Reporting for operation

Copyright © Wondershare Software

Reporting for OperationFinance Perspective

道 ,可道 , 非常道 ;名 ,可名 ,非常名

Dick Lam Dec 2013


I am always a junior manager

Detail + Logic » Flexibility

• I only focus on figures which is related to daily operation

• I don’t have any strategic thinking; rather, just deal with reporting of expenses, staff turnover, absenteeism, canteen, dorm, daily sales, daily scrap & all trivial stuffs; above all, asking people do what they should do

• To certain extent, my work is rather lame to senior management; I don’t say anything presentable!

• I am just summarizing/restating something you have ever heard before

知人者智，自知者明


This is me…

• BBA in Accountancy (HKBU)

• Master of Arts in E-Business (CityU)

• Fellow of ACCA

• Worked in various MNC and industries, mainly manufacturing in mainland China, focus on management accounting, business strategy, tax planning, supply chain management and new business setup in PRC

• 2010~2011, Consultant in a US consulting company for a countrywide supply chain project

• Now, Director of Business Process of a US mfg co.



Contact Details

Mr. Dick Lam Chor Ki

[email protected]

http://dicklam128 .wordpress.com

http://www.box.net/dicklam128



Agenda

1. The right attitude towards Pandora Box

2. 4 Critical Accounting Principles

3. What is Operational Risk?

4. Tactics of Reporting

5. What to report?

6. Plan-Do-Check-Act

7. Connotation



The Paradox


• Black Swan – usually the mundane/ignorance defeat you

• Theory of Constraint (TOC)– When it is embarrassingly right, it must be correct

• The paranoiac help you excel your peers

• Iatrogenic– If you don’t know how to fix it, your “effort” would

exacerbate the situation

But you can buy the talents to solve it…


The right attitude towards

Pandora Box



Pandora’s Box - Iatrogenic

• Problems has existed, not days ago but years ago

• If you do not point it out, the result is revealed only when it becomes fatal

• If you point it out, you will be hatred by people as you hinder their comfort zone

• Don’t be silly that you can fix the issues by yourself and overnight

Detail + Logic » FlexibilityBut at least, you wake people up….


Heuristic Question


Passion

Perseverance

OR


Human Nature

Detail + Logic » FlexibilityWe name Reminder as Customer Service


Inertia - The Fatal Illness

• Threshold – a fine line which below that you do not feel the importance while above which you do feel it.

• Materiality – Limited resources, focus on the variance which would influence Profit Making significantly

• Therefore, prioritize the job and only do the few things

• As time goes by, prioritization becomes the excuse of ignorance



Stimulus → Response

Imitation

1

2 4

3 5

Practice

Retrospect/Introspect

Iteration

Memory to Reflection

• One of the Human trait is learning• Learning is:

Detail + Logic » FlexibilityStimulus → Object → Response


Learning

• A process of searching for and integrating new information to make sense out of disorientation

• Peter Senge writes:– Through learning we recreate ourselves– Through learning we become able to do something we

never were able to do– Through learning we re-perceive the world and our

relationship to it– Through learning we extend our capacity to create, to be

part of the generative process of life

Detail + Logic » FlexibilityCollaboration: learning from each other…..


Essence of Lean Manufacturing

• 5 S

• 5 Why

• 7 Waste (+1)

• Aggregation of small improvements to significant change

• Kaizen force from every corner

• Persistence



Only the right detail matters


• Root Cause Analysis often tells that only the trivial matters and usually the symptom is ignored

• RCA is almost equivalent to 5-Why technique– Why the productivity drops?

• Repeat the question of Why to any answer until the root cause is found

• Only the daily down-to-earth operation matters

BA


4 Accounting Principles


1. Matching– Match the cost/expenses with the related revenue at the same

reporting period

2. Accrual/Provision– Expenses/Revenue is recorded when the service/goods is

delivered or consumed, not when it is paid(cash basis)

3. Materiality– Focus is posed on figures/% which would matter

4. Conservatism– Recognize –ve (mainly expenses/cost) in advance if foreseeable

but no +ve to be reported

Simple, Direct & Straightforward


Manager = Messenger ?!

