QAD Financial Shared Services

1. QAD Financial Shared Services • Shmuel Yaffa – QAD Business Consultant Strategic Accounts

2. Agenda • What are Financial Shared Services ? • What benefits do they provide ? • How does QAD Enterprise Edition supports Financial Shared Services ?

3. What are Financial Shared Services • Centralized approach to key Financial activities across multiple business units • In a central location • Remote from the parts of the organization • Typically for • Standardized flows • High labor-intensive flows • Activities that can benefit from economies of scale • Examples : • Accounts Receivable • Accounts Payable

4. Benefits • Harmonize the corporate accounting processes • Reduce back-office costs / economies of scale • Allow business units to focus on core activities • Increase productivity and quality • Free up working capital / increase cash flow

5. Benefits • Standardize the corporate accounting processes • Uniform process improvements • Increase corporate control over business units • Reduce back-office costs • Through economies of scale • Specialization • Allow business units to focus on core activities • Increase productivity and quality • Support growth • Increase customer and supplier visibility • Improve customer and supplier relations • Free up working capital / increase cash flow • Single cash pool

6. Different levels of Shared Services • Centralized organization, but all transactions remain within domain • Economies of scale / harmonized processes • Increase corporate control over business units • Centralized organization, working in a shared services environment • Economies of scale / harmonized processes • Increase corporate control over business units • Increase customer / supplier visibility • Free up working capital / increase cash flow

7. Traditional viewDifferent organizationsDifferent ERP domains Each business unit has its own administration. Operating in silo’s Business Unit B Business Unit C Business Unit A

8. First step Centralized organization Different ERP domains Single shared administration Switches workspaces to work in different domains Business Unit B Business Unit C Business Unit A

9. First step Centralized organization Different ERP domains Single shared administration Switches workspaces to work in different domains Business Unit B Business Unit C Business Unit A

10. Second step Centralized organization Shared Services ERP domain Single shared administration Works in the shared services domain. Shared Services Automated postings between shared services and business units Business Unit B Business Unit C Business Unit A

11. Second step Centralized organization Shared Services ERP domain Single shared administration Works in the shared services domain. Shared Services Automated postings between shared services and business units Business Unit B Business Unit C Business UnitA

12. Enterprise Financials Financial Analytics Management Reporting Multi-GAAP Budgeting Governance, Risk & Compliance Consolidations Allocations Financial Shared Services Credit Management Tax Management GeneralLedger MultiCurrency Accounts Receivable Accounts Payable Banking/CashManagement CostManagement FixedAssets Internationalization EnhancedControls Vertex Sales andUse Tax Interface Logistics Accounting QAD Enterprise Financials

13. Centralized Data Management • Centralized Chart of accounts • Centralized Customer Master • Cross Domain Credit management • Centralized management of Exchange Rates • Centralized Management of Suppliers • Centralized Management of Daybooks

14. Financial Shared Services in QAD EECrossing Domains Single shared administration Works in the shared services domain. Shared Services Domain Z Automated postings between shared services and business units Business Unit Domain B Business Unit Domain C Business Unit Domain A

15. Quick benefits with QAD Enterprise Edition • Shared Services for Accounts Receivables • Shared Services for Accounts Payables

16. Accounts Payable “The practices of a company in controlling its accounts payable processing influences the companies cash flow and supplier relationships” • Keep suppliers happy while protecting cash flow • Guarantuee correctness and genuiness of payments • Streamline process : minimize paperwork, minimize expense

17. Accounts Payable example • Different domains work with same supplier • Supplier sends invoices to local business units • Entered, matched and released for payment in business unit Supplier 1000 Invoice 2500 EUR to A Invoice 10000 EUR to B Shared Services AP balance for Supplier 1000 : 10000 EUR AP balance for Supplier 1000 : 2500 EUR C B A

18. Accounts Payable example • Different domains work with same supplier • Supplier sends invoices to local business units • Entered, matched and released for payment in business unit • Shared visibility of Supplier position across business units • Optimize supplier relations / leverage buying position Shared AP balance for Supplier 1000 : 12500 EUR Shared Services AP balance for Supplier 1000 : 10000 EUR AP balance for Supplier 1000 : 2500 EUR C B A

19. Accounts Payable example • Different domains work with same supplier • Supplier sends invoices to local business units • Entered, matched and released for payment in business unit • Shared visibility of Supplier position across business units • Optimize supplier relations / leverage buying position • Payments are processed from shared services domain • Optimizes cash pooling across business units Single payment processed for 12500 EUR  Shared AP balance for supplier 1000 : 0 EUR Created interco receivables : 2500 EUR from Business Unit A | 10000 EUR from Business Unit B Shared Services AP balance for Supplier 1000 : closed Created interco debt of 10000 EUR AP balance for Supplier 1000 : closed Created interco debt of 2500 EUR C B A

20. Accounts Payable Shared ServicesFree up working capital Shared Services Single Cash Buffer of 150,000 EUR instead of 3 x 100,000 EUR Business Unit A Business Unit B Business Unit C Cash Buffer of 100,000 EUR Cash Buffer of 100,000 EUR Cash Buffer of 100,000 EUR

21. Accounts Receivable “The collection of outstanding receivables represents the single most important source of cash for all organizations selling goods on open account.” • Manage Balance Sheet : Monitor Receivables Balance • Ensure Proper Payment : Mitigate Credit Risk • Protect Cash : Convert Receivables quickly to Cash Collection

22. Accounts Receivable example • Different domains work with same customer • Each site sends invoices to customer Customer 1000 Site A invoices 2500 EUR Site B invoices 10000 EUR Shared Services AR balance for Customer 1000 : 10000 EUR AR balance for Customer 1000 : 2500 EUR C B A

23. Accounts Receivable example • Different domains work with same customer • Each site sends invoices to customer • Shared visibility of Customer position across business units • Optimize credit management / dunning process / ... Shared AR balance for Customer 1000 : 12500 EUR Shared Services AR balance for Customer 1000 : 10000 EUR AR balance for Customer 1000 : 2500 EUR C B A

24. Accounts Receivable example • Different domains work with same customer • Each site sends invoices to customer • Shared visibility of Customer position across business units • Optimize credit management / dunning process / ... • Cash received centrally • Optimize cash pooling across business units Single payment received for 12500 EUR  Shared AR balance for customer 1000 : 0 EUR Created interco payables : 2500 EUR to Business Unit A | 10000 EUR to Business Unit B Shared Services AR balance for Customer 1000 : closed Created interco credit of 10000 EUR AR balance for Customer 1000 : closed Created interco credit of 2500 EUR C B A

25. Centralized Month End Close • Close periods by entity Group • Run Consistency Check by multiple entities • Run revaluations by groups of entities • Run Reports by groups of entities • Aging Reports • Dashboards • Browses • Consolidated Financial Reports