copyrighted material · 2020. 3. 8. · work-in-process (wip), 100, 101 inventory-on-hand quantity...

213

INDEX

Numerics10-Q reports, 55

AAccountants

consignment inventory, 110Accounting

for individualsífundamental needs, 184Accounting and sales departments

collections task, 83–86discussion of, collection problems

with customers, 83fast cash application techniques, 84

Accounting department, 60, 61, 63, 73, 94, 198

Accounting practicesbiometric time clocks, 186computerized time clocks, 186Internet protocol (IP) phone timekeeping,

186mobile phone timekeeping, 186payroll, 186Radio Frequency Identification (RFID)

timekeeping, 186timekeeping systems, 186

Accounting systemprocedural issues, awareness of, 46

Accounts payable departmentW-9 form

automation of, 123–124credit application package, 124

fax transmission, 124in PDF format, 124

Accounts payable function, proper management of, 119

Accounts payable staff, 120–121authorization documents, for

drop-shipped goods, 123old supplier invoice, verification

of, 120Accounts payable systems, drop-shipping,

123Accounts payable(new), liabilities,

management of, 119–124Accounts receivable. See also Collection(s),

50, 56, 58, 64, 65, 71, 73, 77ACH authorization form, 62ACH. See Automated Clearing

House (ACH)Adobe Acrobat, 63Advanced shipping notices, 92Aisles

in production area, 101in warehouse, 99

Attorney letter, 72Automated Clearing House (ACH), 46

customer payments through, 46payments, reviewing of, bank accounts,

84review lockbox online, 84

Automated storage and retrieval system (ASRS), 108

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214 Index

BBacklog, eliminating, 102Bad debts, 66, 67, 68, 191Bank reconciliations, daily, post account

transaction, 46Banking operations

abandoning of, monthly bank reconciliation, 46

bank overlay structure, two layers of, 45daily reconciliation, current cash position,

improvement in, 46higher layer, 45lower layer, 45

Bankruptcy, 57, 208Bar-coding, 103Bin tracking, 95Blocks of supplier capacity, purchasing, 90Bonus, 13Bonus plans, 37, 100Budget

sliding bonus scale, 13sliding performance scale, 13

Budgeting processimpacts on, 23

CCalling hours, prime, 66Capital assets

additional investments, and cash flow, 114

constraint analysis, 114impact of, 114–115

Capital budget approvalfunding of, in-house venture capital firm,

118process, problems with, 117–118shifting investment authority, from

management team, 118significant cash payouts, in marketplace,

118Capital budgeting guidelines, alteration of,

118Capital budgeting systems

localized improvements, 115low-technology equipment, 115

robotscostly maintenance of technicians, and

heavy investments, 115manual labor, replacing of, 115

Cash discounts, missed, 59Cash flow

additional investment, 114cash flow alternatives, management

insight into, 114concept of, 113–118decision tree model, 114delay and reduced long-term revenues,

113modeling issues, 113

net present value, 113–114multiple variations on, 114project cost structure, altering of, 114projects, deferred start date of, 113

Cash flow cycle, 58Cash on delivery (COD), 56Cash-in-advance terms, 55Central timekeeping system

regimented timekeeping systems, 82services work, proper billing of, 82timesheets, 82

CheckNSF, 52, 59, 77

Checksìitís in the mailî approach with, 72restrictive endorsements on, 65

Clustering, orders, 98COD (cash on delivery), 55Collection agencies, 77, 78Collection database, 69Collection department, 68, 72, 74Collection fees, reimbursement of, 52Collection letters, 72Collection manager, 65, 69, 70, 78Collection staff

base deduction management on, incoming volume, 85

transaction volume, 84Collection(s)

policies-and-procedures model for, 68prioritizing, 66

bindex.fm 14 Wednesday, October 11, 2006 6:40 PM

Index 215

Commission plans, 67Communication

and business technology implementation, 151–152

maintaining a high level of, 67sales and credit departments, 54with credit customers, 53

