7–33 Review the credit levels of all customers who stop taking cash discounts7–34 Call new customers and explain credit terms7–35 Verify customer locations from reverse phone records and
Trang 1Chapter 7: Credit and Collections Best Practices
Collection Management
7–1 Clearly define account ownership
7–2 Educate the sales staff about revenue recognition
7–3 Utilize collection call stratification
7–4 Base deduction management on transaction volume
7–5 Conduct consumer confidence calls with sales staff
7–6 Grant percentage discounts for early payment
7–7 Conduct immediate review of unapplied cash
7–8 Outsource collections
7–9 Sell your bankruptcy creditor claim
7–10 Simplify pricing structure
7–11 Write off small balances with no approval
7–12 Create an accurate bad debt forecast
Collection Systems
7–13 Compile access to customer assets database
7–14 Maintain access to customer orders database
7–15 Arrange for automatic bankruptcy notification
7–16 Set up automatic fax of overdue invoices
7–17 Issue dunning letters automatically
7–18 Use a collection call database
7–19 Access up-to-date collection agency information
7–20 Implement customer order exception tracking
7–21 Install payment deduction investigation system
7–22 Report on ongoing customer complaints
7–23 Link to comprehensive collections software package
7–24 Institute lockbox collections
7–25 Use real-time cash application techniques
Credit Issues
7–26 Create a credit policy
7–27 Modify the credit policy based on product margins
7–28 Modify the credit policy based on changing economic conditions
7–29 Modify the credit policy based on potential product obsolescence
7–30 Preapprove customer credit
7–31 Create standardized credit level determination system
7–32 Require a new credit application if customers have not ordered in some time
Trang 27–33 Review the credit levels of all customers who stop taking cash discounts7–34 Call new customers and explain credit terms
7–35 Verify customer locations from reverse phone records and satellite photos7–36 Issue a payment procedure to customers
7–37 Join an industry credit group7–38 Refer a potential customer to a distributor7–39 Require intercorporate guarantees7–40 Obtain credit insurance
7–41 Shorten the terms of sale
Commission Payments
8–6 Include commission payments in payroll payments8–7 Lengthen the interval between commission payments8–8 Only pay commissions from cash received
8–9 Periodically audit commissions paid
Commission Systems
8–10 Install incentive compensation management software8–11 Post commission payments on the company intranet8–12 Show potential commissions on cash register
Chapter 9: Costing Best Practices
9–1 Audit bills of material9–2 Audit labor routings9–3 Eliminate high-leverage overhead allocation bases9–4 Assign overhead personnel to specific sub-plants
Trang 39–5 Use perfect standards for material variance reporting
9–6 Eliminate labor variance reporting
9–7 Follow a schedule of inventory obsolescence reviews
9–8 Eliminate the tracking of work-in-process inventory
9–9 Implement activity-based costing
9–10 Implement throughput accounting
9–11 Implement target costing
9–12 Track excess capacity
9–13 Limit access to unit of measure changes
9–14 Report on landed cost instead of supplier price
9–15 Review cost trends
9–16 Review material scrap levels
9–17 Revise traditional cost accounting reports
Chapter 10: Filing Best Practices
Mailroom Improvements
10–1 Open envelopes with a belt sander
10–2 Improve the mailroom interface
Computer-Related Filing Issues
10–3 Add digital signatures to electronic documents
10–4 Archive canceled checks on CD-ROM
10–5 Archive computer files
10–6 Implement document imaging
10–7 Eliminate stored paper documents if already in computer
10–8 Extend time period before computer records are purged
10–9 Extend use of existing computer database
10–10 Improve computer system reliability
10–11 Track documents with RFID
Other Filing Issues
10–12 Adopt a document-destruction policy
10–13 Eliminate attaching back-up materials to checks for signing
10–14 Eliminate reports
10–15 Move records off-site
10–16 Reduce number of form copies to file
Trang 4Chapter 11: Finance Best Practices
Financing and Investment Activities
