Strengthening Controls in 2013: The Order-to-Cash Cycle

Transcription

1 Strengthening Controls in 2013: The Order-to-Cash Cycle Peter Millar Director, Technology Application Chris Stewart-Smith Senior Technical Consultant

2 2 Why are we talking about O2C? Economy is turning and we re re-focusing our attention An organization can t save its way to growth or increased share valuation Technology can help improve operations and efficiency in this key business process

3 3 Key Challenges Transaction-intensive business environment Multiple business owners, participants, processes Source of key business risk Compliance issues

4 4 Wide range of business risks Inaccurate sales order processing High error rates in order fulfillment Rogue sales practices that may involve excessive discounts or unapproved credit extensions Poor internal controls open up risk of fraud Revenue leakage!

5 5 Sub-Processes Breakdown

6 6 Sub Processes and Activities CUSTOMERS ORDER ENTRY PRICING Create New Customer Enter Customer Data Enter Credit Limits Apply Contract Prices Create Sales Orders Enter Sales Prices Apply and Manage Credit Limits Approve Discounts Create Price List Add/Remove Items Apply Discounts Approvals SALES INVOICING RECEIPTS COLLECTIONS Ship Goods Billings Enter Receipts Create Debit Memos Apply Chargebacks, Adjustments, Reversals Apply Early Payment Discounts Negotiate Write-Offs Authorize Write-Offs

7 7 Manage Customers Issue Customer credit limits are at appropriate levels Risk Credit limit for a given customer is exceeded and results in credit risk Sample activity monitored Identify sales orders where the total sales order outstanding and total A/R balance is greater than the customer credit limit CUSTOMERS ORDER ENTRY PRICING SALES INVOICING RECEIPTS COLLECTIONS

8 8 Order Entry Issue Excessive discounts offered to customers Risk Revenue leakage: can you afford to leave money on the table? Sample activity monitored Identify cases where the order price does not match master file standard price within approved thresholds CUSTOMERS ORDER ENTRY PRICING SALES INVOICING RECEIPTS COLLECTIONS

9 9 Manage Pricing Issue Pricing errors or unauthorized price changes Risk Lost revenue, kickbacks Sample activity monitored Identify sales orders where individual who modified prices in the Price Master File is not authorized to do so CUSTOMERS ORDER ENTRY PRICING SALES INVOICING RECEIPTS COLLECTIONS

10 10 Sales Invoicing Issue Delays in shipments and invoicing Risks Decreased customer satisfaction Reduced cash flow Sample activity monitored List all billings where sale has been processed within given number of days from date of sales order entry CUSTOMERS ORDER ENTRY PRICING SALES INVOICING RECEIPTS COLLECTIONS

11 11 Receipts Issue Unreconciled receipt and invoice amounts Risks Lost revenue Increased cost of collections Sample activity monitored Identify invoices where single or even cumulative receipt amount does not match invoice total amount (two-way receipt match) CUSTOMERS ORDER ENTRY PRICING SALES INVOICING RECEIPTS COLLECTIONS

12 12 Collections Issue Disputed billings Risks Loss of revenue or delays in receiving payments Sample activity monitored Negotiating and authorizing write-offs CUSTOMERS ORDER ENTRY PRICING SALEIS INVOICING RECEIPTS COLLECTIONS

13 13 Understand Business Process first, then get to know the DATA The data captures what actually has taken place Common sources of O2C data: CRM System Customer Master Data Master Price Lists Sales Order Data Shipping System Accounts Receivable Collections

14 14 ACL Solutions Quickly identify and resolve key control exposures and risk areas that impact bottom-line performance Implement business process optimization in a timely manner before control problems escalate Leverage technology that focuses on loss prevention instead of recovery time and cost savings

15 15 Complete Solution Purpose-built, all-in-one cloud-based audit management designed for simple use, instantly increases productivity. ADD-ONS for ACL DESKTOP Visualize, widely share and act on information uncovered in analysis testing across the business Audit, Finance, Risk, Compliance & Line of Business Executives TRANSFORMING AUDIT & RISK Audit & Compliance Teams Enables secure, direct and seamless data selection and extraction capabilities for your SAP ERP Automatically distribute exceptions found during data analysis testing to multiple business stakeholders Audit, Finance, Risk & Compliance Teams Analytic Specialists Enhances ability to analyze data trapped in static reports, PDF files, XML files and other content-rich data sources An add-in for Microsoft Excel designed for working with data results produced by analytic systems Server-based technology that lays the foundation to implement automated analytics and data sharing, remediation, reporting and continuous transaction monitoring Access and analyze complete data populations with easy and 100% coverage for superior assurance