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Introduction to FP&A and Finance

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Page 1: Introduction to FP&A and Financectcmanager.onboardingtoolkit.com/pl/doc/Finance... · • Denote cost centre number on the invoice. • Based on type of expense, denote account number

Introduction to FP&A and Finance

Page 2: Introduction to FP&A and Financectcmanager.onboardingtoolkit.com/pl/doc/Finance... · • Denote cost centre number on the invoice. • Based on type of expense, denote account number

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Agenda

• Introductions

• Teams Within Finance

• The Big Picture

• Reporting & Analysis by FP&A Corporate Functions

• Accounting Procedures

• Forecasting Process & Timelines

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Finance Team

Financial Planning & Analysis – Corporate Functions

•Support Corporate Functions – Finance, HR & Corporate Development, Corporate Affairs, Legal, CEO, and Unallocated Items

•Planning & Forecasting (Hyperion training, cost centre reports etc.)

•Quarterly and monthly reporting

•Financial and Variance Analysis

•CBAs

•Ad Hoc requests

•Team: Brad Drew (AVP x7623), Sandra Lau (Manager x6949), Novia Ng (Financial Analyst x4588), Maja Piasecka (Financial Analyst x3663)

Accounting

•Review coded invoices, verify details, forward invoices to Accounts Payable for payment

•Manage and record prepaid and accruals based on instructions from cost centre manager

• Investigate inquiries and post journal entries accordingly

•Provide backup for entries when requested

•Team: Rick Laidlaw (AVP x8466); Greg Kinch (Manager x3592); Francis Mendoza (Project Accountant x3143), Elaha Kawa (Senior Financial Analyst x8842)

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The Big Picture

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CFO Report

• CFO report provides quarterly results by Business Unit.

• The report is consolidated and analyzed by the Corporate Reporting & Analysis team.

• It is finalized by Day 13 by the team and sent for review.

• The final report is presented by the CFO to the Board members a month after the quarter ends.

• Examples of key topics presented in the report are: • Consolidated CTC Results

• Outlook for the Balance of the Year and Current Year Forecast

• Retail Segment Results

• Financial Services Segment Results

• Investor Relations Update

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Monthly Review Package

• The Monthly Review Package presents the monthly results by Direct Accountable Officer.

• Actuals versus Plan and Prior Year with commentaries.

• Various CTC wide financial metrics are presented, including POS Sales.

• The package is reviewed by the Executive team on Day 12 after month-end.

• FP&A Corporate Functions: Provides commentaries for any variances in operating expenses. These commentaries are incorporated into the Monthly Review Package.

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Monthly Review Package – May

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Monthly Review Package – May

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Reporting & Analysis by

FP&A – Corporate Functions

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• Monthly and YTD results by categories for each AVP

• Includes commentary with insights on monthly and YTD variance versus latest forecast.

• Reviewed by VPs and sent to Duncan Fulton before the monthly executive review meeting

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Monthly Package

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YTD May Corporate Affairs by Expense Category

(in Thousands) Total Year Total Year

2012A 2013P 3+9F 2013A 13A vs. 13F 13A vs. 13P 13A vs. 12A 2012A 2013P 3+9F 2013A 13A vs. 13F 13A vs. 13P 13A vs. 12A 3+9F 2013P

Wages and Salaries 488 492 477 476 1 16 12 2,535 2,564 2,379 2,403 (23) 161 132 6,160 6,444

Benefits 168 168 164 162 2 6 7 884 874 816 819 (3) 56 65 2,112 2,193

Personnel Expenses 656 660 641 638 3 22 18 3,419 3,438 3,195 3,221 (26) 217 197 8,271 8,637

Memberships (1) 7 9 0 8 6 (1) 140 34 50 40 10 (5) 100 118 85

Training 2 3 4 2 2 0 (1) 10 15 13 27 (14) (13) (17) 47 36

Other HR costs 0 - (1) 35 (36) (35) (35) 0 - (2) 35 (37) (35) (35) (10) -

Human Resource Costs 1 9 12 38 (26) (28) (37) 149 49 61 102 (41) (53) 47 155 121

Consulting Fees 84 124 127 (10) 137 134 94 304 613 601 525 76 89 (221) 1,499 1,399

