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Finance and Accounting – the backbone for the Dairy Industry

Dealing with thousands of farmers on one side and distributors, retailers on the other side is a tough job in managing business operations. Generally, this perculates to numerous transactions each day with each of these business partners is no mean task. Each farmer ledger will have not just milk transactions but also several other inputs supplied to him. Accounting for each of these transactions is critical to ensure no loss of revenue. Typical complexities include loan recoveries in installments, tax incidence on some of the supplies, withholding tax (TDS) on transactions crossing certain threshold limits, reconciliation of the same with tax department records etc. add a lot of complexity.
Similarly, managing ledgers of individual distributors and retailers on the sales side has numerous challenges. While some of the dairy products attract GST some are exempted. Mandatory on-line integration with the Tax Department’s portal to generate unique department allotted invoice numbers (e-Invoice) and e-waybill etc. needs very careful monitoring and upgrades from time to time. Sales Invoices consisting of multiple products, deliveries needing different tax treatment for interstate and intra state etc. require an integrated financial system without which reconciliation of thousands of monthly transactions before filing the periodic tax returns would be a big challenge. While the market is very dynamic and competition forces the sales teams to be innovative in launching promotions and offers it adds complexities to finance teams in managing them in each of the parties ledgers. Real-time updation is critical to manage the credit risk carefully. Certain timely decisions like stop supplies to defaulters etc. Having a robust financial management system is a bare minimum infrastructure to financially sustain the dairy operations. General off-the-shelf accounting systems cannot meet these dairy specific needs. Integrated finance and accounting module of Milkosoft handles business complexities associated with large volume transactions with farmers and sales partners. While this module serves as the backbone for several large dairies; has helped several specialty dairies in scaling up their operations fast. Similarly, integrations with HR, store and purchase, engineering modules make it easy for dairies to manage their finances efficiently.

Reduce Accounting Errors and eliminate frauds

The integrated accounting module relieves accountants from the drudgery of passing thousands of accounting entries each day. With automated postings the bookkeeping would be real-time. With robust reconciliations and in-built control accounts human errors get eliminated. Processes, user interfaces and language used make it so easy that even a non-finance professional also can run the finance and accounting module of the Milkosoft ERP with zero errors.
Robust budget module with work flows to support delegation of financial powers and in-built audit trails help easy identification of who initiated the transaction, who approved it, transaction amount etc. and creates a controlled fraud proof environment. Under such a controlled environment keeping track fund deployment, end utilization of project funds and grants or implementation of benefits or subsidies directly to the farmer etc. can be much more efficient.

Real-time consolidations and automated inter-unit reconciliations

Dairies with multiple plants or different business segments (like milk, ice-cream, sweets, powder conversion etc.) can easily track transactions down to the bottom-most level. Transfer of funds, goods, assets etc. is a routine affair in business however, poses a major challenge for accountants to keep track of them. A lot of times Accountants struggle to consolidate financial results across the profit / cost centers to generate consolidated financial statements. Milkosoft’s robust finance and accounts module makes life easy for accountants engaged in monthly closure of accounts to report periodic performance of the organization. Readily available reporting formats that match disclosure stipulations from applicable Acts and ability to drill down transactions to the source level makes it easy while facing financial audits and tax compliances.

Case Study

BRAC Dairy and Food Project was the first dairy company in Bangladesh to receive the ISO 22000 certification. When it first started, BRAC was producing 140,000 litres of milk every day. They were having difficulties in managing different manual tasks and had to do a lot of reworks. There was an unavailability of accurate as well as real-time data which was hampering their progress.

By implementing Vasista’s off-the-shelf ERP Milkosoft, BRAC was able to automate their entire supply chain. They reduced the amount of rework to be done and aligned with the best industry practices to increase production. Availability of real-time data and reports gave them more control over the business processes. Now BRAC operates 101 chilling centres and processes 250,000 litres of milk every day. It has more than 50,000 registered farmers and 1500 employees working in 101 chilling centres and processing 250,000 liters of milk per day.

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