Revenue Recognition

Revenue Recognition is becoming more important then anything else. In current environment when a customer demands for free transportation and insurance services, it seems impossibly for vendor to offer. This is because all risk should be transfer before revenue is recognized.

My advice: - Focus on contract negotiation and offer cash discount if your customer request for transportation or insurance.

Invoicing

An account receivables process starts during invoicing activity, communication with operation or alert from shipping system in important for billing department to start an invoice process. With the current environment on revenue reconciliation this process is the most important in controllership.

My advice: Never delay an invoice process because your customer payment term will only start when you issue an invoice.

BOD Meeting

Preparation for BOD meeting critical. The BOD meeting gets complicated if the legal entity is JV or has minority partner. Since the minority partner is not involved in daily operation the BOD meeting give the opportunity to address any issue and concern.

My advice: The standard agenda should be operation overview, financial overview and any important issue or concern to address to board.

Deflation Saving

There is two type of saving, one is hard saving and another is soft saving. Hard saving is deflation in price with the same quality of product and service. Soft saving is when you compare the wining quotation with losing quotation; this is for first time purchase product or service.

My advice: Give your sourcing department an deflation saving target at the beginning of the year and make sure they report all the deflation saving project to finance manager. We as finance manager need to make sure this saving match with productivity saving we report out.

Closing

If the accounting system and business process can work in accordance with reporting standard, statutory rules and tax guideline then we in finance department does not need to work during weekend for closing. But closing the books monthly is very important because it is early indication of the company financial performance before the quarter ends. The timeline of closing is also important, for manufacturing and service company it very important for you to understand when the production cut off.

My advice: If you already identify a journal entry before system cut off then please pass this entry early. This will save you time during the actual closing process.