普华永道财务管理最佳实践之应收管理课件.ppt

Best Practice Financial Processes: Accounts Receivable,Best Practice Financial Proces,Account Receivable - Best Practice Objectives,Accounts Receivable Objectives,Organisation,People,Processes,Controls,Measures,Information Systems,To ensure customer payments are received efficiently and effectively for goods/services delivered, within the agreed terms and conditionsTo manage credit risk efficiently without creating unnecessary delays in the sales cycleTo maintain a complete and accurate statement of outstanding debtorsTo provide complete forecast information to assist the management of short-term cash requirements,Centralised processingEconomies of scaleCustomer focus,Establish credit levelsIssue sales orderIssue invoiceMonitor creditCollect cash,Procedures manualAuthorisationValidation/matchingCredit control,Cost per invoiceCredit notes percentageCost per payment receivedDays debt outstanding,Integrated with sales systemAutomatic matchingElectronic receipts,Customer relationsLegal framework awarenessCredit management,Account Receivable - Best Prac,Accounts Receivable - Best Practice Features,Process Features,Formal credit checks applied to all new customers within 24 hours using credit bureau Monitor credit status/terms on regular basis Customer account managers provided with up to date credit statusTreasury policy set on late and prompt paymentsAuthority levels clearly definedCredit policies defined and agreedTerms and conditions agreed with customers,Consolidated periodic invoicing for high frequency shipmentsBank remittance notices issued with sales invoices to facilitate reconciliationSelf billing invoices by high volume customersConsider outsourcing regular invoice/payment eg utilitiesRegular review of invoice queries and credit notesReconciliation of AR balances to GL control accounts on a regular basis,Credit insurance arrangements evaluated periodically Customer account managers responsible for sales and cash collectionConstant monitoring of debtor days, daily collection, ageing of debtCustomer contact records maintainedOutsource cash collection where appropriateDetermine and report on credit targetsMonitor overdue debts and take action within agreed policy,Establish credit levels,Issue sales order,Issue invoice,Monitor credit/ collect cash,Sales orders prepared using pricing database with pricing profiles for products and customers No order processed without valid customer PO referenceDelivery note acts as invoice for low-frequency shippings,Accounts Receivable - Best Pra,Accounts Receivable - Best Practice Features,Establish credit levels,Issue sales order,Issue invoice,Monitor credit/ collect cash,System Features,Consolidated credit position for group of customersSystem provides on-line customer payment history and termsUse of workflow software to monitor process and help resolve queriesStandard credit control reports,Common SOP and AR customer databaseInvoices automatically generated from SOP and shipment dataSelf billing invoices automatically matched to customer ordersMulti currency invoicesAutomatic commitment and accrualsAutomatic reconciliation facilities between integrated SOP AR and GL systems,SOP linked to debtors ledger to ensure customer credit limits not exceededSales documents sent via EDI for all major customersIntegrated order & billing systems available on line & hard copy,Payments received electronically where possibleAutomatic matching of payments to invoicesOn-line diary facility to monitor callsAutomatic flagging and reporting of high risk accountsAutomatic dunning letters issued within agreed trading termsIntegrated systems to facilitate customer query handlingForecast cash receipts available for treasury purposes,Accounts Receivable - Best Pra,Accounts Receivable - Trends,From,To,Separate AR modulePayment by chequeComplex/variable trading termsManual matchingPerformed by Finance department,Integrated systemsElectronic paymentCommon trading terms for all customersAutomatic matchingShared or outsourced services,Accounts Receivable - TrendsFr,Accounts Receivable - Measures/Cost Drivers,90 percentile,Median,10 percentile,Number of customer payment received per accounts receivable,FTE per annum,40,300,5,500,700 or less,Accounts receivable cost per sales invoice processed,10 percentile,Median,90 percentile,1,3,18,Median,1 day,90 percentile,4 days,10 percentile,1 day,Days to process invoice/credit note (ie, time between receipt of invoice/credit note and entry into the accounting system),Cost drivers,Number of AR receiptsLevel of multiple receiptsUse of direct debiting/standing ordersUse of electric funds transferLevel of credit risk associated with customer baseVariety in payment termsDegree of foreign currency receiptsLevel of credit notes,Accounts Receivable - Measures,Billing - Measures/Cost Drivers,90 percentile,Median,10 percentile,Number of sales invoices generated per billing FTE per annum,90,000,11,100,1,600,Billing cost per sales invoice and credit note processed,10 percentile,Median,90 percentile,1,2,22,Median,2 days,90 percentile,15 days,10 percentile,1 day,Days from despatch of goods to preparation of sales invoice,Cost drivers,Number of invoicesNumber of customersUse of EDIComplexity of service/goods suppliedVariety in terms and conditionsComplexity of discountsDegree of foreign currency invoicingNumber of complaintsAccuracy/level of credit notes,Billing - Measures/Cost Driver,Accounts Receivable - Level 0 Context Diagram,Accounts Receivable - Level 0,Accounts Receivable - Level 1 Overview,Accounts Receivable - Level 1,Accounts Receivable Notes Maintain customer data,Best Practice FeaturesSend bill to one address only. Where a customer is provided with goods or services at a number of locations, the consolidation in the billing process not only reduces the number of bills to be verified or created but also decreases the potential need to reconcile a number of receivables on individual accounts. Centralise the customer set-up process in order to ensure consistency.Internal control