Other General & Admin 256 46 66 40 26 6 216 537 410 737 682 55 (272) (145) 1,215 1,156

Donations 53 8 8 - 8 8 53 1,859 2,075 2,053 2,000 53 76 (141) 2,419 2,420

General & Admin 392 177 201 29 172 148 363 2,700 3,099 3,391 3,207 185 (108) (507) 5,133 4,975

Dlr Comm Production 116 66 66 47 19 19 69 382 345 415 396 19 (51) (14) 924 854

Dealer Recovery (112) - - 54 (54) (54) (166) (413) - (182) (275) 93 275 (139) (182) -

Net Dealer Comm 3 66 66 101 (35) (35) (97) (32) 345 233 121 112 224 (153) 742 854

Events 263 100 122 1,290 (1,169) (1,190) (1,027) 848 4,528 1,904 3,069 (1,165) 1,459 (2,222) 2,598 5,025

Events Recovery (5) - - (1,009) 1,009 1,009 1,004 (36) (4,140) (1,956) (2,941) 985 (1,199) 2,905 (1,956) (4,140)

Net event costs 258 100 122 281 (159) (181) (23) 812 388 (51) 128 (180) 260 684 642 885

General Office 251 94 96 115 (18) (21) 136 882 486 691 643 48 (157) 239 1,420 1,193

IT Costs 12 12 12 - 12 12 12 44 61 26 15 11 46 28 114 149

Promotion Items 5 - - 0 (0) (0) 5 5 - 3 8 (5) (8) (3) 3 -

Travel and Entertainment 73 64 60 77 (17) (13) (4) 287 271 291 292 (2) (22) (6) 713 662

Sundry Costs 8 1 1 7 (6) (6) 1 35 7 6 10 (4) (3) 25 16 17

Other - (Gain/Loss) - - - - - - - - (5) - - - (5) - - -

Non-Personnel (Other) Expenses 1,003 523 570 647 (77) (124) 356 4,882 4,706 4,651 4,527 124 179 355 8,937 8,857

Depreciation 1 1 2 2 (0) (1) (1) 5 4 11 11 (0) (7) (6) 27 10

Total Expenses 1,661 1,184 1,214 1,287 (74) (103) 373 8,308 8,148 7,857 7,759 98 389 549 17,235 17,504

May $ B / (W) YTD $ B / (W)

Key Terms: 2012A – 2012 Actuals 2013P – 2013 Plan 2013A – 2013 Actuals 3+9F - 3+9 Forecast $B/(W) - $Better/(Worse)

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Accounting Procedures

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Invoices – Coding (Sample Accounts)

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•Payroll Regular: 60101

•Agency Personnel: 60113

Payroll (601XX)

•External Course Fees: 60511

•Internal Training Program: 60515

•Membership Fees: 60514

HR / People Related Costs (605XX)

•Consulting Fees : 60705

•Public Relations Services: 60742

•Corporate Communications: 60743

•Sundry Gen & Admin Costs: 60799

General & Admin (607XX)

•General Office Supplies: 61302

•Courier Service: 61315

•Telephone: 61331

General Office (613XX)

•Entertainment-Event: 61919

•Venue Rental: 61930

•Sponsorship: 61963

•Gifts/Events: 61968

•Video Production: 61971

•Event Food & Beverage: 61987

•Translation: 61990

Events (619XX)

•Air Fare: 64101

•Meals: 64110

•Accommodation: 64120

•Car Rental: 64130

•Sundry Travel: 64199

Travel (641XX)

•Flowers & Gifts: 64491

•Social Marketing Programs: 64497

•Sundry: 64499

Sundry (644XX)

All invoices must include:

• Cost center – AAXX

• Account number – see sample above

• Project code – if applicable

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Process of sending invoices

• Review invoice amount to check for accuracy.

• Denote cost centre number on the invoice.

• Based on type of expense, denote account number on the invoice.

• Specify the project code where applicable.

