Finance and Accounting Target based on KPIs set by the Top Management FY2019-2020 for a Newly Established Branch in Mexico

1. Kanepackage Mexico
4TH FY 2019-2020
GOALS & TARGET
Finance & Accounting

2. 4TH FY GOALS & TARGET
USD100
Operating
Income
USD4.3k
Sales per
Head
(44 employees)
USD500K
Regular
Customer
Items
Zero 0
Customer
Complaint
USD400K
Limit
Loan
Amount
70%
Employee
Perfect
Attendance

3. Sales Target = USD2.185M
Material Profit Ratio = 50% of Sales
Direct Labor Cost = 8% of Sales
MOH+ADM Expenses = 42% of Sales
Gross Profit Ratio = 20% of Sales
5. LOAN LIMIT- USD400K
2. SALES PER HEAD-USD4.3K
1. OPERATING INCOME-USD100

4. To Achieve USD2.185M SALES
Optimize CRM by
recommending a software
that could facilitate Customer
Service Monitoring and Real-
time Analytics to ensure that
Kanepackage Values is always
being observed
Modernize Marketing Efforts.
Implement a referral Program
(Customer Reco). Network
more by joining different
Industry activities in the
Automotive Sector. Increase
social media use.
SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG
Target 2019-2020 179 180 179 190 173 172 184 185 185 185 185 189
Actual 2018-2019 102 190 168 126 122 86 228 117 126 137 140 182
SALES
To Achieve the 50% Material Profit Ratio
Find and recommend a software or
database to facilitate COSTING, a
database that keeps all the record
of material prices and logistics
services to automate pricing
(Implementation of Target Costing-
Integrated to Value Engineering)
Initiative to check the
Standard Material Cost and
check on Alternative
Resources (could make our
own Price Comparison from
the information forwarded to
Accounting vs Market)
SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG
Target 2019-2020 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50% 50%
Actual 2018-2019 43% 42% 47% 65% 52% 45% 60% 59% 59% 56% 62% 57%
MPR

5. To Limit the Direct Labor Cost @ 8% of Sales
Efficiently align the need for employee
services, ex. maximize the use of
transport services by assigning
strategic pick-up points (minimal pick-
up points could lessen the cost),
increasing performance thru training,
motivational rewards and regular
performance review.
Carefully review (compare with
the projected operational
requirement) the manpower
request, challenge every request
for additional personnel as we
have to maintain the number of
WF budgeted for this FY
To Limit Expenses (MOH+ADM) to 42% of Sales
Set Specific Reduction Scheme
for Controllable Costs like,
setting a budget per department
on consumables / supplies or
assign specific Cost Centers per
Department for proper cost
allocation, monitoring and
Control
Reduce Business Travel Expenses
and optimize trucking cost thru
Close Coordination, Effective
Scheduling and Careful planning of
deliveries and customer visits -
could maximize each Sales
Personnel’s Time and reduce Gas &
toll fee expenses
SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG
Target 2019-2020 14 15 15 15 15 14 16 16 16 16 16 16
Actual 2018-2019 13 14 15 15 10 9 19 14 13 11 13 12
DIRECTLABOR
SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG
Target 2019-2020 75 75 75 80 72 72 76 76 76 77 77 79
Actual 2018-2019 55 63 56 62 54 59 80 79 81 75 75 80
EXPENSES
(MOH+ADM)

6. To Achieve 20% of Sales Gross Profit Ratio
See Labor and Expenses
Strategies
See Labor and Expenses
Strategies
To Achieve USD100 Operating Income
Close monitoring of the
Budgeted Sales and expenses,
making regular reminder to
Sales and Operations of the
Target for the month and ensure
controls over expenditures –
review and monitoring of
submitted requests for payment
Optimizing employee’s skills thru
regular employee skills assessment
ensuring that skills are aligned to
their assigned tasks, and
considering exchanges of
personnel from one department to
another to meet greater employee
efficiency (job rotation)
SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG
Target 2019-2020 36 36 36 39 34 34 36 36 36 36 36 37
Actual 2018-2019 5 30 33 36 28 3 84 13 22 30 37 53
GROSSPROFIT
RATIO
SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG
Target 2019-2020 7 16 5 5 9 11 5 13 3 9 14 12
Actual 2018-2019 -24 1 7 5 -2 -30 38 -24 -20 -10 -1 12
NETPROFIT

7. Measures the days to
convert Inventory to
Sales (DIO)+ the days
to convert credit sales
to cash (DSO)
Net days to pay the
Suppliers without
incurring penalties
(DPO) – deducted from
the Net Operating Cycle
Cash conversion cycle (CCC) is a metric that
expresses the length of time (in days) that it
takes for a company to convert its
investments in inventory and other resources
into cash flows from sales.

8. Inventory Turnover (ITO) = 8 or Average of 45 Days
Inventory Outstanding (DIO)
Accounts Receivable Turnover (ARTO) = 9 or Average of
40 Days Sales Outstanding (DSO)
Accounts Payable Turnover (APTO) = 9 or Average of 40
Days Payable Outstanding (DPO)

9. Inventory Turnover = 8 or 45 Days
Inventory Outstanding
Improve forecast accuracy,
Set safety stock levels,
Regularly Check Inventory
groups – Fast, Slow and Non-
moving and take necessary
actions like Inquiry with Sales
Team on future projects using
non-moving materials
Set supplier delivery cut-off,
negotiate with Suppliers the
recognition of material
requirement for the next
month – Materials to be used
in the next month should be
delivered or recognized on
that month.
Container
Packaging Q2
2019
Q1
2019
INVTY
T/O
Ratio
6.19 6.04
AR
T/O
Ratio
6.98 7.39
Accounts Receivable Turnover = 9 or 40
Days Sales Outstanding
Revise Credit Policies (ex. For
New Customers require 3
Cash Deliveries before
providing the 30-days credit,
Maintain the policy on
requiring 50% or higher
advance payment for big
projects)
Require Sales/Admin (Make this as
part of their KPI) to allow only 3
working days to request for the
invoice for items already delivered
to customers – Require Verbal PO
for those items already processed
in OPS, coordinate with Acctg
Counterpart for the acceptance of
Verbal PO as Invoice Reference
Accounts Payable Turnover= 9 or 40
Days Payable Outstanding
Leverage on Supplier
Selection Process,
negotiate longer payment
terms. Periodic review of
Payment terms (requesting
longer terms based on
volume or credit status)
Set specific Invoice
Requirement to Trade
Suppliers (Promotes Efficiency
in Processing Invoices). Refuse
to pay inaccurate invoices
(send back to supplier). No
Invoice/NO Payment
Requirement
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