requirementsIn order to minimise the risk of duplication of the data and the unauthorised set-up of customers, the process should be centrally controlled and operated. Before any customer is deleted from the system, evidence should be produced that the customer has been inactive for the appropriate period of time and no outstanding balances are present. Approval for deletion is obtained by management authority signature.The changes to customers report is regularly checked and monitored.System notification of duplicate business and birth registration numbers.,Accounts Receivable Notes M,Accounts Receivable Notes Maintain customer data,Cost DriversNumber of customersNumber of new customersNumber of customer changesNumber of required customer standing data fields Possibility of sharing standing databaseOverlap between databasesSearch criteria and standardisation to avoid duplication/redundancyKey Performance IndicatorsNumber of changes and additions carried out in a year per FTENumber of customers in op. database without transactions for 1 yearPercentage of changes and additions of total customer base,Accounts Receivable Notes M,Accounts Receivable Notes Manage Receivables,Best Practice FeaturesAged debit balances should be reviewed by management on a regular basis and explanations sought as to why debts have failed to be recovered.Overdue debit balances occur as a result a number of factors of sub-optimal performances within the sales department or within the credit control process or AR - info not recorded from bank quickly enough and therefore not processed quickly enough or timing of invoice issue. The root causes need to be addressed and rectified by altering the creditability status of the customer.Automatic flagging and reporting of high risk accounts.Materiality and time limits.Internal control requirementsIt is essential that debit balances are reviewed regularly and matched with payments promptly in order to avoid the risk of fraud and minimise the chances of bad debt.Computer diary of actions taken. Stops placed on overdue customers.Aged debtor report sent to legal department and functional managers.,Accounts Receivable Notes M,Accounts Receivable Notes Manage receivables (Cont),Cost DriversNumber of overdue open items.Number of steps in the dunning procedure.Quality and timing of the matching process of receipts.Availability of dunning enforcement measures.Tolerance criteria.Payment terms and conditions policy.Key Performance indicatorsDays outstanding as a percentage of average payment term.Value of overdue invoices as a percentage of outstanding balances.Bad Debt Provision as a percentage of outstanding balances.Process cost/customer payment received.Number of dunning letters as % of total invoices.Write off value as % of (sundry) sales revenue.,Accounts Receivable Notes Mana,Accounts Receivable Notes Process receipts and direct debits,Best practice featuresUse of an electronic interface between bank, cashiers and AR treasuryAutomatic matching of receipts by value and invoice number Internal control requirementsInterface control total with bank and cashiers, dailyRegular supervisory review of open and unmatched itemsDocumentation of all overdue open items and unmatched receipts,Accounts Receivable Notes P,Accounts Receivable Notes Process receipts and direct debits,Cost DriversNo. of Receipts for more than one transactionPercentage of downpaymentsQuality of payment informationNumber of unmatched paymentsNumber of foreign currency receipts and exchange rate differencesTolerance payment differencesNumber of criteria for automatic matchingKey Performance IndicatorsMonthly and cumulative tolerance difference amountsPercentage of receipts cleared automatically in monthNumber of manually matched receipts per FTE Number of unmatched receipts older than 1 month,Accounts Receivable Notes P,Accounts Receivable Notes Process amendments,Best Practice FeaturesSingle contact point for all queries. Although the query processing can be distributed there are obvious inefficiencies in directing enquiries to a number of contact points.Have access to sufficient data to be able to handle the majority of queries on-line. In this context, the use of image processing allows invoices to be called up on screen quickly and, if necessary, automatically copied to the enquirer through the medium of autofax.Internal control requirementsIn order to operate an effective helpdesk, staff will require to have access to most parts of the accounts receivable system. This should be on a read only basis in order to minimise the potential for fraud taking place.Targets set for time to answer queries.,Accounts Receivable Notes P,Accounts Receivable Notes Process amendments,Cost DriversNumber and variety of queries received.Availability and flexibility of standard screens.Complexity of database for tailor-made queries.Response times of enquiry systems.User-friendliness of enquiry systems.Key Performance IndicatorsAverage time taken to process queries.Percentage of queries answered within targeted time.,Accounts Receivable Notes P,Accounts Receivable Notes Process period end,Best Practice FeaturesAutomatic process requiring minimum or no manual intervention. This is a standard feature of modern Accounts Receivable packages and the only possible problem area could be with the nature of the interface with the general ledger package.Internal control requirementsThe basic requirement is to ensure that the data transmitted to the general ledger is complete and on time.There is a requirement to ensure that the information recorded in the general ledger agrees with the output from accounts receivable.A reconciliation should be carried out between debtor balances on GL compared with AR. Check VAT exception report to pick up any late VAT postings.Cost DriversVolume of monthly period end reports.Quality of day to day controls.Key Performance IndicatorsPercentage of period end closures within target.Average number of days to produce monthly information.,Accounts Receivable Notes P,