The objective of our activity within this phase will be to identify areas of excessive or disproportionate expense.
We will attempt to determine areas in which cost can be reduced or eliminated. We will review the procedure for computing revenues for the Facility. Additionally, we will review procedures for calculating operating and payroll expenses and product cost.
If possible, we will review monthly financial statements for the last twelve months of operation. The emphasis of our study will be on the following areas:
- Cost of sales
- Operating expense line items
- Deferred expenses, if applicable
- Depreciation expense
- Methods of developing operational budgets
- Other items of particular concern to you and or management
We will conclude activities within Phase III with a written summary of our analysis. This document will identify all areas that, in our opinion warrant a closer scrutiny due to an imbalance in expense allocations or improper variances.
We will present recommendations for developing a general strategy to correct those items considered to be out of line.