Companyaccounting of records

daily bank reconciliationchecking deposits, and incoming

ACH payments, 46electronic receipts, recording of, 46

accounts payablebenefits of, 120payment factory, 120

accounts payable environment, 119–120Adobe Acrobat Professional, e-mail

electronic form, 124bankruptcy creditor claim, 85–86

selling of, 85claims purchasers, acquiring multiple

creditor claims, 85consigned inventory, 110excess inventory, donation of, 109–110integrating customers, 185issuing of, post investor relations podcast,

126local banking partners with, 45obsolete consignment inventory

liability for, 110obsolete inventory, 109–110of international scale

cash collectionsacceleration of, 45operating on, 45–46

for efficient banking operations, 45payment approvals, management of, 120payment factories, problems with, 120proactively identifying, and mitigating

pricing inefficiencies, 183shorter bankruptcy period, 86tax laws, 161web site, creating W-9 form

custom programming, problem of, 124electronic form, 124

Company accounting systemdaily bank reconciliation

account transaction, posting of, 46daily work log, listing of, 46high transaction volume of, 46

daily review of, 46Complexity analysis

acquireeís revenue, sources of, 161balance-sheet assets and liabilities, 161level of risk, determination of, 160primary objective of, 160–161research and development partnerships,

and operating leases, 161Computerized payables system, 123Consignment arrangement, 57Consignment inventory management

common approach to, 110working capital, amount invested in

inventory, 110Contract management systems (CMS),

204–205adding RFID tags, and installing tracking

receivers, 205large firms, with subsidiaries and

locations, 204–205organizing contracts, management

apprised of, 204warning management of, 204

Corporate bonus planand budget, 11–13

Corporate budgeting process, 23Corporate structure

cash flows, centralized management of, 45internal control of, 46

Cost accountingin service organization

billable days on profitability, impact of, 29–30

billable hours report, 26breakeven billable percentage calcula-

tion, 28breakeven number of business days, 29employee profitability analysis, 27financial analysis, 26full labor cost per hour calculation, 27profitability analysis for services, 26


216 Index

Credit, 50, 56, 58, 64, 65, 71, 73, 77Credit application

information contained in, 52processing of, 53

Credit applicationsincomplete, 52

Credit balances, disposing of, 74Credit card payments, accepting, 60, 64Credit department

and sales department, 53monitoring of credit levels by, 53

Credit department, cost-benefit analysis, 79Credit eValuatorî report (Dun & Bradstreet),

51Credit insurance, 56Credit limits, preriodic reviews of, 59Credit manager, prospective customers,

prescreening of, 79Credit venue provisions, 52Credit. See also Collection(s), 51, 52, 55, 59Credit-reporting agencies, 51Credit-scoring model, 51CRM applications, See Customer

relationship management applications, 7

Cross-docking, 94, 95Cross-functional team, 150Customer

consignment agreements with, 57Customer inventory segregation, 96Customer invoice

clear invoice number, presenting of,, 80correct contact information, 80graphics and shading, elimination of, 80printing of, exact dollar amount, and date

of invoice, 80proper structuring of, 80–81shipping charge revenue, 82–83tasks of, 79–83

Customer relationship management (CRM) applications, 139

Customer riskscreating bad debt forecast, accuracy of,

86–87elaborate in-house risk scoring systems, 86

forecast based on, expected losses or loss probability, 86

loss probability, 86risk scoring

creating bad debt forecast, 86deriving bad debt percentage, 87

Customer shipmentsbilling department, correct paper flow to,

81comparing shipping log, to invoices, 81evaluated receipts, 81missed billings, avoidance of, 81–82prenumbering of, shipping documents, 81standard order entry system, institution of,

81unshipped back orders, investigation of, 81

Customersaddress changes of, 61and product options, 104and substitute products, 104cash flow cycle of, 58collecting information on, 54communication with, 53, 67, 70contact information on, 51, 60customer retention issues, retaining of,

182guarantors of, 56high volume of orders from new, 54leasing to, 57listening to, 74ownership of information on, 52personal information on, 69publicly-held, 55reviewing credit levels of, 59slow-paying, 70thanking, for timely payments, 71updating credit information on, 51xtiming of orders from, 54

