Risk in Sales by yfk12404

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									SAP Business Process: Sales & Customer Service
                                                                             Risk                                  (Prior
 Ref #     Process        Sub Process               Process Objective                                                                          Control
                                                                                       to establishing control)

                                                                             Data may be entered incorrectly, resulting     Pricing database has been created to provide
            Sales     Sales & Marketing   Pricing information is accurate.   in delays or errors in sales order             customer service with price information
                                                                             information.                                   developed and approved by management.




                                                                             Data may be entered incorrectly, resulting     Standard price forms are used internally to
            Sales     Sales & Marketing   Pricing information is accurate.   in delays or errors in sales order             provide relevant information about prices,
                                                                             information.                                   rebates, and payment conditions.




                                                                             Data may be entered incorrectly, resulting     Standard forms are used internally to capture
            Sales     Sales & Marketing   Pricing information is accurate.   in delays or errors in sales order             relevant information regarding rebates and
                                                                             information.                                   payment conditions.




                                                                                                                            Written confirmation of commercial and
                                                                             Data may be entered incorrectly, resulting     financial contract conditions, whether by
            Sales     Sales & Marketing   Pricing information is accurate.   in delays or errors in sales order             specific notification or communicated
                                                                             information.                                   through invoice terms and conditions, is sent
                                                                                                                            to the customer.



                                                                                                                            Pricing set up/adjustments, instructions for
                                                                             Data may be entered incorrectly, resulting     rebates and cash discount conditions
            Sales     Sales & Marketing   Pricing information is accurate.   in delays or errors in sales order             decided by local sales/account managers are
                                                                             information.                                   supported by written evidence or
                                                                                                                            authorization from a higher level.




                                                                                                                            Agency contracts with third parties or other
            Sales     Sales & Marketing   Supply Agreements                  Locked into an unfavorable agreement.          Huntsman entities exist and are reviewed and
                                                                                                                            approved by legal before implementation.



                                                                                                                            Contracts with outside customers/suppliers
                                                                                                                            or other Huntsman entities exist and are
                                                                                                                            either uniquely drafted and reviewed by legal
            Sales     Sales & Marketing   Supply Agreements                  Locked into an unfavorable agreement.
                                                                                                                            before execution or a pre-approved master
                                                                                                                            legal contract form is utilized for the
                                                                                                                            arrangements.


                                                                             Sales margins are not regularly reviewed by
                                                                                                                         Management reviews sales margins on a
            Sales     Sales & Marketing   Sales margins are reasonable.      management for reasonableness and
                                                                                                                         regular basis.
                                                                             accuracy.


                                                                             Data may be entered incorrectly, resulting     Data integrity and completeness is ensured
            Sales     Order Entry         Sales data is complete.            in delays or errors in sales order             by utilizing consistent forms with
                                                                             information.                                   sequentially assigned order numbers.


                                                                                                                            Financial information contained within
                                                                             Data may be entered incorrectly, resulting
                                                                                                                            customer master file cannot be
            Sales     Order Entry         Sales data is complete.            in delays or errors in sales order
                                                                                                                            changed/overridden by employees entering
                                                                             information.
                                                                                                                            order information.




                                                                                                                                                                            1
SAP Business Process: Sales & Customer Service
                                                                                    Risk                                   (Prior
 Ref #     Process        Sub Process                Process Objective                                                                                  Control
                                                                                               to establishing control)

                                                                                                                                    Customer terms and credit information
                                                                                    Data may be entered incorrectly, resulting
                                                                                                                                    contained within customer master file cannot
            Sales     Order Entry         Sales data is complete.                   in delays or errors in sales order
                                                                                                                                    be changed/overridden by employees
                                                                                    information.
                                                                                                                                    through the order entry function.



                                                                                                                                    Proper credit review and authorization is
            Sales     Order Entry         Credit Review                             Customer's ability to pay.                      required from credit organization. Order
                                                                                                                                    acceptance is adequately authorized.



                                                                                                                                    Customer credit limits have been
                                                                                                                                    appropriately established. Blocking facility
            Sales     Order Entry         Credit Review                             Customer's ability to pay.
                                                                                                                                    exists before accepting new orders above
                                                                                                                                    customer's credit limit.




                                                                                                                                    Delivery block is placed on orders for
            Sales     Order Entry         Credit Review                             Customer's ability to pay.
                                                                                                                                    overdue customers.




