Finance Playbook

The PAE Finance Playbook is a comprehensive document that consolidates the policies, procedures, guidelines, and best practices that guide PAE’s financial management. Its purpose is to standardize accounting and financial operations , guarantee the transparency of resource administration, promote regulatory compliance , and facilitate strategic decision-making with timely and reliable information.

It outlines five core areas:

1. Purpose and Mission

The playbook defines the mission of the area: To efficiently manage PAE’s economic resources, guaranteeing the integrity and reliability of financial information, the fulfillment of fiscal and regulatory obligations, and strategic support to senior management through timely analysis and resource optimization, contributing to sustainable growth and the generation of value for all stakeholders.

The key objectives are to:

• Standardize processes.
• Promote regulatory compliance.
• Strengthen internal control.
• Optimize operational efficiency.
• Assure reliable financial information.
• Foster strategic alignment.

2. Policies

Core policies guide financial operations, compliance, and resource management:

• Client Refund Policy: Establishes diagnosis, prioritization of credit and rescue, and details refund periods based on product type (e.g., Short Online Courses, High-Value Programs, Events).
• Customer Experience Commission Policy: Details the commission structure for the Customer Experience team based on sales, performance levels, debt recovery, and sales volume thresholds.
• White Label Partner Payment Policy: Defines payment schedules (sales before the 13th paid on the 20th; sales after the 13th paid on the 5th of the following month).
• Equipment Purchase Policy for New Collaborators: Requires advance notification from HR, financial approval, CEO authorization for amounts over $500.00, and adherence to equipment standards.
• Vendor Payment Policy: Governs payment to all vendors; mandates using the Slack – Payment Tracker and requires payments to be executed by the CEO and validated by the CFO.
• Purchasing and Expense Policy: Establishes authorization limits: CFO up to $500.00 per transaction; CEO required for amounts above $500.00.
• Treasury Management Policy: Governs cash flow administration, bank accounts, and payment scheduling (payments scheduled twice a week: Tuesday and Friday mornings).
• Accounting and Monthly Closing Policy: Defines the closing frequency (within the first 5 business days of the next month), responsibilities, and the mandatory reconciliation between QuickBooks and sales data from Zoho CRM.

3. Processes

Clear procedures standardize key financial and compliance workflows:

• Refund Procedure: A four-step process: 1) Identify client history. 2) Understand the reason for the refund. 3) Typify in CRM. 4) Seek a win-win solution (e.g., credit or partial refund).
• Checklist de Conciliación QuickBooks – Zoho CRM: A checklist used by the General Accountant to ensure sales data consistency between the two systems during the monthly close.
• Procedimiento de Reportes Financieros y KPIs: A procedure for preparing, analyzing, and delivering financial reports, ensuring accurate and timely calculation of KPIs.

4. KPIs and Performance Tracking

The playbook defines the comprehensive set of KPIs used to measure the financial health of the company:

• Profitability Ratios: Gross/Net Profit Margin, Expenses vs. Revenue Margin, EBITDA, ROIC, EBIT/Revenue, Effective Tax Rate.
• Trends: Revenue Growth, EBITDA Growth, Net Income Growth.
• Debt Ratios: Total Liability vs. Capital, Liability vs. EBITDA.
• Asset Utilization Ratios: Cash Turnover, Accounts Receivable Turnover.
• Liquidity Ratios: Interest Coverage.
• Other: Operating Cash Flow, Bad Debt.

5. Roles and Responsibilities

The Finance area structure includes two primary positions:

• Gerente Financiero (CFO – L4):
  • Leads financial strategies, growth, sustainability, and profitability.
  • Oversees financial operations and prepares annual/quarterly financial reports.
  • Leader: Margarita Pasos.
• Director de Contabilidad y Asistente de Recursos Humanos (DC & ARH – L3):
  • Leads and supervises all accounting activities, ensuring accuracy and regulatory compliance.
  • Responsible for financial statements, tax planning, and internal auditing.
  • Leader: VP-CRO & COO