• It is a joke, in the past

• It is no longer a joke, in the meantime

• Duties of Managers:– Collaborate the right persons to work out– Deliver timely and relevant information– Work out the platform to provide information to team– Get the result from operation and present to senior

management

Detail + Logic » FlexibilityConfidence is a feeling…..


How information is functioning?

Activities Transaction Records

Reporting /AnalysisDecision Rules



What is Operational Risk?


• Operation not in proper/desired flow

• Cost/Expenses/Inventory/AR going up

• Symptom emerges, if it is not fixed, EBITDA will be negatively affected

• Corrective action not at the right time

• Usually, not sufficient investment in platform including HR/system


Where are the Operational Risk?

• Sales• Materials• Labor• Overhead• Cash• Inventory• Accounts Receivable• Accounts Payable• Others


How?


Critical Indicators

• Key Performance Indicators– The higher the better– Return on equity

• Key Risk Indicators– The lower the better– Overdue Debt to A/R

Detail + Logic » FlexibilityAnything else?


The Tactics

• Start from the Low-Hanging-Fruit

• Share the information with everyone

• Use different Senders and specify the responsible

staff/department

• Automate the reporting process

• Raise The Question

• Praise the person who generate the report

Detail + Logic » FlexibilityManipulate the stimulus & control the Perception


Code of Excel Report

• Use protection if restriction is needed• Border improves legibility• Put the total at the top, not bottom• Consistent decimal places• Freeze the panes• Use data group to shrink minor columns• Be reminded to remove external links• Use color to highlight critical• Limited columns, hide unnecessary worksheets• Using Data->Group


5S

Double-Click to bring to the detail


Drill Down

Comment

Raw Data

Summary

Detail

Working



Defend why U need the reports…

• Not everybody knows the usage of all reports

• No value of rolling out 100 reports

• Takes time to permeate the reports’ value to the users, readers and follower

• Format is everything

• Stimulus => Response is a must

Detail + Logic » Flexibility夫唯不爭，故無憂


Report Examples



Sales



Sales – Indicators/Reporting

• Daily Sales– as detail as possible, by customer by product by

day– with comparison to Sales Forecast

• Monthly Sales Forecast– By Customer, By Product

• YTD Sales Report– with comparison with Sales Budget

Detail + Logic » FlexibilityFormat can influence readers’ perception


Daily Sales Report

• Fields to include– Customer code & Name– Current Month Forecast, Month-to-date

achievement & % of accomplishment for each customer

– Overall % of accomplishment vs. MTD target– Customer Service and Sales & Marketing– Outstanding/Overdue Customer Orders Amount

with remark of date deferral



Why Daily Sales Report?

• Tell everybody where we are so as to create sense of urgency

• Point out who are responsible and they should be stared at

• Highlight what are the problems

• Alert the stakeholders that how much and how long we lag behind

• Reveal if there is risks/opportunities

• Finally, react at the right time / promptly



What is more?


We need ACTION!!


Monthly Sales Forecast

• Forecast is the update feasible/achievable target• Latest Forecast vs. Budget Target• What has emerged? submerged?• What happens with the customer?• What happens with the products?• What else will be for the rest of the year?• Any contingency?


What’s up?


YTD Sales Report

• Why do we still need a separate YTD Sales Report?

• Why not combined to Monthly / Daily Sales Report?



Then, 5W1H

• What is it telling?

• Why is it so bad or really good?

• Who should be responsible?

• Where to fix?

• When to fix?

• How to fix?

Detail + Logic » FlexibilityThere is no novelty under the sun……

then

If…

else


Hot Potato / Musical Chair

Detail + Logic » FlexibilityBlame Culture?!


