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Revenue Leakage-Software Company

Wsmahesh (CA and CWA qualified) (75 Points)

10 May 2007

hi everyone,
im currently into an operational audit of a software company. teh scope includes looking into teh revenue leakage and arresting them and to check teh excess booking of teh same. do help me what is teh procedure to proceed with.

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3 Replies

The One (379 Points)
Replied 10 May 2007

The One Says:

Hi Mahesh, this sure is an interesting assignment.

If you give me some more details it would lend itself to specificity. Provide me with the areas and the problems you are facing and I could try to give you some ideas.

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Wsmahesh (CA and CWA qualified) (75 Points)
Replied 10 May 2007

to put you teh larger picture this company is basically into two type of services... one buying hardwares and its affliated software for its customers and delivering teh same... teh other one being developing software for its customers....teh development of teh software usuallly hovers arnd 4-5 months......(the main development is teh automation)......
How to go abt teh audit and check teh leakage or to chck teh excess of teh softwares they have developed and for teh hardwares sold by them

The One (379 Points)
Replied 10 May 2007

The One Says:

First of all, get hold of their operations/procedural manual - it will give you an idea of how they operate. This if developed scientifically should give the ideal procedures.

Next do a compliance check to test whether these procedures are adhered to - what are the exceptions. The exceptions should give you a clear picture of the revenue leakages.

My understanding is that of the two segments the retail segment where hardware & affiliated software is purchased should be optimized so that there is maximum efficiency. This would mean reducing the cycle times (ie the time it takes from when the order is placed to when the final product is delivered). This can be achieved with vendor agreements and faster transaction processing - develop dedicated customer support teams for larger customers etc.

Now for development of new software you should do an analysis of the SDLC of typical software developed by them. This data will give you an idea of efficient processes, constraints, inefficiencies and bottlenecks & identify key factors (staff time available and expertise). The scope for optimization here is slightly less since the development process would vary depending on the type of software requirements. But even here if procedures are in place to quickly generate the user requirements, alpha/beta testing, user modifications and user acceptance scope for revenue assurance is good.

Hope this helps ...... let me know if this was useful for you.