Page 265 - Aida Hovsepian Onboarding

Finance & Accounting

Patronage
Pricing negotiated by CSCS for goods and equipment is available to all operators who purchase
them, but only operators who are Members are eligible to receive patronage dividends based
on the purchases. Patronage dividends are paid in two installments the next year – in March
and in August. Product rebates, freight rebates and sourcing fees less operating expenses equal
the amount of dividends due.

Sourcing Fees
CSCS’s operations are funded by a separate sourcing fee, paid by all IHOP operators.
Beginning in 2019, the Board has approved replacing product-specific fees with a smaller
per case fee on all products. As a result, oeprators will see a substantial decrease in cost
for a subset of items, and a slight increase in all other cases. The total annual amount
generated from these sourcing fees will not change.

Financial Statements
Financial statements are prepared each month and submitted to each Concept Co-op Board for
review.

Annual Audit
In January each year, Crowe Horwath, a public accounting firm, conducts a financial audit. At
completion, a Crowe Horwath representative discusses the audit results in a conference call
with the CSCS Joint Board.

Line of Credit
A Collateral Line of Credit was established at the request of the Boards to ensure availability of
funds in case of an emergency. CSCS can borrow up to 80% of the Accounts Receivable
balance.

Budget
Each year in October a budget for the next year is prepared and submitted to each Concept Co-
op Board for review at the November meetings. The final budget is approved at the December
CSCS Joint Board meeting.