Gross Margin Reports

• Gross Margin By Customer, By Product, By Month

• GM Comparison between Actual and Forecast/Budget

• Bridge of Budget/Forecast to Actual

Detail + Logic » FlexibilityPerception could be nurtured…


Why not combine the above 2?

• Different readers should have different perspective

• Not everybody could read massive information and think

• Too many focus means no focus

• Drill-down approach predominates

• Management by Exception

Detail + Logic » FlexibilitySimplicity is the ultimate sophistication


NPI Sales Progress Report

• Tracking the New Products Introduction sales progress

• Assess the beginning year of sales and the annualized sales

• What/how much has been sold and what/how much remain to be sold

• Evaluating the possibility of sales realization

• Checking the SOP (start of production) date and see if there is anything going awry with the NPI schedule

• Remarking the deviation and checking performance of related departments



What does Sales/GM report tell?

• Different time frame to tell where the business is going to

• Understand how product mix affect your profitability

• Sales trend should be the focus of everybody– Is there anything you do not do well?

• Only the right person could survive!



Production & Materials



What are the issues of Production?

• Lower Production Output• Too many WIP• Unclear WIP• Too many Job Order opened• Too many scrap• Too many DL/IDL• Too many unproductive hours



Production Output


Equivalent Units?!


WIP Report



Overdue Work Orders


Subject: Materials Closure Alert – Day1


Subject: Materials Closure Alert – Day2



Materials Scrap

X = Issued – Used – Transfer + Returned – Scrap

What is X?

What is missing?

What is needed?


Why WIP alw

ays

a problem?


Materials Scrap



Production Materials Handling System

• Enquiry the Materials Status by Job Order

• What have been– Issued– Returned– Scrapped– Transfer (which job orders can use this RM?)

• What & how many left to issue?

• Program to transfer RM between orders

Detail + Logic » FlexibilityUsers: Line Leaders


Illustration of PPV

• PPV = Standard Cost – Purchase PriceBudget

RM: IC-xEUR 1.20 EUR: HKD 9.50 HKD 11.40 ==> Standard Cost 11.40

Scenario 1EUR 1.20 EUR: HKD 9.50

Purchase Cost in HKD 11.40

PPV: -

Scenario 2EUR 1.26 EUR: HKD 9.05

Purchase Cost in HKD 11.40

PPV: -

PPV = Net PPV + Exchange Difference

Net PPV: = (1.20 - 1.26) * 9.50(0.57)