Cycle-counting, 102

DData entry, manual, 103Database

collection, 69customer orders, 69relational, 147


Index 217

Database(s)deduction, 76document, 51

Delivery transit times, 90Deloitte Sarbanes-Oxley Integrated Services

Offering, 145Design, product, 21, 89, 103, 104Disclosure committee

accounting staff, 125department representatives, assembling

of, 125Discounts

cash, 51, 59, 64early payment, 60volume, 71

Document imaging system, 51Downtime, equipment, 101Drop-shipping, 94Drop-shipping payments, 121–123

accounts payable department, difficulty of, 121

purchase order authorization, replacing of, 122

Dun & Bradstreet, 51, 54Dun & Bradstreet Paydex and financial stress

scores, for businesses, 86Dunning letters, 70, 72, 77

EECV. See Expected commercial value (ECV)Electronic funds transfer, 71E-mail, sending dunning letters by, 72Employees

excess production by, 100training of, 3, 59

Engineering department, 93Enterprise resource planning (ERP), 119, 144

and boundary systems, 177application of, 175business transactions, 177establishment of, taxpayer identification

numbers, 178financial transactions, bank accounts, 179key role in, M&A environment, 179role of, 175–179

separation activities, 176

support of, separation activities, 176taxation-based business models, 178

Enterprise resource planning (ERP) financial systems

and development of financial archive, 141and user group meetings, 142and vendorís marketing strategy, 140, 141cost minimization with, 140current state of, 142extension of, 140maintenance strategy for, 140testing of, 140

Enterprise-wide applications. See also Enterprise resource planning financial systems, 165–166

and error handling, 134customer relationship management

(CRM), 139facilitating implementation of, 155

Enterprise-wide applications.See also Enterprise resource planning financial systems

and error handling, 150and organizational structure/culture, 149and traditional finance and accounting

role, 148customer relationship management, 144facilitating implementation of, 143–144potential pitfalls of, 145–147

Enterprise-wide applications. See also Enterprise source planning financial systems, 152

Equifax, 54Equipment downtime, 101ERP financial systems, see Enterprise

resource planning financial systems, 7ERP. See Enterprise resource planning (ERP)Error handling, 134European market and SAP system, 179Expected commercial value (ECV), 116Export-Import Bank, 58

FFair, Isaac and Company (FICO), 86FICO. See Fair, Isaac and Company (FICO)Final Payment, 65


218 Index

Finance organizationERP implementation, cost of, 177

Financial services firmpricing function

centralizing of, 183optimizing prices, 183

Financial statement disclosures, auditors, sensitivity of, 125–126

Floor-stock locations, distribution to, 95Funds, expenditure and early cancellation,

114

GGeneral and administrative expenses

planning and control ofspend management systems, 31–32

Goods, demanding return of, 57Grace period, 71Gravity-feed flow-through racking, 99Guarantee agreements, 56Guarantees, loan, 51Guarantors, 56

HHeadcount analysis

key customer accounts, 176local labor laws, or union-type contracts,

176separation activities, 176

IIinvestor relations podcast, LAME project

software, 126îitís in the mailî, 72Incentive pay system, 100Industry credit group, 51, 55In-house collection agencies, 79Initial public offering (IPO), 175Insurance

credit, 56shipping, 76

Integration driversaccount management, and coverage, 184campaigns and customer programs, 184merger to merger, varying from, 184services management, 184

Inventoryand consignment arrangements, 57and product obsolescence, 51cycle-counting, 102excess, 96, 107work-in-process (WIP), 100, 101

Inventory-on-hand quantity report, 102Investor relations podcast

Audacity software, downloading free copy of, 126

Audacity, recording podcast in, 126basic steps for, 126expensive bandwidth usage, monitoring

of, 126Investor relations podcasts, 126Investors/analysts, basic approach of, 126Invoice skipping, 59Invoices, 50, 56, 58, 64, 65, 71, 73, 77

and filing system, 51and monitoring customerís financial

condition, 51, 52, 55contact information on, 60due date for, 60early payment discounts on, 60filing of, 62incorrect information on, 61lost, 63periodic reviews of, 59recurring, 61simplifying layout of, 60timely issuance of, 201updating of, 51

