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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