Case 03 | Manufacturing | Budgeting & Cost Control

Hidden Cost Discovery
via GL Reconciliation

Company
GSW Manufacturing
GL Entries Analysed
48
Hidden Costs Found
$356580
Clean Entries
31
Error Entries
17
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The Budget Reviews That Never Ended.

GSW Manufacturing's finance team was running frequent, inconclusive budget reviews. Variance explanations required manual investigation every cycle because nobody trusted the source numbers. The root cause: fragmented ERP inputs had allowed three categories of error to accumulate — duplicate entries, misclassified GL codes, and intercompany noise — across 48 ledger lines. The intervention combined a unified data layer and explicit validation rules with AI-assisted reconciliation: models ranked suspicious postings (near-duplicate journals, GL misfits, intercompany outliers) so humans closed exceptions faster. In the first pass, $400K in hidden costs surfaced.

Duplicate Entries
4
Full amount double-counted
Misclassified
10
10–40% partial cost hidden
Intercompany Noise
3
5–20% partial cost hidden
Total Hidden Cost
$356580
Surfaced in first pass

The $400,000 wasn't new spending — it was always there, silently embedded in duplicate records and misrouted GL codes. The intervention was not a cost-cutting programme. It was a data accuracy programme that made invisible costs visible. Machine-assisted pattern detection narrowed the search space; finance owned the final classification and sign-off—keeping automation on the safe side of auditability.

Adapted from: GSW Manufacturing FP&A Case Study, Limelight FP&A 2024

Error Type Distribution (48 Entries)

Hidden Cost by GL Category ($)

Entry ID Category Amount ($) Error Type Hidden Cost ($)
GL-2400 SG&A 13906.49 Clean
GL-2401 Labour 22856.86 Clean
GL-2402 SG&A 64253.42 Clean
GL-2403 R&D 38753.75 Duplicate $38753.75
GL-2404 Labour 23612.87 Clean
GL-2405 R&D 20907.01 Clean
GL-2406 R&D 38561.59 Clean
GL-2407 Overhead 69754.44 Duplicate $69754.44
GL-2408 Depreciation 17772.75 Clean
GL-2409 Overhead 17438.36 Clean
GL-2410 Overhead 13176.82 Clean
GL-2411 Overhead 72799.55 Clean
GL-2412 Depreciation 8476.04 Clean
GL-2413 Raw Materials 82849.26 Clean
GL-2414 R&D 28454.26 Clean
GL-2415 Depreciation 33930.80 Misclassified $4101.10
GL-2416 SG&A 23231.86 Interco Noise $1439.65
GL-2417 Labour 74318.69 Clean
GL-2418 Logistics 55854.76 Clean
GL-2419 Overhead 33421.66 Clean