpful software but it has certain limitations also. Vadodara unit is using FoxPro base developed software for maintenance of finished stock inventory.

There is no any specific software for maintaining Raw Material and Consumables Inventory in all units.

Information Network of company required effects of business transactions which should be immediately visible in various reports and same set of records is available to every one at same instant across the organization.

56

RECOMMENDATIONS
Lark Wires and InfoTech Ltd. is a growing manufacturing company and expanding its business by developing new manufacturing unit at different place. Here I would like to recommends certain things which would be beneficial to company for now and future growth.

Finance and Accounts is a crucial part of every business and my main emphasis was on this department during my project work. One controlling authority should be there for all units for accounts department; he will guide the accounts personnel and control entries which will help for accounts standardization. Accounting software FME should be changed. A new accounting software such as Tally 8.1 or any other as per company s budget should be implement in all units. implement in all units. LOTS software should be updated and

Centralization of accounts would be more beneficial for growth of company in long run. This is simply possible by appointing a Controlling Authority and implementation of new accounting software.

The implementations of above recommendations are easily possible right now for company without much expense. But for a better control in all departments following recommendation would help a lot through it would take time to implement and a major expense.

Major recommendation is development and implementation of ERP system in all units and offices. Benefits of implementing ERP as shared, central and validated data ensures that there is no any reconciliation requirement and a lot of internal communications and confusions are saved. Business rule module ensures adherence to set business rules. Instant reporting and visibility into operations would make operational decisions proactive and in time. Workflow and synchronization across departments reduce business cycle times. No follow-up or chasing is needed for a task. A time-based control on tasks can highlight delayed tasks immediately to seniors. Connecting from anywhere makes transactions and business flows faster. 57

BIBLIOGRAPHY

Website: www.larkindia.com

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