How Does Your Company Account for Prototype Development Costs? (May 2, 2013)

Sarbanes blog photo 217x233 1Another indirect benefit to working with NPI is outsourcing the cost of complying with the Sarbanes Oxley accounting requirement. When prototype development costs are procured with internal resources, the material and its excesses are part of an inventory system that requires warehouse facilities, stock room personnel, quarterly cycle counts and depreciation. All of which can be very costly. The NPI Solution reduces all of those overhead expenses and simplifies the accounting to one expensed PO per development project including managing ISO and AS9100 records to meet SEC accounting and quality requirements.

Imagine having to process 100 purchase orders for a turnkey electronic prototype that includes the following services:

PCB design services and fabrication, PCB components and assembly for a BOM of 100-250 line items, mechanical design and mechanical fabrication of system components, and reliability and functional testing.

The resources to properly account for those 100 purchase orders requires: bonded experienced electronic buyers; warehousing, receiving and kitting personnel to validate, label and properly store the material; and accounting to pay the bills and file the records for corporate accounting audits for five years.

I am not sure who likes NPI services better, the design engineers for direct 24/7 communication, management for immediate status reports on cost and schedules, or the marketing teams for quick-turn quality prototypes demo their latest innovations at global trade conferences. This ease of doing business comes from our experienced, empowered, professional project managers and sales engineers who raise the bar in management and customer service for complex technical development programs. Call NPI today for a real competitive advantage when it comes to TOTAL cost of developing New Products.