Exchange Difference: = (9.50 - 9.05) * 1.260.57



Purchase Price Variance


Dickson CompanyPurchase Price Variance ReportFor the month of Oct 2010Cur: HKD

PPV due PPV dueStd Tran. Purchase to Fx Amt to Price Amt

Part No. Description Unit Cost Ex Rate Cur Price Vendor Cur Ex Rate Price Qty Amount F/(U) F/(U) % F/(U) F/(U) %111-EW-015 OVERSEAS UL 1" PEWTER WEBBINGyd 0.4500 1.0000 HKD 0.4500 LIPIND HKD 1.0000 0.4500 5,000 2,250 - - 0.0% - - 0.0%4011116058 WOVEN TAG-STEARNS pcs 0.4687 1.1431 CNY 0.4100 WSE CNY 1.1375 0.4000 6,800 2,720 0.0022 15 0.5% 0.0114 78 2.4%4011116058 WOVEN TAG-STEARNS pcs 0.4687 1.1431 CNY 0.4100 WSE CNY 1.1375 0.4000 188,450 75,380 0.0022 418 0.5% 0.0114 2,154 2.4%4011116059 WOVEN TAG - V FLEX pcs 0.1257 1.1431 CNY 0.1100 WSE CNY 1.1375 0.1100 1,900 209 0.0006 1 0.5% - - 0.0%111-BI-104 1" WHT VINYLBINDING(MATERIAL WIDE)kg 0.3487 1.0000 HKD 0.3487 WSE CNY 1.1375 0.2976 3,210 956 (0.0409) (131) -11.7% 0.0511 164 14.6%111-BU-060-01 1" WHITE WASR-25 UL BUCKLE (OPEN)pcs 0.2829 7.7500 USD 0.0365 SITW USD 7.7646 0.0365 1,500 55 (0.0005) (1) -0.2% - - 0.0%111-BU-060-01 1" WHITE WASR-25 UL BUCKLE (OPEN)pcs 0.2829 7.7500 USD 0.0365 SITW USD 7.7646 0.0365 1,500 55 (0.0005) (1) -0.2% - - 0.0%111-BU-060-01 1" WHITE WASR-25 UL BUCKLE (OPEN)pcs 0.2829 7.7500 USD 0.0365 SITW USD 7.7646 0.0365 1,500 55 (0.0005) (1) -0.2% - - 0.0%111-CO-800 SVO WHITE POCKET FLANNEL yd 5.1440 1.1431 CNY 4.5000 WSE CNY 1.1375 4.5000 664 2,988 0.0250 17 0.5% - - 0.0%111-FA-003 HANGTAG/BOOKLET FASTENER pcs 0.0044 1.0000 HKD 0.0044 CHAMPION HKD 1.0000 0.0044 1,000,000 4,400 - - 0.0% - - 0.0%111-AL-062 OVRSEA RAMP.LION CRES WOV.LABLpcs 0.4316 1.1431 CNY 0.3776 WSE CNY 1.1375 0.3800 2,450 931 0.0021 5 0.5% (0.0027) (7) -0.6%111-AL-062 OVRSEA RAMP.LION CRES WOV.LABLpcs 0.4316 1.1431 CNY 0.3776 WSE CNY 1.1375 0.3800 13,500 5,130 0.0021 28 0.5% (0.0027) (37) -0.6%111-AL-810-06 2006 WOVEN STEARNS, NECK LABEL/tepcs 0.1486 1.1431 CNY 0.1300 WSE CNY 1.1375 0.0500 450 23 0.0003 0 0.2% 0.0914 41 61.5%111-AL-811-06 2006 WOVEN STEARNS,ZIPPER PULL/tepcs 0.1992 1.1431 CNY 0.1743 WSE CNY 1.1375 0.1700 250 43 0.0009 0 0.5% 0.0049 1 2.5%111-TH-007 WONDER PET POLY E RED THRD#693dz 0.0100 7.7500 USD 0.0013 WPET USD 7.7646 0.0013 2,188,800 2,757 (0.0000) (40) -0.2% 0.0002 520 2.4%111-TH-013 WONDER PET POLY E WHITE THRD #202dz 0.0100 7.7500 USD 0.0013 WPET USD 7.7646 0.0013 3,283,200 4,136 (0.0000) (60) -0.2% 0.0002 781 2.4%111-TH-017 WONDER PET POLY E FOR GRN #611dz 0.0100 7.7500 USD 0.0013 WPET USD 7.7646 0.0013 547,200 689 (0.0000) (10) -0.2% 0.0002 130 2.4%111-TH-059 WONDERPET-PET RUSSET #566 yd 0.0100 7.7500 USD 0.0013 WPET USD 7.7646 0.0013 1,094,400 1,379 (0.0000) (20) -0.2% 0.0002 260 2.4%111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 1.0000 HKD 0.4200 LIPIND HKD 1.0000 0.4200 15,000 6,300 - - 0.0% - - 0.0%111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 1.0000 HKD 0.4200 LIPIND HKD 1.0000 0.4200 15,000 6,300 - - 0.0% - - 0.0%111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 1.0000 HKD 0.4200 LIPIND HKD 1.0000 0.4200 2,000 840 - - 0.0% - - 0.0%111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 1.0000 HKD 0.4200 LIPIND HKD 1.0000 0.4200 5,000 2,100 - - 0.0% - - 0.0%111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 1.0000 HKD 0.4200 LIPIND HKD 1.0000 0.4200 15,000 6,300 - - 0.0% - - 0.0%