                                                                                                                                    Sales or Delivery block is placed on orders
                                                                                                                                    from customers that are considered a 'high
            Sales     Order Entry         Credit Review                             Customer's ability to pay.                      risk' and have an overdue balance. Credit
                                                                                                                                    notification occurs for 'medium' or 'low' risk
                                                                                                                                    customers with an overdue balance.


                                                                                    Free of Charge sales orders are not subject
                                                                                    to management review and approval.          Appropriate order types have been
            Sales     Order Entry         Free of charge' Sale order
                                                                                    Customers may be inappropriately supplied configured for ‘free of charge’ orders.
                                                                                    with goods or services free of charge.


                                                                                                                                    Customer Service/Sales representative has
            Sales     Order Entry         Inventory availability / Production plan Stock outs, inability to fill customer order     read only access to inventory management
                                                                                                                                    system.



                                                                                                                                    Adequately trained customer service
                                                                                                                                    representatives are familiar with necessary
                                          Issue Shipping/Delivery                   Improper documentation may violate local        documentation and statutory requirements.
            Sales     Order Entry
                                          Notification/Bill of Lading               statutory requirements. Potential fines.        Adequate checklist has been established to
                                                                                                                                    prompt customer service to follow document
                                                                                                                                    requirements.



                                                                                    Customer returns may be not be recorded
                                                                                    accurately or completely. The balance of    Proper authorization is required to resolve
            Sales     Order Entry         Product Returns / Claims
                                                                                    inventory and sales may be misstated in the customer claims.
                                                                                    financial statements.


                                                                                                                                    Return order types are configured and are
                                                                                    Customer returns may be not be recorded         associated with appropriate goods
                                                                                    accurately or completely. The balance of        movement types and sales order. The
            Sales     Order Entry         Product Returns / Claims
                                                                                    inventory and sales may be misstated in the     inventory system is reviewed to ensure that
                                                                                    financial statements.                           goods have been returned and inspected
                                                                                                                                    before credit is granted.




                                                                                                                                                                                     2
SAP Business Process: Sales & Customer Service
                                                                                  Risk                                 (Prior
 Ref #     Process        Sub Process               Process Objective                                                                               Control
                                                                                            to establishing control)


                                                                                                                                Reconciliation of ledgers and sub ledgers is
                                          Maintenance of Customer balance,        Loss of revenue from unbilled shipments.
                                                                                                                                performed to ensure that all inventory
            Sales     Order Entry         Accounts Receivable, and Inventory      Under/Overstatement of inventory and
                                                                                                                                shipped was properly invoiced and recorded.
                                          records.                                accounts receivable balances.
                                                                                                                                Open orders are appropriate monitored.




                                          Maintenance of Customer balance,        Loss of revenue from unbilled shipments.
                                                                                                                                Open orders and missed shipments are
            Sales     Order Entry         Accounts Receivable, and Inventory      Under/Overstatement of inventory and
                                                                                                                                appropriately monitored.
                                          records.                                accounts receivable balances.




                                                                                                                                Authorization to establish/change payment
                      Pricing, Rebates &
                                                                                                                                terms is appropriately restricted.
            Sales     Commission Master Payment terms                             Negative impact on working capital
                                                                                                                                Management review and approval of change
                      File
                                                                                                                                is required.


                                                                                                                                Access to customer master file is restricted
                                                                                                                                to authorized individuals. Sufficient audit trail
                      Pricing, Rebates &                                          Customer credit limits or banking
                                                                                                                                of changes to database is maintained.
            Sales     Commission Master Maintenance of Customer Master File       information could be changed or
                                                                                                                                Review of exception reports showing any
                      File                                                        compromised.
                                                                                                                                deviation from the master file profile is
                                                                                                                                performed.



                      Pricing, Rebates &                                                                                        Authorization lists for additions / updates /
                                                                                  Loss of revenue due to unauthorized price
            Sales     Commission Master Maintenance of Pricing Database                                                         exceptions to pricing database. Access to
                                                                                  changes
                      File                                                                                                      pricing tables is appropriately restricted.




                                                                                                                                Reconciliation of customer accounts to
                                                                                                                                customer shipments are performed. Sales
                                                                                  Failure to invoice customer for all
                                                                                                                                order information is reconciled with invoices.
                                          Invoicing for single order or monthly   shipments that occurred in the month.
            Sales     Invoicing                                                                                                 Billing document types are configured to
                                          billing                                 Potential loss of revenue from: inaccurate
                                                                                                                                automatically generate and post the
                                                                                  billing, exchange rate conversion
                                                                                                                                associated accounting document.
                                                                                                                                Sequentially numb



                                                                                                                            Credit notes are issued to support customer
                                                                                                                            rebates. The authority to release these notes
                                          Credit notes are properly prepared and Credit notes may not be properly prepared,
            Sales     Invoicing                                                                                             is appropriately assigned within the
                                          authorized.                            authorized, and/or issued.
                                                                                                                            organization. Administrative controls are in
                                                                                                                            place to monitor credit notes issued.



