SAP Sales Business Objectives Risk & Control Matrix
Short Description
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Description
SAP Business Process: Sales & Customer Service Ref #
Process
Sub Process
Process Objective
Risk (Prior to establishing control)
Control
Sales
Sales & Marketing
Pricing information is accurate.
Data may be entered incorrectly, resulting in delays or errors in sales order information.
Pricing database has been created to provide customer service with price information developed and approved by management.
Sales
Sales & Marketing
Pricing information is accurate.
Data may be entered incorrectly, resulting in delays or errors in sales order information.
Standard price forms are used internally to provide relevant information about prices, rebates, and payment conditions.
Sales
Sales & Marketing
Pricing information is accurate.
Data may be entered incorrectly, resulting in delays or errors in sales order information.
Standard forms are used internally to capture relevant information regarding rebates and payment conditions.
Sales
Sales & Marketing
Pricing information is accurate.
Data may be entered incorrectly, resulting in delays or errors in sales order information.
Written confirmation of commercial and financial contract conditions, whether by specific notification or communicated through invoice terms and conditions, is sent to the customer.
Pricing set up/adjustments, instructions for rebates and cash discount conditions decided by local sales/account managers are supported by written evidence or authorization from a higher level.
Sales
Sales & Marketing
Pricing information is accurate.
Data may be entered incorrectly, resulting in delays or errors in sales order information.
Sales
Sales & Marketing
Supply Agreements
Locked into an unfavorable agreement.
Agency contracts with third parties or other 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 before execution or a pre-approved master legal contract form is utilized for the arrangements.
Sales
Sales & Marketing
Supply Agreements
Locked into an unfavorable agreement.
Sales
Sales & Marketing
Sales margins are reasonable.
Sales margins are not regularly reviewed by Management reviews sales margins on a management for reasonableness and regular basis. accuracy.
Sales
Order Entry
Sales data is complete.
Data may be entered incorrectly, resulting in delays or errors in sales order information.
Data integrity and completeness is ensured by utilizing consistent forms with sequentially assigned order numbers.
Sales
Order Entry
Sales data is complete.
Data may be entered incorrectly, resulting in delays or errors in sales order information.
Financial information contained within customer master file cannot be changed/overridden by employees entering order information.
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SAP Business Process: Sales & Customer Service Ref #
Process
Sub Process
Process Objective
Risk (Prior to establishing control)
Control
Sales
Order Entry
Sales data is complete.
Data may be entered incorrectly, resulting in delays or errors in sales order information.
Customer terms and credit information contained within customer master file cannot be changed/overridden by employees through the order entry function.
Sales
Order Entry
Credit Review
Customer's ability to pay.
Proper credit review and authorization is required from credit organization. Order acceptance is adequately authorized.
Sales
Order Entry
Credit Review
Customer's ability to pay.
Customer credit limits have been appropriately established. Blocking facility exists before accepting new orders above customer's credit limit.
Sales
Order Entry
Credit Review
Customer's ability to pay.
Delivery block is placed on orders for overdue customers.
Sales
Order Entry
Credit Review
Customer's ability to pay.
Sales or Delivery block is placed on orders from customers that are considered a 'high risk' and have an overdue balance. Credit notification occurs for 'medium' or 'low' risk customers with an overdue balance.
Sales
Order Entry
Free of charge' Sale order
Free of Charge sales orders are not subject to management review and approval. Appropriate order types have been Customers may be inappropriately supplied configured for ‘free of charge’ orders. with goods or services free of charge.
Sales
Order Entry
Inventory availability / Production plan Stock outs, inability to fill customer order
Sales
Order Entry
Issue Shipping/Delivery Notification/Bill of Lading
Sales
Order Entry
Product Returns / Claims
Customer returns may be not be recorded accurately or completely. The balance of Proper authorization is required to resolve inventory and sales may be misstated in the customer claims. financial statements.
Product Returns / Claims
Customer returns may be not be recorded accurately or completely. The balance of inventory and sales may be misstated in the financial statements.
Sales
Order Entry
Improper documentation may violate local statutory requirements. Potential fines.
Customer Service/Sales representative has read only access to inventory management system.
Adequately trained customer service representatives are familiar with necessary documentation and statutory requirements. Adequate checklist has been established to prompt customer service to follow document requirements.
Return order types are configured and are associated with appropriate goods movement types and sales order. The inventory system is reviewed to ensure that goods have been returned and inspected before credit is granted. 2
SAP Business Process: Sales & Customer Service Ref #
Process
Sub Process
Process Objective
Risk (Prior to establishing control)
Control
Reconciliation of ledgers and sub ledgers is performed to ensure that all inventory shipped was properly invoiced and recorded. Open orders are appropriate monitored.
