Chart of Accounts for Memorial Plan

The following is the proposed Chart of Accounts for the Proposed  Memorial Plan Company

1,  Balance Sheet

Assets:

Current Assets:

Cash and cash in bank

Receivables (PCF and other Advances)

Inventories

Non Current Assets:

Other receivables

Trust Fund

Furniture fixtures and equipment

Land and building

Liability

Current Liability

Accrued Liability

Non current liability:

Pre Need Reserve (from Actuarial Valuation

Insurance Premiums

Stockholders Equity

Retained Earnings

Revaluation of Trust Fund Account

B.  Profit and Loss Statement

Sales/Revenue

     Less Marketing expense

Net Sales

     Less Contribution to Trust Fund

=  Gross Profit

Less:   ORC for executives

            Seminars, conferences, brochures

Salaries and wages.

Rent 

Utilities

Other administrative expenses

Net income

Some significant accounting and finance policy

1.  Commission expense (marketing expense shall be as follows:

     1.  It shall be given on the first year of the plan where 50% of the amortization is paid and deducted upon remittance. for the account of the following:

         Sales executive   -      35%    (7% of gross)

         Sales manager     -      10%   (2% of gross)

         Sales director       -        5%   (1% of gross)

        Thus:  

         Cash

         Commission expense

                                   Sale (Installment)

       Set UP  ICR         (depending on annual, semi annual or quarterly or monthly

       ICR  (Plan in force)

                     TF contribution  (which could range from:

                        Year    1     5 % of the MA (1% of gross)

                        Year    2   40%                   (8% of gross)

                        Year    3    75%                  (15% of gross)

                        Year    4    80%                  (16% of gross)

                        Year    5    80%                  (16% of gross)

                                                                         56% of total

Thus in case of cash payment, 56% of amount received is AP to TF

The remainder which is 29% of total MA is the General Admin Cost and GP: 

 which are budgeted as:

                           3% ORC  (shall range from 0.05% to 1.5% and shall be paid only when 20% of MA have been paid)

                           3% insurance

                         10% salaries, wages and rent, utilities

                          13%   gp   (some of this may be spent for marketing)

Thus OR for the customer is in full, the remittance report shows the deduction (subject to audit) and supported by deposit slips.

    2. Beginning on the second installment until the end there shall be allowance that can be deducted upon remittance; the following allowances can be deducted by sales staff again from remittance.

     P40.00 for MA above P1,000;

     P25.00 for MA below P1,000

3. Accounting for receipt for payment:

            Cash                      xxx

                    

                    Commission expense or TA as the case maybe;     xxx

                   TF contribution      (5 to 80% as the case maybe)   xxx

                   Insurance Premium Payable  (15% of MA)

4.  Setting up of ICR  (Recap)

(Based on Plan that is signed and approved)

    ICR    (based on balance)

                                    TF payable
                                    Commission Payable
                                    Insurance Payable
                                    Orc payable

                                    Deferred Interest Income
                                   (3% for Semi annual)
                                    6% for quarterly
                                    15% for monthly)
                                    Admin Expense payable  (10% of total)
                                                                       

4.  Sources of revenue:

     1.  Investment income from Trust Fund - shall not be less than 5% per annum to be able to compound at 2x the original amount and meet at least the 100% fund accumulation

    2.  Profit from reimbursement of payment of plans served with its own chapels and other funeral services

        Thus:

        Low end plans and IS                 -   80% of the plan

       40t to 80T                                     -   70% of he plan

       80 to 100t                                     -   55% of the plan

      100 to 200                                     -   50% of the plan

      200t +                                            -45% of the plan

     This is a generous reimbursement;  other MP start at 50%

    3.  Investment in allied undertakings that support the business:

        Chapel cum crematorium, memorial services and  columbarium alone or in a complex.

3.  50% share of upgrading. (when the customer realize that he needs to upgrade) net of 10% commission given to agents or chapel manager.

                     

           

Jorge  S

The Holy Gardens Group - "THE MEMORIAL EXPERTS"

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