11–1 Strategize cost of capital reductions11–2 Obtain financing through Internet lender sites11–3 Issue direct access notes
11–4 Purchase debt directly from the government11–5 Take a business unit public
Investor Relations
11–6 Eliminate small investors11–7 Open conference calls to the public11–8 Issue investor relations podcasts11–9 Outsource the company stock purchase plan11–10 Sell shares in an Internet-based auction
11–11 Use Web broadcasting for public reporting
Option Management
11–12 Automate option tracking
11–13 Use Internet-based options pricing services
Pension Management
11–14 Automate 401(k) plan enrollment
11–15 Grant employees immediate 401(k) eligibility
Risk Management
11–16 Consolidate insurance policies
11–17 Obtain key man life insurance for the CFO
11–18 Obtain advance rating assessments
11–19 Rent a captive insurance company
11–20 Use Internet-based risk measurement services
11–21 Issue catastrophe bonds
Treasury Management
11–22 Centralize foreign exchange management
11–23 Settle foreign exchange transactions with the continuous link settlement system11–24 Use natural hedging for transaction risks
11–25 Install a treasury workstation
11–26 Optimize the organization of treasury operations
11–27 Process foreign exchange transactions over the Internet
Trang 5Chapter 12: Financial Statements Best Practices
Financial Reports
12–1 Move operating data to other reports
12–2 Post financial statements in an Excel PivotTable on the Internet
12–3 Restrict the level of reporting
12–4 Write financial statement footnotes in advance
12–5 Create a disclosure committee
Work Automation
12–6 Automate recurring journal entries
12–7 Automate the cutoff
Work Elimination
12–8 Avoid the bank reconciliation
12–9 Defer routine work
12–10 Eliminate multiple approvals
12–11 Eliminate small accruals
12–12 Reduce investigation levels
Work Management
12–13 Assign closing responsibilities
12–14 Compress billing activities
12–15 Conduct transaction training
12–16 Continually review wait times
12–17 Convert serial activities to parallel ones
12–18 Create a closing schedule
12–19 Document the process
12–20 Restrict the use of journal entries
12–21 Train the staff in closing procedures
12–22 Use cycle counting to avoid month-end counts
12–23 Use internal audits to locate transaction problems in advance
12–24 Use standard journal entry forms
Work Timing
12–25 Complete allocation bases in advance
12–26 Conduct daily review of the financial statements
Trang 6Chapter 13: General Best Practices
Management
13–1 Consolidate all accounting functions13–2 Continually review key process cycles13–3 Create a policies and procedures manual13–4 Eliminate all transaction backlogs13–5 Implement process-centering13–6 Issue activity calendars to all accounting positions13–7 Post the policies and procedures manual on the company intranet site13–8 Sell the shared services center
13–9 Switch to an application service provider
Reporting
13–10 Switch to on-line reporting
13–11 Track function measurements
13–12 Use Balanced Scorecard reporting
Systems
13–13 Create a contract terms database
13–14 Install a knowledge management system
13–15 Scan fingerprints at user workstations
Taxation
13–16 Create an on-line tax policy listing
13–17 Designate a tax liaison for each government jurisdiction
13–18 Assign tax staff to business units
13–19 Outsource tax form preparation
13–20 Pay federal taxes on-line
13–21 Pay taxes with a credit card
13–22 Reduce tax penalties with Internet-based penalty modeling
13–23 Subscribe to an on-line tax information service
13–24 Move intellectual property to an offshore holding company
Training
13–25 Create accounting training teams
13–26 Create an ongoing training program for all accounting personnel
13–27 Create computer-based training movies
13–28 Implement cross-training for mission-critical activities
Trang 7Chapter 14: General Ledger Best Practices
Chart of Accounts
14–1 Eliminate small-balance accounts
14–2 Modify account code structure for storage of ABC information
14–3 Reduce the chart of accounts
14–4 Use identical chart of accounts for subsidiaries
Data Warehousing
14–5 Use data warehouse for report distribution
14–6 Use forms/rates data warehouse for automated tax filings
14–7 Use the general ledger as a data warehouse
General
14–8 Restrict use of journal entries
