Gentlemen, if any of u is in a managerial post, will u kindly explain what is "Revenue Leakage"?

Question

Renue Leakage is applicable to public utilities and large industrial organizations. I am in urgent need answer to this question. Please help.

Answer 1

Before starting any business process like-production,raw material processing,supplying,packaging,advertisi... study,etc......Budgeting is done and an estimated cost is allotted to each and every process.When the actual process begins there are many reasons why the cost exceeds the actual budget, it can be Natural calamity,mis-management,inefficient accountancy,market factor and many other external reasons.

We need to keep a tap on all such factors and prevent it.Because prevention is better than cure for a company to hold its market share.

Answer 2

Revnue leakage is one kind of cost related to sale.

Answer 3

Various causes of Revenue Leakages are listed below,

1.  Additional cost of Sales, due to change in market condition.

2.  Increase in transportation cost and shrinkage of market in neighbouring area of Manufacturing unit.

3.  Additional credit period to be extended, to remain in market.

4.  Increased Banking cost.

5.  Bad Debts. etc, etc.

Answer 4

Probabally it is the money provisioned to take care of cost of sales and take care of some specific costs related to working capital !!  

Try to serach on net you may find some more appropriate answers

Answer 5

Revenue Leakage, cause reduction in profit or loss to organisation. Wastage, of resource and material, and under utilisation of equipment and employees, are the main reason of Revenue Leakage.

Plug the wastage, and target to have an optimum utilisation.