Target Purchase


Order Allocation


Dickson CompanyOrder Allocation Report

Cur: HKD

Std Qty

Part No. Description Unit Cost Rec'd Code Cur Price Qty Rec

% Scoring

% O/(U)

Qty Code Cur Price Qty Rec

% Scoring

% O/(U)

Qty 111-EW-015 OVERSEAS UL 1" PEWTER WEBBING yd 0.4500 5,000 LIPIND HKD 0.4500 4,000 80% 80% - XYZWA HKD 0.4500 1,000 20% 20% - 4011116058 WOVEN TAG-STEARNS pcs 0.4687 6,800 WSE CNY 0.4000 6,800 100% 80% 1,360 ABC CNY 0.4000 - 0% 20% (1,360) 4011116058 WOVEN TAG-STEARNS pcs 0.4687 188,450 WSE CNY 0.4000 150,000 80% 80% (760) ABC CNY 0.4000 30,000 16% 20% (7,690) 4011116059 WOVEN TAG - V FLEX pcs 0.1257 1,900 WSE CNY 0.1100 1,500 79% 80% (20) ABC CNY 0.1100 400 21% 20% 20 111-BI-104 1" WHT VINYLBINDING(MATERIAL WIDE) kg 0.3487 3,210 WSE CNY 0.2976 3,000 93% 80% 432 ABC CNY 0.2976 210 7% 20% (432) 111-BU-060-01 1" WHITE WASR-25 UL BUCKLE (OPEN) pcs 0.2829 1,500 SITW USD 0.0365 1,000 67% 80% (200) LISAB USD 0.0365 500 33% 20% 200 111-BU-060-01 1" WHITE WASR-25 UL BUCKLE (OPEN) pcs 0.2829 1,500 SITW USD 0.0365 800 53% 80% (400) LISAB USD 0.0365 700 47% 20% 400 111-BU-060-01 1" WHITE WASR-25 UL BUCKLE (OPEN) pcs 0.2829 1,500 SITW USD 0.0365 800 53% 80% (400) LISAB USD 0.0365 700 47% 20% 400 111-CO-800 SVO WHITE POCKET FLANNEL yd 5.1440 664 WSE CNY 4.5000 500 75% 80% (31) ABC CNY 4.5000 164 25% 20% 31 111-FA-003 HANGTAG/BOOKLET FASTENER pcs 0.0044 1,000,000 CHAMPION HKD 0.0044 750,000 75% 80% (50,000) BPION HKD 0.0044 150,000 15% 20% (50,000) 111-AL-062 OVRSEA RAMP.LION CRES WOV.LABL pcs 0.4316 2,450 WSE CNY 0.3800 2,450 100% 80% 490 ABC CNY 0.3800 - 0% 20% (490) 111-AL-062 OVRSEA RAMP.LION CRES WOV.LABL pcs 0.4316 13,500 WSE CNY 0.3800 10,000 74% 80% (800) ABC CNY 0.3800 3,500 26% 20% 800 111-AL-810-06 2006 WOVEN STEARNS, NECK LABEL/te pcs 0.1486 450 WSE CNY 0.0500 450 100% 80% 90 ABC CNY 0.0500 - 0% 20% (90) 111-AL-811-06 2006 WOVEN STEARNS,ZIPPER PULL/te pcs 0.1992 250 WSE CNY 0.1700 240 96% 80% 40 ABC CNY 0.1700 10 4% 20% (40) 111-TH-007 WONDER PET POLY E RED THRD#693 dz 0.0100 2,188,800 WPET USD 0.0013 1,100,000 50% 80% (651,040) SQET USD 0.0013 1,088,800 50% 20% 651,040 111-TH-013 WONDER PET POLY E WHITE THRD #202 dz 0.0100 3,283,200 WPET USD 0.0013 3,000,000 91% 80% 373,440 SQET USD 0.0013 283,200 9% 20% (373,440) 111-TH-017 WONDER PET POLY E FOR GRN #611 dz 0.0100 547,200 WPET USD 0.0013 500,000 91% 80% 62,240 SQET USD 0.0013 47,200 9% 20% (62,240) 111-TH-059 WONDERPET-PET RUSSET #566 yd 0.0100 1,094,400 WPET USD 0.0013 500,000 46% 80% (375,520) SQET USD 0.0013 200,000 18% 20% (18,880) 111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 15,000 LIPIND HKD 0.4200 15,000 100% 80% 3,000 XYZWA HKD 0.4200 - 0% 20% (3,000) 111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 15,000 LIPIND HKD 0.4200 15,000 100% 80% 3,000 XYZWA HKD 0.4200 - 0% 20% (3,000) 111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 2,000 LIPIND HKD 0.4200 2,000 100% 80% 400 XYZWA HKD 0.4200 - 0% 20% (400) 111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 5,000 LIPIND HKD 0.4200 5,000 100% 80% 1,000 XYZWA HKD 0.4200 - 0% 20% (1,000) 111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 15,000 LIPIND HKD 0.4200 10,000 67% 80% (2,000) XYZWA HKD 0.4200 5,000 33% 20% 2,000 111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 15,000 LIPIND HKD 0.4200 10,000 67% 80% (2,000) XYZWA HKD 0.4200 5,000 33% 20% 2,000 111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 15,000 LIPIND HKD 0.4200 10,000 67% 80% (2,000) XYZWA HKD 0.4200 5,000 33% 20% 2,000 111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 13,000 LIPIND HKD 0.4200 10,000 77% 80% (400) XYZWA HKD 0.4200 3,000 23% 20% 400 111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 10,000 LIPIND HKD 0.4200 10,000 100% 80% 2,000 XYZWA HKD 0.4200 - 0% 20% (2,000) 111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 2,000 LIPIND HKD 0.4200 2,000 100% 80% 400 XYZWA HKD 0.4200 - 0% 20% (400) 111-EW-002 SVO UL 1" WHITE WEBBING yd 0.4200 15,000 LIPIND HKD 0.4200 15,000 100% 80% 3,000 XYZWA HKD 0.4200 - 0% 20% (3,000)