14–9 Avoid general ledger posting bottlenecks
14–10 Have subsidiaries update their own data in the central general ledger
14–11 Prescreen construction-in-progess entries
System Additions
14–12 Construct automated interfaces to software that summarizes into the
general ledger14–13 Create general ledger drill-down capability
14–14 Overlay the general ledger with a consolidation and reporting package
14–15 Use automated error-checking
Chapter 15: Internal Auditing Best Practices
Assisting Business Units
15–1 Annually update an internal control assessment of each business unit
15–2 Issue self-audit guides to business units
15–3 Recommend business process improvements to business units
15–4 Track audit results through business unit surveys
15–5 Train business unit staff on control issues
15–6 Train new business unit managers on control issues
Internal Audit Management
15–7 Avoid overauditing of internal audits
15–8 Complete all internal audit work papers in the field
15–9 Create a control standards manual
Trang 815–10 Create an on-line internal audit library
15–11 Create and disseminate information from a best practices database
15–12 Outsource the internal audit function
15–13 Schedule some internal audits on a just-in-time basis
15–14 Schedule internal audits based on risk
15–15 Use workflow software for internal audits
Internal Audit Staffing
15–16 Fill internal audit positions from operations on a rotating basis
15–17 Add specialists to audit teams
15–18 Assign an auditor to be a relationship manager with each business unit
15–19 Assign internal auditors to system development teams
15–20 Create an auditor skills matrix
15–21 Use Excel for continuous auditing
Chapter 16: Inventory Best Practices
Bill of Material Accuracy
16–1 Audit bills of material16–2 Conduct a configuration audit16–3 Modify the bills of material based on actual scrap levels16–4 Review inventory returned to the warehouse
16–5 Modify the bills of material for temporary substitutions16–6 Use bills of material to find inventory made obsolete by product withdrawals
16–11 Use standard containers to move, store, and count inventory
16–12 Use different storage systems based on cubic transactional volume
16–13 Optimize inventory storage through periodic location changes
16–14 Eliminate the warehouse
Inventory Accuracy
16–15 Audit all inventory transactions
16–16 Compare recorded inventory activity to on-hand inventories
16–17 Eliminate the physical count process
16–18 Cycle count based on usage frequency
Trang 916–19 Lock down the warehouse area
16–20 Move inventory to floor stock
16–21 Segregate customer-owned inventory
16–22 Streamline the physical count process
16–23 Track inventory accuracy
16–24 Train the warehouse and accounting staffs in inventory procedures
16–25 Verify that all receipts are entered in the computer at once
Inventory Transactions
16–26 Record inventory transactions with bar codes
16–27 Record inventory transactions with radio frequency communications
16–28 Track inventory with radio frequency identification
16–29 Eliminate all paper from inventory transactions
16–30 Eliminate all transaction backlogs
16–31 Immediately review all negative inventory balances
Inventory Reduction
16–32 Reduce the number of products
16–33 Reduce the number of product options
16–34 Obtain direct links into customer inventory planning systems
16–35 Adopt just-in-time purchasing
16–36 Shift raw materials ownership to suppliers
16–37 Drop ship inventory
16–38 Reduce safety stocks by accelerating the flow of internal information
16–39 Reduce safety stock by shrinking supplier lead times
16–40 Use variable safety stocks for fluctuating demand
16–41 Cross-dock inventory
16–42 Use overnight delivery from a single location for selected items
16–43 Focus inventory reduction efforts on high-usage items
16–44 Eliminate redundant part numbers
16–45 Standardize parts
16–46 Identify inactive inventory in the product master file
Chapter 17: Payroll Best Practices
Employee Deductions
17–1 Disallow prepayments
17–2 Create employee self-service for payroll changes
17–3 Minimize payroll deductions
Trang 1017–4 Prohibit deductions for employee purchases
Employee Forms
17–5 Post forms on an intranet site
Employee Time Tracking
