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Best Practices

Project Superp

Apollo Tyres Limited

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Financial Accounting

Best business practices in SAP FI module may bediscussed under the following broad heads

Financial Accounting in general

General Ledger accounting

Accounts payable

Accounts receivable

Asset Accounting

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Financial AccountingFinancial 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 ismade Centrally .

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Financial accounting

General ledger accounting Emphasize the first-time quality of journal entries byensuring that all required data is available for an entryto 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 detectirregularities.

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

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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 andensuring Zero balance to the extent possible.

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Financial Accounting

General Ledger accounting

Period-end timetable communicated to all relevantstaff.

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 audittrail on financial data.

Additional periods used solely for year end accounts.

System is sole source of consolidated statutoryreporting requirements.

Eliminate/Minimize any manual adjustments.

Adhere to well-defined close cycle time throughout thecompany.

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Financial Accounting

General ledger accounting

Automate inter-company reconciliation process as faras possible.

Perform all GAAP adjustments and currency

conversions at the field locations where thetransactions originate.

After every closing, conduct a postmortem whereby

the explanation of lateness or errors are identified inorder to track down and correct problems.

Eliminate inspection points in the close process.

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Financial Accounting

General ledger accounting

Set aggressive materiality limits for inter-companytransactions 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.

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Financial Accounting Accounts payable

Single Supplier Database

Default, payment terms held on supplier file withmanual 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 authorizinginvoices/credit notes and payments.

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Financial Accounting

Accounts payable

GR Based invoice verification.

No on Account Payment or receipts.

Accounts Payable procedures and guidelines

documented.

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Financial accounting

Accounts receivable.

Single customer database.

Standing data set up on the system reflectingauthorization, credit terms etc

Customer account managers responsible for sales andcash 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 onAccount receipts.

Procedures in place for reviewing debtors and followingup on outstanding payments.

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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 andresponsibilities.

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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 createa fixed asset.

One to one mapping bettwen asset class and generalLedger Accounts