Warranty and Shop Loss

All accounting rule only define a standard for warranty and shop loss accruals. Accruals can be made when the probability is high and can estimate the dollar amount. But I feel the standard should define that business should have a process to close a warranty or shop loss claims. It should start from raising a claim to closing and finding corrective action. It also should define claims should be closed before the consideration is paid to customer.

Identify Key Project

CEO and HQ define the goals and objective for the business. We as finance manager and CFO usually will plan another goal and objective inline with CEO and HQ goals. I feel it is waste of time for us to prepare another goal and objective, in state we should identify key project that will help us to accomplish the goals and objective. Another key point to note is we need to set numerical target to achieve the goals and objective. Example improve cash flow will be HQ goal, we should set inventory target for 1Q is $MM and past due balance should be less then $MM.

Employee Evaluation

Allot of organization and company ask their manager to evaluate their employee performance and contribution on the past year. But I don’t agree with method. I feel the employee need to evaluate his/her performance first then discuss with their manager. With this method employee would be inline with the company goals and the manager expectation. Also allot of the time the manager and employee focus more on the strength, but the most important item should be development needs. Manager and employee need to be very detail and set project, training or plan on how the employee will work on the development needs identified.

2009 Impact of Employee EOP

It is this time off the year where every employee will be evaluated for their contribution and performance. With current market environment where inflation is lower we cannot expect higher EOP. But in allot of country when fuel price was high it has significantly contributed to higher food prices. Since the food prices did not reduce when oil price reduce to $30 per barrel this has significant impact on employee inflation. With country inflation is calculated differently with employee inflation, sure this have imbalance between EOP and inflation.

My Advice – Employee need to reduce entertainment and extra expense is 2009.