Often drone operations do not have their own cost center and summarizing drone-related expenses is not system supported. If such a situation is acceptable depends on the relative significance of drone expenses and on management focus.
Without a specific cost center for drone operations it will be more difficult for controllers to gather all drone-related expenses as might be necessary when evaluating the costs and benefits of outsourcing proposals.
Actual expense reports with comparisons against budget or against previous periods help to identify cost improvement opportunities. They also are also a form of internal control, since significant differences get highlighted and attract attention.
If drone-related expenses are part of a much bigger cost center or budget it makes it easier for drone-related expenses which should attract management attention (e.g. write-off expenses, fines) to go unnoticed.
- Inefficient allocation of company resources.
- Review the suitability of the cost center structure to analyse drone operation costs.
- Review monthly expense reports related to drone operations.
- Review the budgeting process for drone operations.
- Analyse actual vs budget reports and understand deviations.