17–6 Avoid job costing through the payroll system17–7 Switch to salaried positions
17–8 Use computerized time clocks17–9 Use biometric time clocks17–10 Track time with mobile phones
17–11 Use honor system to track vacation and sick time
Payments to Employees
17–12 Issue electronic W-2 forms to employees
17–13 Outsource W-2 form creation and delivery
17–14 Post payroll remittances on company intranet
17–15 Only allow on-line payroll remittance viewing if employees use direct deposit17–16 Transfer payroll to debit cards
17–17 Use direct deposit
Payroll Management
17–18 Automate vacation accruals
17–19 Consolidate payroll systems
17–20 Eliminate personal leave days
17–21 Link payroll changes to employee events
17–22 Install manager self-service
17–23 Link the 401(k) plan to the payroll system
17–24 Link the payroll and human resources databases
17–25 Minimize payroll cycles
17–26 Outsource employment verifications
17–27 Outsource the payroll function
17–28 Use Web-based payroll outsourcing
17–29 Publish answers to frequently asked questions on an intranet site
Chapter 18: Policies in Support of Best Practices
18–1 Accounts Payable Policies for Best Practices (Chapter 3)
• Procurement cards shall be the preferred payment tool for purchases
under $ _.
Trang 11• Purchase orders must be used to authorize all purchases exceeding $ _
• Supplier invoices received by electronic transmission shall be paid _ days earlier than standard terms Alternatively, Supplier invoices received by electronic
transmission shall receive top processing priority.
• All supplier invoices shall be recorded in the accounts payable system within _ days of receipt
• All travel advances and manual check requests require prior approval by a
-level manager
• There shall be one designated supplier for each stock keeping unit (SKU), with
a second supplier allowed only for designated critical materials
18–2 Billing Policies for Best Practices (Chapter 4)
• All customer invoices must be issued no later than _ days subsequent to product shipment or service completion
18–3 Cash Management Policies for Best Practices (Chapter 6)
• _% of all invested funds shall be capable of liquidation within _ days of notification All investments falling below the [investment grade] or requiring more than _ days to liquidate must be approved in advance by the [officer position] The following specific investment types can be used without further approval:
18–4 Collection Policies for Best Practices (Chapter 7)
• The collections staff has primary responsibility for receivable collection, but may call on the assistance of the originating salesperson if normal collection techniques prove ineffective.
• Senior management shall collectively review and adjust the corporation’s product and services pricing policy at least annually.
• The collections staff can write off individual invoice balances of up to $ _, not to exceed $ _ in total per customer during a _ month period, with no additional approval
• The credit manager must approve all credit requests exceeding $ prior to issuance of a final, firm sales quote
18–5 Commission Policies for Best Practices (Chapter 8)
• The commission calculation system shall not be altered without approval by the chief executive officer
• Commissions shall be paid based only on cash received.
18–6 Costing Policies for Best Practices (Chapter 9)
• The company shall maintain material and labor record accuracy of at least _%, which shall be verified on a regular basis by the internal audit staff
Trang 12• A materials review board shall conduct an ongoing review of the inventory to tain which items should be disposed of, and to direct this disposition in the most prof- itable manner.
ascer-18–7 Filing Policies for Best Practices (Chapter 10)
• The company shall identify the legally mandated period during which various types of documents must be retained, and destroy the documents thereafter if no longer required for operational purposes.
18–8 Finance Policies for Best Practices (Chapter 11)
• The company shall periodically conduct an odd-lot purchase program at a premium of
no more than _% to buy out small investment holdings
• Employees are eligible to participate in the corporate 401(k) plan as of their hiring date as full-time employees or on their return from a leave of absence.
