| Introduction| Glossary| |

M&T for routine exception reporting

A mature M&T scheme should be able to pinpoint unusually high consumption. A weekly or monthly review is normal. One convenient method of reporting exceptions is the overspend league table, which looks like this:

The overspend league table provides a priority list for the manager's attention. He or she merely needs to check what has floated to the top of the list, and put investigations in hand if the cost justifies it. That's an important point. Schemes which rank exceptions by percentage draw attention to the wrong problems. Sometimes, there may be nothing worth pursuing, regardless of the percentages. Best-practice reporting focusses on the cost of exceptions.

Logic and procedures behind the overspend league table

The steps required to calculate and report exceptions are:
  1. Measure the actual consumption
  2. Calculate the corresponding target (Click here for more on targets)
  3. Subtract target from actual
  4. Multiply the result from step 3 by the unit price
Having thus computed the cost of the differences between actual and target consumption, rank the results in descending order of excess costs.