                                                                                                                                Regular physical inventory occurs of
                                                                                                                                distributor if inventory is housed at
                                                                                  Balance of inventory and sales may be
            Sales     Invoicing           Distributors                                                                          distributor location. Monthly reconciliation of
                                                                                  misstated in the financial statements.
                                                                                                                                inventory balance with Distributor's records
                                                                                                                                is performed.




                                                                                  Balance of inventory and sales may be         Monthly reconciliation of inventory balance
            Sales     Invoicing           Distributors
                                                                                  misstated in the financial statements.        with Distributor's records is performed.




                                                                                                                                                                                    3
SAP Business Process: Sales & Customer Service
                                                                                    Risk                                   (Prior
 Ref #     Process        Sub Process                 Process Objective                                                                                 Control
                                                                                              to establishing control)

                                                                                                                                    Ensure regular physical inventory occurs at
                                                                                    Balance of inventory and sales may be           customer's location. Monthly reconciliation
            Sales     Invoicing            Consignment Sales
                                                                                    misstated in the financial statements.          of inventory balance with location records is
                                                                                                                                    performed.




                                                                                    Balance of inventory and sales may be           Monthly reconciliation of inventory balance
            Sales     Invoicing            Consignment Sales
                                                                                    misstated in the financial statements.          with location records is performed.




                                                                                    Balance of inventory and sales may be           Customers are invoiced on a regular basis
            Sales     Invoicing            Consignment Sales
                                                                                    misstated in the financial statements.          (daily, monthly) for product consumed.



                                                                                    Partial deliveries are not appropriately        Management reviews all outstanding partial
                                                                                    monitored; resulting invoices may be based      deliveries via standard reports which enable
                                           Partial deliveries are appropriately     on the full delivery rather than the quantity   management to determine whether partial
            Sales     Invoicing
                                           monitored and controlled.                actually delivered. The remaining portion of    deliveries are invoiced correctly and the
                                                                                    the delivery is not completed on a timely       balance of the delivery is completed and
                                                                                    basis and/or invoiced accurately.               invoiced.




                                           Adequate segregation of duties may       Employees may be able to inappropriately        Adequate segregation of duties exists
                      Segregation of       not exist between the maintenance of     change customer master files and issue          between day-to-day order processing and
            Sales
                      Duties               customer master files and the issuance   customer rebates / credits without proper       pricing, rebates/credit notes and commission
                                           of credit notes / rebates.               authorization.                                  master file maintenance.



                                                                                   Order entry personnel may override credit
                                           Maintain separate job responsibilities
                                                                                   limits established by the finance             Responsibility to perform order entry and the
                      Segregation of       among employees to reduce the
            Sales                                                                  organization which would result in selling to ability to add/update credit limits is
                      Duties               opportunity of defalcations or override
                                                                                   customers that have a higher risk of          performed by separate individuals.
                                           management objectives.
                                                                                   defaulting on payment.

                                           Maintain separate job responsibilities
                                                                                   Personnel that have the ability to set-up a Responsibility to perform the setup of
                      Segregation of       among employees to reduce the
            Sales                                                                  rebate and authorize the payment of rebates rebates and authorize payment of rebates is
                      Duties               opportunity of defalcations or override
                                                                                   may misallocate corporate resources.        performed by separate individuals.
                                           management objectives.

                                           Maintain separate job responsibilities
                                                                                   Personnel that have the ability to maintain Responsibility to maintain customer master
                      Segregation of       among employees to reduce the
            Sales                                                                  the customer master file and issue credit   file and issuing credit notes is performed by
                      Duties               opportunity of defalcations or override
                                                                                   notes may misallocate corporate resources. separate individuals.
                                           management objectives.


                                                                                                                                    Specific criteria is met before a product
                                                                                                                                    movement is classified as a sale: (1)
                      Revenue                                                       Sales revenue is posted to the financials       Documented customer arrangement exists
            Sales                          US GAAP Compliance
                      Recognition Policy                                            before the revenue cycle is comple.             (2) Title has transferred to the purchaser (3)
                                                                                                                                    Seller's price is fixed or determinable (4)
                                                                                                                                    Customer collectibility is reasonably assure




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