Best Practices

Project Superp Apollo Tyres Limited 6/24/2012

Financial Accounting
Best business practices in SAP FI module may be discussed under the following broad heads

Financial Accounting in general

General Ledger accounting Accounts payable Accounts receivable Asset Accounting

6/24/2012

Financial Accounting
Financial Accounting in general
Maintaining common Chart of Accounts. Numeric Logic for Codification Minimum process Cycle Uniform Logic for codification of various elements within various modules Rationalization of Document Types Control on master records so that any creation change is made Centrally .

6/24/2012

Financial accounting
General ledger accounting
Common chart of accounts Minimal number of accounts to meet information needs Regulated control of new account creation Periodic check of inactive accounts Integrated systems eliminates duplication of maintenance Comprehensive security and access controls Efficient copy and editing facilities

6/24/2012

Financial accounting
General ledger accounting
Emphasize the first-time quality of journal entries by ensuring that all required data is available for an entry to be made correctly Perform hard copy review of manual journal entries after entry, but prior to month-end. Replace management/supervisor reviews with statistically backed audits and tolerance levels to detect irregularities. Rigorous period end and year end routines to ensure accuracy of data. Detailed procedures applied to reconciliation, accruals and prepayments. Cyclical reconciliation of balance sheet accounts
6/24/2012

Financial Accounting
General ledger accounting
Soft close for non quarter months Automatic period end reports produced On line reporting of information and drill down Focus on analysis vs. transaction processing Liaison teams linking business and accounting Regular monitoring of all clearing Accounts and ensuring Zero balance to the extent possible.

6/24/2012

Financial Accounting
General Ledger accounting
Period-end timetable communicated to all relevant staff. Regular liaison with auditors to minimise ad hoc audit trail and reporting requirements for statutory reports. Automatic balance carry forward Usage of Drill down facilities which provides full audit trail on financial data. Additional periods used solely for year end accounts. System is sole source of consolidated statutory reporting requirements. Eliminate/Minimize any manual adjustments. Adhere to well-defined close cycle time throughout the company.
6/24/2012

Financial Accounting
General ledger accounting
Automate inter-company reconciliation process as far as possible. Perform all GAAP adjustments and currency conversions at the field locations where the transactions originate. After every closing, conduct a postmortem whereby the explanation of lateness or errors are identified in order to track down and correct problems. Eliminate inspection points in the close process.

6/24/2012

Financial Accounting
General ledger accounting
Set aggressive materiality limits for inter-company transactions in order to speed the closing process. Reduce the number of adjusting entries made after the initial trial balance. Distribute reports electronically; allowing on-line query.

6/24/2012

Financial Accounting
Accounts payable
Single Supplier Database Default, payment terms held on supplier file with manual override at P.O. and invoice entry. Integrated purchasing and AP system with a common database Payment terms defined and agreed with supplier. Process in place for monitoring the status of invoices and payment schedules. Shift from transaction review and processing toward value-added analysis and decision support activities. Authority levels clearly defined for authorizing invoices/credit notes and payments.

6/24/2012

Financial Accounting
Accounts payable
GR Based invoice verification. No on Account Payment or receipts. Accounts Payable procedures and guidelines documented.

6/24/2012

Financial accounting
Accounts receivable.
Single customer database. Standing data set up on the system reflecting authorization, credit terms etc Customer account managers responsible for sales and cash collection Determine and report on credit targets Authority levels clearly defined for credit decisions Constant monitoring of debtor days, daily collection, aging of debt. Automatic matching of payments to invoices. No on Account receipts. Procedures in place for reviewing debtors and following up on outstanding payments.
6/24/2012

Financial accounting
Accounts receivable.
Monitor overdue debts and take action within agreed policy Forecast cash receipts available for treasury purposes. Staff trained in AR process and have clear roles and responsibilities.

6/24/2012

Financial accounting
Asset accounting
Link asset additions to original asset. Unique asset number across company. Develop an on-line fixed asset sub ledger. One day elapse time to close capital project and create a fixed asset. One to one mapping bettwen asset class and general Ledger Accounts

6/24/2012