Invoicing, customer invoicing topics (new), 79–83

Overdue stamp, 72IPO. See Initial public offering (IPO)IT department, see Information technology

department, 7

KKitting carts, 97

LLate fees, 69Lawsuits, 74, 162Lead times, order, 89


Index 219

Leasing agencies, 57Letter of credit (LOC), 58Liens, 55Loading, 197Lockboxes, 64Logging, 108, 199Lost invoices, 63, 72

MM&A. See Mergers and acquisitions (M&A)MA&D. See Merger, acquisition, and

divestiture (MA&D)Management, 38Manual data entry, 103Materials management systems, consignment

inventory, 110Merger, acquisition, and divestiture

(MA&D), 180Mergers

appropriate integration approach, 181Catch 22 for, 184customer and market focus

achieving integration value, 180–185aggressive competitors, luring

customers away, 180ballooning integration activities, 180challenges, laundry list of, 181

customer-facing functions, 181eight tips for, 181, 185eliminating product overlap, of customer

and market requirements, 183functional integration of, sales, marking,

service, channels, 185integration

customer rationale, rationalizing products around, 183

maintaining business continuity, 182internal functional integration, 185new CRM system, 185requiring organizations to revisit, 182Research and development (R&D),

product innovation efforts, 183resisting temptation, 185separation activities, 176synergies, customer-facing

functions, 184

value optimization efforts of, product and pricing strategy, 185

Mergers and acquisitions (M&A)ERP considerations, 177–179ERP package

pivotal role of, 175scope and time, 178supporting new company size, 178tax and legal structure, for new

company, 178time line in, 178

terms of sale, 177Merging companies

forward-looking customer, focus on, 185integration management, loosing in, 185tactical functional integration, 185thinking of, fundamentals for Day 1, 185

Messenger services, 64Monthly statement, 62Moravia corporation, 116

NNAEIR. See National Association for the

Exchange of Industrial Resources (NAEIR)

National Association for the Exchange of Industrial Resources (NAEIR)

acceptance letter, in use of inventory, 109documentation issuance, for tax claim,

109donor items, 109inventory donations, major channels of,

109stocks five times a year, catalog of, 109

National Association of Credit Managers,55, 66

Net present value (NPV), 116NPV. See Net present value (NPV)NSF checks, 59, 77

OObsolescence, product, 51, 104Options, product, 104Oracle, 133, 139, 165, 200Oracle Internal Control Manager, 145Order lead time, 89


220 Index

Ordersapproval of, 90clustering of, 98

Organizationscustomer-facing handbook, building

self-service tools, 184must-doís for each function, and making

table stakes, 184providing of, customer-facing functions,

184Overnight delivery services, 64, 105

PPartial payment, 56Payments in kind, 73Payroll

accounting practices, best methods in, 186Payroll department, automation of, 40–42Payroll measurements

computerized time clocks, 40direct deposit and payroll cards, 40employee self-service, 40locating and correcting errors, 40manual checks, 42tracking of, 42W-2c forms, problem tracking errors, 40web-based timekeeping systems, 40

Payroll performance measurement system, possible problem areas, detection of, 40

Payroll processing, outsourcing of, 40Payroll staff

error correction, 40underlying processes, 40

PDF file format, 63PeopleSoft, 139Perishable inventory, 96Personal guarantee, 52Picking tickets, 97, 98Picking tours, 98Pick-to-light system, 99Portable scale, 98Price discrimination, 69Process centering, 53, 75Product obsolescence, 51, 104

Product option, 104Project funding, variations on, 118Promissory note, 73Proof of receipt, 61Public companies, profitability forecasts, 87Publicly-held customers, 55Pull-through rate, 17–18

concern with use of, 18Fifth National Bank customer service, 17identification of low performers, 18