Primary Vendor Other Vendor - 1


Labor



Labor Definition

• Direct Labor– Normal Workforce/Work-in-process Quality

Check/Material handlers/Manpower to setup

• Indirect Labor– Shop Floor Management

• Salary Labor– For all non-direct & non-indirect



Labor Statistics



OT Application



Labor Structure & Ratio


Dickson CompanyLabor Span of Control

Dept DL IDL SL Total DL IDL SL TotalMgt - - 4 4 - - 4 4 HR - - 25 25 - - 23 23 Finance - - 7 7 - - 7 7 IT - - 5 5 - - 5 5 PMC - 10 10 - 10 10 WH & Logistics - 20 5 25 - 19 6 25 Purchasing - - 6 6 - - 6 6 Engineering - - 25 25 - - 24 24 Production - -

WC-1 150 10 2 162 132 9 2 143 WC-2 200 12 3 215 194 13 3 210 WC-3 133 8 2 143 120 7 2 129 WC-4 220 12 2 234 230 13 2 245 WC-5 50 3 - 53 45 4 - 49 WC-6 80 5 1 86 76 6 1 83 WC-7 100 10 3 113 93 8 3 104 WC-8 75 12 1 88 65 11 1 77

Subtotal 1,008 72 14 1,094 955 71 14 1,040 DL/IDL 14.00 13.45

DL/(IDL+SL)Total H/C 1,008 92 101 1,201 955 90 99 1,144

DL/IDL 10.96 10.61 DL/(IDL+SL)

Total Cost 'k 2,568 442 758 3,767 2,433 432 743 3,608 DL/IDL 5.82 5.63 DL/(IDL+SL)

Jan-10

11.72

5.22

2.14

Feb-10

11.24

5.05

2.07


Labor Allowance Factor

• Labor Hours – derived by Industrial Engineers

• Paid Labor Hours

• Allowance Factor = 1 – Labor Hours / Paid Labor Hours

• Measure non-productive hours



Weekly Income Statement

• Why?• What should be included?