18–9 General Policies for Best Practices (Chapter 13)
• The company supports a formal training program for all employees, and requires the consideration of such training during the employee review process
18–10 Internal Auditing Policies for Best Practices (Chapter 15)
• The company shall comply with all internal control provisions of the Sarbanes-Oxley Act.
• All company managers are responsible for meeting the control provisions of the Sarbanes-Oxley Act.
18–11 Inventory Policies for Best Practices (Chapter 16)
• A materials review board shall conduct an ongoing review of the inventory to tain which items should be disposed of, and to direct this disposition in the most profitable manner
ascer-• The company will reject all received items for which no prior authorization was issued.
• All inventory transactions shall be recorded in the warehouse management system database within _ minutes of their occurrence
• The management team shall regularly review the company’s products, product options, and supporting parts structure to cancel unprofitable items and eliminate redundancy.
• The management team shall endeavor to reduce the company’s inventory investment
to the minimum level, subject to constraints imposed by profitability, warranty, and customer service objectives
18–12 Payroll Policies for Best Practices (Chapter 17)
• The company will not issue advances on employee pay.
• The company does not make purchases on behalf of employees
Trang 13• Employees can carry a maximum of hours of unused vacation and sick time ward into the next calendar year.
for-• The company will provide access to computer kiosks for all employees.
• All employees shall receive electronic payroll payments.
Trang 14Appendix B Supplier Contact
Information
This appendix contains the contact information for all suppliers listed in this book, including the name of the best practice and related chapter number to which each one was linked in the main text The contact information is listed in alphabetical order by company name.
If there is no corporate name attached to a Web site that is referenced in this book, then just the Web site is listed at the end of this appendix, sorted in alpha- betical order by Web site name.
Accruent, Inc.
1601 Cloverfield Blvd
Santa Monica, CA 90404310-526-6300
www.accruent.com Related best practice:Chapter 13, Create a contract terms database
Adobe Systems Incorporated
345 Park AvenueSan Jose, CA 95110408-536-6000
www.adobe.com Related best practice:Chapter 7, E-mail invoices in Acrobat format
Aligo
444 De Haro Street, Ste 211San Francisco, CA 94107415-593-8200
www.aligo.com Related best practice:Chapter 17, Track time with mobile phones
American Express
200 Vesey StreetNew York, NY 10285212-640-2000
www.americanexpress.com Related best practice:Chapter 3, Use procurement cards
471
Trang 15American Stock Transfer & Trust Company
59 Maiden Lane, Plaza Level
Related best practice:Chapter 3, Install a low-cost spend management system
Automated Collection Central, Inc.
170 Changebridge Rd
Montville, NJ 07045
800-542-0204
www.youvegotclaims.com
Related best practice:Chapter 7, Access up-to-date collection agency information
Automatic Data Processing (ADP)
Related best practices:
Chapter 17, Create employee self-service for payroll changesChapter 17, Give employees direct access to deduction dataChapter 17, Link the 401(k) plan to the payroll systemChapter 17, Use Web-based payroll outsourcing
Trang 16100 Spear St., 21st FloorSan Francisco, CA 94105415-995-2040
www.captara.com Related best practice:Chapter 11, Obtain financing through Internet lender sites
CCH Incorporated
2700 Lake Cook RoadRiverwoods, IL 60015800-525-3335
www.cch.com Related best practice:Chapter 13, Subscribe to an on-line tax information service
Ceridian Corporation
3311 E Old Shakopee RoadMinneapolis, MN 55425952-853-8100
www.ceridian.com Related best practices:
Chapter 17, Create employee self-service for payroll changesChapter 17, Use Web-based payroll outsourcing
CitiBank
399 Park AvenueNew York, New York 10043212-559-1000
www.citibank.com Related best practice:Chapter 11, Centralize foreign exchange management