• Cost centre manager should sign and approve the invoice. • Note – if the signing authority required on the invoice is beyond that of the cost centre manager, then please pass

on the invoice to the appropriate management level as per the Chart of Authority

• Any questions regarding the Chart of Authority can be directed to Francis Mendoza

• Send invoice through internal mail to Francis Mendoza at 2190/5th Floor

• Francis will review coding on the invoice, ensure that it has been signed appropriately, and then forward the invoice to Accounts Payable to key into the system

• Approved employee expense forms can be sent directly to Employee Expenses at Oakville 2

• Year 2014 Timelines – All invoices must be submitted to Accounting by the month-end cut-off dates highlighted in Appendix I.

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Accrual

When is it needed?

• The invoice is sent to Accounting after the cut off date.

• The invoice has not yet been received, but services or goods have been received and the payment has been forecasted in that specific month (this rule applies to amounts greater than $10,000).

Impact of NOT accruing

• If an invoice is not accrued, then the actuals will be understated in the current month and overstated in the month in which the invoice is actually paid out. This has the following impacts:

• Inaccurate reporting (actuals versus plan/forecast), especially significant during quarters

• Understatement of current actuals may result in loss of funding, as the following quarters would

not have sufficient money to cover the payment that was not accrued.

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Accrual

How to book an accrual?

• E-mail the Excel accrual template to Francis Mendoza by Thursday before month-end

(see calendar in Appendix I) along with the following documentation:

• Original invoice that has been coded, reviewed & signed; or

• Copy of invoice that has been coded but has not been signed off; or

• If the invoice has not been received but services or goods have been received, payment has been

forecasted in that specific month AND the amount is greater than $10K. Please include cost center,

account number, estimated amount.

Sample Excel Accrual Template

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Account Dept ID Project Code

C$ Amount

Net of HST Reference Description Inv Nr. & Comment

60599 AC19 6,780.00 ACCR Jun12 CBI WORKPLACE SOLUTIONS

Invoice dd Jun 20 2012

received after AP cut-off

deadline

60705 AC19 5,650.00 ACCR Jun12 PROACTIVE HEALTH & SAFETY

Invoice dd Jun 24 2012

received after AP cut-off

deadline

22103 A000 (12,430.00) ACCR Jun12 AC19 ACCRUALS YTD Jun12

Authorized Signature

Submission Date :

(Cost Centre Manager Name in Print )

Liza Provenzano (per Mavis Gois)

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Prepaid

When is it needed? • A prepaid is needed when there is a time lag between payment of the invoice and occurrence of the

event that it is related to. The general rule is to book a prepaid when the amount is greater than $10,000 and relates to services to be received in a subsequent period.

Impact of NOT booking a prepaid • If an invoice is not flagged as a prepaid, then the actuals will be overstated in the current month and

understated in the month in which the event was to occur. This results in a mismatching of forecast to actuals which is especially significant during quarter and year ends.

How to book a prepaid? • To book a prepaid, attach a note on the invoice to specify that the amount is a prepaid.

• Attach the following details on the invoice:

• Accounting will keep track of the prepaid based on the note from the cost centre manager, and will convert the prepaid to an actual once the date has passed.

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Prepaid balance sheet account #: 13001

Date to Actualize (date of event): MM/YY

Cost centre: AAXX

Account #: 6XXXX

Signature:

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Capital

What is it?

• A physical asset used to supply goods or services or used for administrative purposes;

• Expected to be used for more than 1 year; and

• Expected to help CTC generate future economic benefits (eg. Sales)

Impact of NOT booking capital

• Expenses will be overstated in the current month and understated in future months when the asset should be depreciated over its useful life

How to book capital?

• Accounting should be consulted in determining whether amounts are capitalizable or not.

• Accounting will keep track of the capital and depreciate it over its expected useful live.

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Forecasting Process

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Purpose of forecasting

Financial Outlook and Annual Plan presented to the

Board

Quarterly forecasting in

Hyperion

Functional quarterly packages

prepared by FP&A Corporate Functions

CTC quarterly package for the

Executives prepared by FP&A

Corporate

• Forecasting process occurs every quarter (3+9F in April, 6+6F in July, 8+4F in September).

• The first iteration of next year’s Plan is completed during the 8+4F cycle and finalized at year-end.

• The purpose is to provide the Executives with information on how we are trending versus Plan and what the outlook is for balance of year.

