Tuesday, November 15, 2011

Accounting System Strategy-IT Technology Investment

In my experience, when you begin with the end in mind.  Design for Quality, I always assume the world with localized requirements.  

Feature Expectation
Using out of the box features in ERP for example, if your ERP solution leveraged the journal (chart of accounts) to derive the location, you have far less or fewer transactions to reconcile during the close.  
Access (User ID) system of record MUST be controlled   
Based on legal evidence of arrangement controlled to the general ledger-General ledger by country code.  
  1. The user ID location code MUST map to the ISO country code in ERP.  
  2. This is not dynamic, applies to any visibility in any application and must be sourced from a controlled table.  
Quality Management 
Any call to a warehouse or uncontrolled database, introduces a number of defect types.  
  1. Transportation
  2. Movement
  3. Over-Processing 
Risk Management
Updating any fact record derived from the transactions during the lifecycle of the transaction, breaks the zero data loss and ability to audit the record in its original form. 
  1. The rule must be, that a user may apply the new logic in a business view to a fact record.
  2. The original transaction must not be changed under any circumstances or threats of zero data loss, in the expense or revenue transaction capability fails. 
    1. This must be controlled regardless of the location and as a GAAP and ISO control to the corporate policy.
      1. The defects and ability to accurately apply the cost and performance against the internal and external stakeholders on-time and without additional cost type performance
    2. Payment of tax in the local region for duty fees 

  1. The process and people would be enabled with systematic controls by country;
    1. The process would derive or acquire the reference codes systematically by country
    2. The JIT parameters would allow the user to create the timeline based on deliver or ship by date.
      1. Assume in country supply with a date within a 2 week window of the expected start date.  
      2. Assume the customer has agreed to store equipment on-site for any installation to ensure resources have access to and customer has accountability to ensure receipt for any defect and transfer of FOB destination.
      3. Moving equipment has the highest probability of defects on high end types of products. 
      4. The process would extend this timeline when out of country supply chain rules have extended the rule.  
      5. Pre-test of equipment must be factored to prevent any lost resource time in the event of damages to equipment.  
        1. Every movement raises the probability of defects
          1. Another country having power and software encryption for another location has a lower probability of accurate delivery of the install country.  
          2. Options for an alternative model to manage in country Just in Time scenarios

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