Communications Center for Holy Gardens: Fwd: Recognition of Income and Expenses for Sales Of Holy Gardens Plots

June 28, 2017

Fwd: Recognition of Income and Expenses for Sales Of Holy Gardens Plots

Computing for our current CGS:

Our current CGS for Holy Gardens Group is P3,500 per sm

Thus for Lawn x 3.5 = 8,750

SSN x 10 sm = 35,000

GE x 30 sm = 105,000

Thus for 36,000 installment x 50%

Amount subject for JV sharing = 18,000

x say 50% 9,000

less CGS 8,750

RGP 250

% of RGP for every MA (P600) 250/36,000 = 0.0694%

= 250/60 = P4.16 per MA

Unbelievable

What are the opportunities?

1. The collection fee of 5% if we have rewards system and points of 1% = 5% - 1.5% = 3.5%

2. Insurance. If we spend 2.3% of 4.00 then we make a margin of 1.7%

3. Marketing - if we spend 17% on marketing, then we can make a margin of 3% (however this is not happening because of the prizes we are making.

Comparative analysis:

Say 4,000 plots sold x 36,000 = 144,000,000

Margin on plots 4,000 x 250 = 1,000,000

Margin in insurance 144 m x 1.7% = 2,448,000

Margin on CF 144 m x 3.5% = 5,040,000

What to do next?

Reality:

1. We cant process our documents efficiently (use the portal, hire a better staff, train well,)

2. Di masimulan ang insurance (hire an insurance assistant, rewards assistant na train well)

Do it now. Be responsible People. 3ffb

However, we are not paying much attention to this. Especially to the insurance. Nothing is moving

WE NEEDED TO SELL THE SPECIAL THE PLOTS AT LOSS OR BREAK EVEN TO:

1. Generate more jobs and employment for sellers

2. To make the customers happy and to get their foot in; when their feet are in, we can offer products/services where we can make higher gp.

cms - chapel memorial service - as much as 30%

is - interment service 20 to 30%

regular plots - as much as 40%

We cant sell the special plots again, because we are losing money on them

We are running out of inventories

---------- Forwarded message ----------
From: Jorge Saguinsin <jorge.saguinsin@gmail.com>
Date: Tue, Jun 27, 2017 at 12:30 PM
Subject: Recognition of Income and Expenses for Sales Of Holy Gardens Plots
To: Bpi Records <bpi.records3ffb@gmail.com>, holygardens.group.memorial@blogger.com, Mad Elie <madz2424@gmail.com>, "Bereavement PROVIDERS INC." <bpi.apacctng@gmail.com>

This office discussed with the Accounting Staff (AP, AR, Treasury and Majorem Acctg.Loans the Chart of Accounts and Significant accounting policies and Chart of Accounts. They are not aware of this

They are walking in the dark.They need light

Objectives:

1. To determine the eligibility of SBU to be granted additional benefits like the health card.;they must be profitable for the last 6 months to qualify;

2. To make the accounting staff be expert on the system and structure of accounting at Holy Gardens before attempting changes.;

3. To move the accounting staff to be more efficient: stricter on the expenses, and stingy on the discount, ME, and collection fee

4. To be aware of other opportunities for earning like service

Reality:

1. We do not know the latest financial statements from the chief accountant

2. We received the Jan Feb P N L which showed the SBUs making large sums of money and thus must be verified

Explanations

Some important concepts to be understood

1. Sale -

Cost

Businesses must increase sales always: Sales can be increased by:

1. Increasing the channels

2. Price increase

3. Increase awareness

4. Increase the number of uses (or frequency, as with Starbucks, to

increase number of occasions to drink coffee)

5. Increase the value of the product

Decrease the cost:

1. Improve quality

2. Remove waste (MUDA)

3. Reduce labor cost

4. Reduce COGS

5. Outsource

Increasing the GP is incresing value added, increases value creation

2. Setting up a real estate company:

1 Cash/Cash in bank xxxx

Stockholders equity xxxx

2. Purchase of land xxxx

Cash/Loans xxxx

3. Set up inventory

Development cost xxx

Unexpended development cost xxxxx

Thus let us say we buy land at P350.00/ sm x 50,000 =

P16,500,000

Computing for development cost let us say P1,000/sm = P50,000,000

Total inventory / salable area = CGS

Saleable area = 50,000 x 65% = 32,500

Total inventory = P50,000,000 + 16,500,000 = 66,500,000/32,500

CGS = P2,078/sm

Lawn x 2.5 = P5,195

SSN x 10.00 sm = 20,078

GE x 30 = 62,340

4. Determine the GP rate vs SP

Thus:

TLP 100%

Less PC 17%

Insurance 4%

Collection fee 5%

Total 26%

Net sales 74%

Less VAT 12% - 8.88%

ME 20% 14.8

Total 23.68

Amount subject for JV 50.32

Say TLP = 36,000 x 50.32%

P18,000

Say 50% - 50% sharing 9,000

Less CGS 5,195

RGP/DGP 3,805

Thus our RGP per installment rate = 3,805/36,000 = 10.56%

5. Computing for RGP for installment sales

MA of P600.00 x 10.56 = P63.36

However, actually, our CGS is P3,500 /sm or P8,350

or DGP of only P9,000 - 8,350 = P650 only !!!

GP rate = 650,00 /36,000 = 1.8% only

RGP for installment sales (60 months to pay

P600 x 1.8% = ONLY P10.80!!!!

Thus: (CONCLUSION)

1. The PNL so submitted could be over stated

2. We have to be more efficient

3. The special plots sale is not sustainable, and does not make money

4. We make money on:

1. Regular plots

2. 20% dp, only 3 years to pay with interest

3. Services like PIS and PMS where there is no huge CGS

Please print and discuss with the Chief Accountant

What is your take on this?

Jorge U. Saguinsin
To "be the best, do your best, expect the best" always

N.B. The information contained herein are private and confidential in nature. The sender does not assume any damage that may arise from improper use of the email contained. ; especially if the information in this communication falls into the wrong hands causing damage and loss. to the company or any other parties.