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Annual Plan & Quarterly Forecast

Key Items to Review

• Payroll: Employee list and TBH; Timing of Leave of Absence, New Hires, Terminations; Agency Personnel

• Other Expenses: Review YTD spend – Are variances due to savings / overage or timing? Were accruals submitted? Timing for balance of year spend.

• Provide details: Explanations for large variances. Information on what’s included for consulting, Other G&A, Other HR costs, etc.

Roles & Responsibilities

• AVP of team submits all Forecast & Plan information into the system. FP&A key contact.

• Managers provide input to AVP regarding personnel and other expenses.

• Team ensures that all invoices are submitted on timely basis and/or accruals are made.

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Q1 - Corporate Affairs

Key Terms: 2012A – 2012 Actuals 2013P – 2013 Plan 2013A – 2013 Actuals 3+9F - 3+9 Forecast $B/(W) - $Better/(Worse)

(in Thousands)

2012A 2013P 2013A 13A vs. 13P % 13A vs. 12A % 2012A 2013P 3+9F 13F vs. 13P % 13F vs. 12A %

Wages and Salaries 1,585 1,576 1,436 141 9% 149 9% 6,288 6,444 6,160 284 4% 129 2%

Benefits 547 538 491 47 9% 56 10% 2,193 2,193 2,137 57 3% 56 3%

Personnel Expenses 2,132 2,114 1,927 188 9% 205 10% 8,481 8,637 8,296 341 4% 185 2%

Memberships 98 21 33 (11) -54% 65 67% 293 85 118 (33) -38% 175 60%

Training 8 9 4 5 55% 4 51% 39 36 47 (11) -29% (8) -20%

Other HR costs - - 0 (0) 0% (0) 0% 8 - (10) 10 0% 17 226%

Human Resource Costs 106 30 37 (6) -21% 69 65% 339 121 155 (34) -28% 184 54%

Consulting Fees 150 369 351 18 5% (201) -135% 1,221 1,399 1,499 (100) -7% (278) -23%

Other General & Admin 176 314 526 (212) -68% (350) -199% 1,083 1,156 1,215 (59) -5% (132) -12%

Donations 1,762 2,025 1,999 26 1% (237) -13% 2,258 2,420 2,419 1 0% (161) -7%

General & Admin 2,087 2,707 2,876 (169) -6% (789) -38% 4,562 4,975 5,133 (158) -3% (570) -13%

Dlr Comm Production 278 214 284 (70) -33% (5) -2% 778 854 924 (70) -8% (147) -19%

Dealer Recovery (242) - (182) 182 0% (60) 25% (1,171) - (182) 182 0% (989) 84%

Net Dealer Comm 36 214 102 112 52% (65) -180% (393) 854 742 112 13% (1,136) 289%

Events 57 289 (141) 429 149% 197 348% 2,219 885 691 194 22% 1,528 69%

Events Recovery (31) - - - 0% (31) 100% (978) - - - 0% (978) 100%

Net event costs 26 289 (141) 429 149% 166 647% 1,242 885 691 194 22% 551 44%

General Office 417 298 499 (200) -67% (82) -20% 2,080 1,193 1,420 (227) -19% 660 32%

IT Costs 25 37 2 35 95% 24 93% 114 149 114 35 24% 1 0%

Travel and Entertainment 159 158 121 37 23% 38 24% 902 662 664 (2) 0% 238 26%

Sundry Costs 11 4 4 0 7% 7 64% 216 17 16 1 6% 200 93%

Other - (Gain/Loss) - - - - 0% - 0% (5) - - - 0% (5) 100%

Non-Personnel (Other) Expenses 2,869 3,738 3,502 236 6% (634) -22% 9,071 8,857 8,937 (81) -1% 133 1%

Occupancy Costs 2 - - - 0% 2 100% 2 - - - 0% 2 100%

Depreciation 3 3 7 (4) -156% (3) -104% 31 10 27 (16) -157% 4 14%

Total Expenses 5,005 5,855 5,436 419 7% (430) -9% 17,586 17,504 17,260 244 1% 325 2%

YTD March Year Total

Total Year Variance

$ B / (W)$ B / (W)

YTD Variance