P & L review
1. Preliminary Preparation
2. Revenue Analysis
3. Expense Analysis
- Identify each expense item.
- Classify expenses as fixed or variable.
- Create a list for each category.
- Ensure all expenses are accounted for in the appropriate category.
- Verify receipts and documentation for each expense.
- Cross-check expenses with accounting records.
- Confirm that all entries are reflected in the appropriate accounts.
- Look for missing entries or discrepancies.
- Obtain expense reports for the current and prior periods.
- Create a comparative analysis table.
- Identify percentage changes in each category.
- Assess whether expenses align with budget expectations.
- Analyze expense trends for significant increases.
- Drill down into specific categories showing spikes.
- Gather explanations from relevant departments.
- Document findings and potential causes.
- Collect expense data for several periods.
- Graph expenses to visualize trends.
- Highlight consistent increases or decreases.
- Investigate reasons behind identified patterns.
- Calculate the contribution of each category to total expenses.
- Analyze how each category affects net profit.
- Identify high-impact expense categories.
- Recommend adjustments based on profitability insights.
- Gather all current vendor contracts.
- Evaluate terms, pricing, and conditions.
- Identify contracts that are up for renewal.
- Propose renegotiation strategies for cost savings.
- List all discretionary expenses.
- Assess return on investment for each expense.
- Determine necessity based on business objectives.
- Recommend areas to cut or adjust spending.
- Research industry benchmarks for each expense category.
- Compare company expenses to industry averages.
- Identify categories with higher-than-average spending.
- Develop strategies to align with industry standards.
- Review expense entries for duplicates.
- Cross-reference entries with receipts and invoices.
- Rectify any errors found.
- Document corrections made.
- Calculate total expenses for the period.
- Divide each category's total by overall expenses.
- Convert to percentage for easy comparison.
- Highlight major expense categories.
- Gather budgeted and actual expense reports.
- Identify variances for each category.
- Analyze reasons for significant deviations.
- Document findings and recommend actions.
- List all fixed costs.
- Analyze each cost for reduction potential.
- Evaluate impact of cost reductions on operations.
- Prioritize areas for potential cuts.
- Examine payroll records for accuracy.
- Ensure compliance with local labor laws.
- Check for any discrepancies in employee compensation.
- Document findings and necessary adjustments.
- Analyze expenses over different seasons.
- Identify patterns related to seasonal changes.
- Evaluate how these fluctuations affect budgets.
- Adjust forecasts based on seasonal trends.
- Schedule meetings with department heads.
- Gather feedback on spending patterns.
- Discuss potential cost-saving measures.
- Document insights and recommendations.
- Compile a list of identified savings opportunities.
- Assess potential impacts on operations.
- Document how savings will be tracked.
- Share findings with relevant stakeholders.
Use in Manifestly