Sales
Order Entry
Maintenance of Customer balance, Accounts Receivable, and Inventory records.
Loss of revenue from unbilled shipments. Under/Overstatement of inventory and accounts receivable balances.
Sales
Order Entry
Maintenance of Customer balance, Accounts Receivable, and Inventory records.
Loss of revenue from unbilled shipments. Under/Overstatement of inventory and accounts receivable balances.
Open orders and missed shipments are appropriately monitored.
Sales
Pricing, Rebates & Commission Master Payment terms File
Negative impact on working capital
Authorization to establish/change payment terms is appropriately restricted. Management review and approval of change is required.
Sales
Pricing, Rebates & Commission Master Maintenance of Customer Master File File
Customer credit limits or banking information could be changed or compromised.
Access to customer master file is restricted to authorized individuals. Sufficient audit trail of changes to database is maintained. Review of exception reports showing any deviation from the master file profile is performed.
Sales
Pricing, Rebates & Commission Master Maintenance of Pricing Database File
Loss of revenue due to unauthorized price changes
Authorization lists for additions / updates / exceptions to pricing database. Access to pricing tables is appropriately restricted.
Failure to invoice customer for all shipments that occurred in the month. Potential loss of revenue from: inaccurate billing, exchange rate conversion
Reconciliation of customer accounts to customer shipments are performed. Sales order information is reconciled with invoices. Billing document types are configured to automatically generate and post the associated accounting document. Sequentially numb
Sales
Invoicing
Invoicing for single order or monthly billing
Sales
Invoicing
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, is appropriately assigned within the authorized. authorized, and/or issued. organization. Administrative controls are in place to monitor credit notes issued.
Sales
Invoicing
Distributors
Balance of inventory and sales may be misstated in the financial statements.
Regular physical inventory occurs of distributor if inventory is housed at distributor location. Monthly reconciliation of inventory balance with Distributor's records is performed.
3
SAP Business Process: Sales & Customer Service Ref #
Process
Sub Process
Process Objective
Risk (Prior to establishing control)
Control
Sales
Invoicing
Distributors
Balance of inventory and sales may be misstated in the financial statements.
Monthly reconciliation of inventory balance with Distributor's records is performed.
Sales
Invoicing
Consignment Sales
Balance of inventory and sales may be misstated in the financial statements.
Ensure regular physical inventory occurs at customer's location. Monthly reconciliation of inventory balance with location records is performed.
Sales
Invoicing
Consignment Sales
Balance of inventory and sales may be misstated in the financial statements.
Sales
Invoicing
Consignment Sales
Balance of inventory and sales may be misstated in the financial statements.
Customers are invoiced on a regular basis (daily, monthly) for product consumed.
Management reviews all outstanding partial deliveries via standard reports which enable management to determine whether partial deliveries are invoiced correctly and the balance of the delivery is completed and invoiced.
Monthly reconciliation of inventory balance with location records is performed.
Sales
Invoicing
Partial deliveries are appropriately monitored and controlled.
Partial deliveries are not appropriately monitored; resulting invoices may be based on the full delivery rather than the quantity actually delivered. The remaining portion of the delivery is not completed on a timely basis and/or invoiced accurately.
Sales
Segregation of Duties
Adequate segregation of duties may not exist between the maintenance of customer master files and the issuance of credit notes / rebates.
Employees may be able to inappropriately change customer master files and issue customer rebates / credits without proper authorization.
Adequate segregation of duties exists between day-to-day order processing and pricing, rebates/credit notes and commission master file maintenance.
Sales
Segregation of Duties
Order entry personnel may override credit Maintain separate job responsibilities limits established by the finance among employees to reduce the organization which would result in selling opportunity of defalcations or override to customers that have a higher risk of management objectives. defaulting on payment.
Responsibility to perform order entry and the ability to add/update credit limits is performed by separate individuals.
Sales
Segregation of Duties
Maintain separate job responsibilities among employees to reduce the opportunity of defalcations or override management objectives.
Responsibility to perform the setup of rebates and authorize payment of rebates is performed by separate individuals.
Sales
Segregation of Duties
Maintain separate job responsibilities Personnel that have the ability to maintain Responsibility to maintain customer master among employees to reduce the the customer master file and issue credit file and issuing credit notes is performed by opportunity of defalcations or override notes may misallocate corporate resources. separate individuals. management objectives.
Sales
Revenue Recognition Policy
US GAAP Compliance
Personnel that have the ability to set-up a rebate and authorize the payment of rebates may misallocate corporate resources.
Sales revenue is posted to the financials before the revenue cycle is comple.
Specific criteria is met before a product movement is classified as a sale: (1) Documented customer arrangement exists (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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