– Sales– Cost– Expenses– Inventory– Productivity– Quality– What else?



Inventory



Accounts Receivable

• A/R Aging• Probable Over-credit Report• Bad Debt to Sales / Bad Debt Movement



Weekly Cash Flow forecast

Asia Harness Week Week 45 Week 46 Week 47 Week 48 Week 49 Week 50 Week 51 Week 52 Week 53 Week 54 Week 55Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast

10/26/08 11/2/08 11/9/08 11/16/08 11/23/08 11/30/08 12/7/08 12/14/08 12/21/08 12/28/08 1/4/09 1/11/09

Beginning Cash 226 226 441 122 422 292 292 58 258 105 146 476

VAT Receipts - - - - - - - - - - - - Other Receipts - Cash Receipts (A/R collections) 100 100 100 10 100 100 100 41 100 138

Total Cash Inflows - 100 100 100 10 - 100 100 100 41 100 138

Cash Payments (A/P Checks and wire transfers) (1,197) (1,919) (1,100) (1,100) (1,277) (1,200) (1,713) (1,000) (1,270) (1,100) Payroll (200) (40) (200) (40) Capital expenditures (188) (57) Other nonworking capital itemsVAT PaymentsTax PaymentsOther Payments

Total Cash Outflows - (1,385) (1,919) (1,300) (1,140) - (1,334) (1,400) (1,753) (1,000) (1,270) (1,100)

Loan / (Excessive cash) 1,500 1,500 1,500 1,000 1,000 1,500 1,500 1,000 1,500 1,000

Total Intercompany - 1,500 1,500 1,500 1,000 - 1,000 1,500 1,500 1,000 1,500 1,000

Interest - - - - - - - - - - - - Principal - - - - - - - - - - - -

Total Financing - - - - - - - - - - - -

Other - - - - - - - - - - - -

Ending Cash 226 441 122 422 292 292 58 258 105 146 476 514

Detail + Logic » FlexibilityReport of Accounts Payable??


Do you want to know more?

• DPPM, Internal & External• 1 Pass Rate• Customer Complaint• FIFO• Downtime• ……


Your Decision!!


How strong are you?

• Plan: Do you plan for any objection or refusal?

• Do: Can you persevere? Can you do it if other people do not do? Any plan B?

• Check: Can you sort out the abnormalities or exceptions from these figures?

• Act: Will you override yourself?

Detail + Logic » FlexibilityDo you know the business and the operation?

Copyright © Wondershare SoftwareDetail + Logic » Flexibility知者不言 , 言者不知

Connotation

Your text here


How would people look at U?

• This guy is only focusing on data, not people

• This guy knows nothing about the business, rather, play game with data

• This guy cannot handle crisis; if there is labor strike or customs inspection, he must be the first one running away

• We need to hire more people to fulfill her/his requirement

• Anyway, he is nothing but management; I have to entertain him/her!

• Jesus, when will he/she leave the company???

Detail + Logic » Flexibility勝人者有力，自勝者強


Think Different

SIX THINKING

HATS

NegativesCaution

LogicFaults Danger

JUDGEMENT

ObserveObjectives

GoalRules

Big picture

MANAGE

FeelingIntuitionEmotions

Don't rationalizeDon't justify

EMOTIONS

PossibilityNew Ideas

AlternativesConceptsGrowth

CREATIVITY

OptimismPositivesBenefits

Make it workValues

BRIGHTNESS

INFORMATIONFacts

InformationDocumentation

Known/UnknownNo options

Detail + Logic » FlexibilityThink Ahead


The purpose of the hats

Used to unscramble thinking so that a thinker is able to

use one thinking mode at a time – instead of trying to do

everything at once



Intuition & a method

• “If you don’t have intuition, no method will help you.