Pull-through rate!in call center environments, 18

Purchase money security interest (PMSI), 57Put-away (of received goods), 92, 93

RR&D operating budgets

incorporation of target costing into budget, 23–24

Racking systems, 94, 96, 107, 108Radio Frequency Identification (RFID),

186, 205creation of, tracking network, 205documents, tracking of, 205inventory tracking of, 205proximity badges, containing RFID tags,

186Radio-frequency scanners, 103Receipts, unplanned, 92Receiving area, 92, 93Regional warehouses, 105Relational database, 147Reminder letters, 70, 72Research and development (R&D)

allocation of funds, 116effectiveness of effort of, 24–25new-product revenues, 24products released in past years, revenue

from, 24products released within past years,

profits from, 24profit per R&D professional, 25project ranking

apportioning investable funds, into multiple categories, 115


Index 221

calculation of, R&D waste, 116expected commercial value, 115–118

management of, 116minimum return-on-investment

hurdle rate, 115revenue per R&D professional, 24vintage year of expenses, 25vintage year revenue., 25

RFID. See Radio Frequency Identification (RFID)

Robinson-Patman Act, 69

SSafety stock, 89, 90, 105Sales

analysis ofpull-through rate, 17–18sales throughput analysis, 18–19

Sales and marketing departmentcredit department, 79credit prescreening

use of, 79–87Sales orders, drop-shipping notification

process, problem with, 122Sales staff and sales department

and credit department, 50, 53, 54and credit policy, 50and deductions, 77and policies-and-procedures model, 67commuting with, 67

Sales throughput analysis, 18–19SAP, 133, 139, 165, 200Sarbanes-Oxley Act, 160Scales, portable, 98Scanners, radio-frequency, 103Securities and exchange commission, 127Securities and Exchange Commission (SEC),

129Senior lien, 57Senior management, 12, 68, 104, 210Separation activities, 176–177Shareholders, financial statement

disclosures, 125Shipping charges

creation of, default invoicing template, 83

footer to shipping document, adding of, 83

freight sales tax, use of, 83summary price,, 83

Shipping insurance, 76Shipping orders

routing of customers, to dock for pickups, 82

shipping logs, sample shipment authorizations, 81

Shortened terms, 58Siebel, 165Slow-paying customers, 70Small claims court, 74Spend management systems, 31–32

for small business companies, 31in-house, 32use of, 31

Statements, monthly, 62Storage racks, 97, 108Strategic vision, and credit policy, 50Subsidiaries, 56, 195Substitute products, 104Supplier

maintenance of, 110streamlining approval process with, 91supply chain, reducing of, 110

Suppliersand order lead times, 89product-design process, 89purchasing blocks of capacity from, 90retained ownership of shipped goods by, 91

TTarget costing, 23–25Tax complexity

book and tax income, reported level of, 161Tax rate

complexity and risk, contribution of, 161Taxpayer identification number (TIN), 121

verification program, 121Telephone

accepting payments over the, 64prime calling hours, 66thanking customers by, 71


222 Index

Terms, shortened, 58Timing, of customer orders, 54TIN. See Taxpayer identification number

(TIN)Trade promotions, 75Training

employee, 60employees, 4

Training, employees, 66, 171Transit times, delivery, 90Transit, goods damaged in, 76

UUCC-1 form, 56Unapplied payments, clearing up, 65Unclaimed property laws, 74Unplanned receipts, 92

VVendor master file

accounting software, report writer, 121cleaning of, 121

Venue provision, 52Voice Over Internet Protocol (VoIP), 186VoIP. See Voice Over Internet Protocol

(VoIP)Volume discount, 71

WW-9 Form

tax payer identification number and certification, 123

Warehouseeliminating inventory from, 95elimination of, 93of customers, 55receiving area, 92regional, 105

Web sites, customer payment information on, 71

Web-based timekeeping system, implementation of, 82

Work-in-process (WIP) inventory, 100, 101Write-off, 75, 106


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