• But if you do have intuition, you can still flounder. • Intuition is a necessary condition for finding

solutions• You must have a method to unleash, focus and

critique your intuition if you want to arrive at practical, simple solutions.”

----It’s not luck



Common Sense

• Something only if it is in line with our own intuition

• But, there is so often the need for an external trigger to help us realize something that we already knew intuitively


» What is your common sense?

» What is the common sense of your organization?

» Any common language then?


Any strategy to create the common sense for your

organization?



Your assumption on people

• The way you look/treat the people, the people you would hire

• Every dog has its own day

• Stimulus -> Object -> Response

• Brain vs. Hand



Loyal

Listener

Energetic

Accomplishment

Honest

Passionate

Helpful

Proactive

Respectful

Strategic

Reliable

LEA ED RSH I P



Incumbent Effect

• Everyday should be the same

• Don’t change the life/work style

• Already too busy for any new job task

• Novelty is 2-edge sword: goodness associates with badness

• Are you sure you can implement the change effectively?

• If it ain’t broke, don’t fix it

Detail + Logic » FlexibilityCan change be the objective?


Keep the momentum

• Who is losing momentum?• Why?

– Is it due to frustration with the management?– Is it due to longstanding with the same position?– Is it due to lack of challenge/change?– Is it due to poor perception of prospect?

• Are you determined to keep the momentum?– Plan-Do-Check-Act– There is no 1-click action

Detail + Logic » Flexibility善用人者 ,為之下


Introspection of Finance Operation

• Is it functioning well?– Do all expenses book at right time?– Are there too many accruals? Why not get the billing

on time?– Are there too many provisions? Why not get book the

actual expenses?– What is the basis of the provisions? Are they agreed?– Are the finance people know the business and

operation?



Complaints

• Why are my expenses claim always reimbursed 1 month after the submission?

• Why are the Financial Controller/Finance Manager only raising question without constructive and workable solution?

• What are they doing? They always OT but I don’t know any operation improvement brought out by them.

• Rumor: they get decent package but I don’t!!



Can An Accountant manage factory operation?



Yes, because …

• Data-driven vision leads to pragmatic attitude

• Conservative which reduces risk exposure of the company

• Details + logic enable flexibility

• All activities becomes accountable



No, because ….

• Stingy

• Not sensitive to people care and people management

• Only look at figure on every paper and less patient enough

• The figure cannot be creative itself, it is only a tool for revelation of the reality



The correct perspective

• The figure cannot tell how to re-structure the organization, it can only tell who is not qualified to work on index

• But problem is usually originated from improper construction of platform



Do you think …

The lack of financial knowledge is the bottleneck of your personal career development and your organizational development as well



Epilogue

• Create the platform of socialization within the organization (Organizationalisation)

• Principles to assimilate– Collaborative– Rational Thinking– Data first, Modeling second, Action third and

Review final– Knowledge Transparency



Power

Should always be distrusted, in whatever hands it is placed

Sir William Jones



• Exclusive possession of knowledge creates power with the possessors

• Power distance inhibits square exchange of idea, knowledge, respect and trust

• Good player of figure is short-lived power player



Secularization of Knowledge

• Finance & Accounting

• Supply Chain

• Quality Assurance

• HRM

Detail + Logic » FlexibilityShould we secularize hierarchy?


Empowerment

• Figure/Index can serve as the basis of being empowered

• It also represents being entrusted with expected result (of course, reasonable expectation)

• Principal & Agent need the bridge



Financial knowledge/information

• A tool to bridge different functions to the objective

• Good use of it can help empowerment of staff



Do your own

Organizationalisation



If we still have time, talk about:


• MOQ report• Forecasted Income Statement• BOM Cost Comparison by version• Can we use Excel as an input template for ERP

system?• …..