Year ends on March 31- Due priority should be given by all stakeholders

Year-end procedure.  In India, the accounting year is April to March.  Accounting year 09-10 has ended on 31st March 2010.  Important procedure is given below to plan the ‘year ending’ in ERP.  The following procedure for ERP rollout is very important.  Due priority should be given by the stakeholders.

The procedure will vary depending on your current status as follows:

1.    ERP status is ‘go live’.  Users are online and entering transaction in real-time.  The closing stock was already entered.

2.    ERP is being implemented.  Conference Room Pilot (CRP) run is done.  You have to  decide on the cut-off date.  You may think of considering 31/03/2012 as cut-off date, or any suitable date.  The day after the cut-off date, users go online.  That is ‘Go live’, and embraces New Year 2012-2013 with more accuracy in inventory management and tighter discipline.   There are two kinds of closing balances that are required:

Accounts closing balance:  Debtor.  Creditors.  Closing balance of stock.

It is important to note that both inventory and accounts are tightly linked in ERP.

·         FAQ: “Can we enter creditor / debtor balance and closing stock, later?”  The answer is NO.

1.    Before doing anything take backup.  Copy on once writable CD; take the backup media to another location (different building).

2.    Task:  Enter closing stock for Inventory items.

3.    Count stock.  This exercise should be done very carefully.  This is important for ‘going-live’.

4.    Enter the closing stock, as on the cut-off date, from that date onwards, ERP will prepare the inventory related books, as well as accounts books, automatically.

5.    E.g. closing balance as on March 31, mid night is opening balance for April 01.
6.    Task: Enter ALL items in the item master.
It is strongly recommended that for EACH location stock balance be taken.  E.g. stores, rejection location, scrap location, WIP (work-in-process), third party (subcontractor location), etc.

7.    Task: Take location master printout (excel sheet showing all locations) from the ERP (not from Tally).  The list will also show names of subcontractor locations.

8.    Bought out items, raw material, consumables, spares, etc.  Items that are supplied by vendors (supplier).

9.    Sub-assemblies, semi-finished goods, factory made item, etc.  This may include items that are received from third party, if it is semi-finished goods. (WIP).

10.  Finished Goods, (FG or product that usually appears in the sales invoice).

11.  Task: Prepare the Item list using ERP software instant excel sheet option.  You can prepare category, sub-category wise, separate list.  Give to concerned person to take physical stock (count) and write on the excel sheet itself, put date and sign.  This is strongly recommended to avoid confusion of item code / description.

12.  Use this list (hard copy) to enter closing stock figures in ERP.

13.  From that moment onwards, every transaction must go through ERP.

14.  Depending on your judgment, estimate time required to do the physical count and the exercise to enter the data in ERP.  This will depend on number of persons allocated for the task.

15.  During the stock taking activity, there should be NO material movement.  All goods inward and sales issue has to be suspended.  For instance some companies would like to do this exercise on 1, 2 and 3 April and start the year on 4 April 08.  Some companies stop the manufacturing activity on 30 and 31 Match.

16.  You may find items that are physically present but not in the list – enter in the item master and enter closing balance.

17.  Account Closing Balance are required for the following:
• Debtor (customer),
• Creditor (vendor, service provider, and third party) balance pertaining to 11-12 balance will be carried forward automatically.
• Pass JV (cr. Note or debit note if necessary to get the correct balance).  Make sure the bank-reconciliation exercise is done well in time for ensuring correct ‘Trial Balance’ statement in ERP.

18.  In case you have already gone “Live”:
Count physical stock for each item and write on the excel sheet printout, next to ERP stock statement (book stock) figure.  Ideally, both should be same.  If not write the difference (plus or minus).  You will have to get explanation from stores-in-charge and pass SAN (stock adjustment note) to get the book stock same as physical stock.

19.  You may find item that are shown as stock in hand but there is no such item.  Check that there is no confusion in item name.  Any case one must reconcile the stock.
20.  You will have to do this exercise for each location.  Especially stock lying with the third party (if any).

21.  Print separate list for FG, WIP, Stores items, consumables, packing material, etc. from ERP software.

22.  You will need people so plan in advance, inform your team (staff), this is not one or two persons task.  More people are required depending on number of location, size of the inventory, and so on.

23.  At the time of login, into the ERP, select appropriate year (the first screen where you give log in name and password).

24.  New document number series will start from the New accounting Year – e.g. April 1, 2012.

25.   ERP System will allow you to enter 11-12 transactions even in April 2010, (for this select year 11-12).  Finally, when the audited Balance Sheet is available one can make a “closing JV (Journal Voucher).  This may be sometime in April / May 12.  Whereas the current year (11-12) transaction can be entered from 1^st April itself (these will be in new document series).

26.  Cut-off date is ‘as on’ date in the Closing Balance data entry screen.

27.  In item ledger and item stock statement ‘From’ date should NOT be less than Closing Balance, date that is used for entering closing balance.

28.   User must press ‘enter’ key after entering the closing balance stock.

29.  Once closing stock is entered, user should check, and if mistake is found, then enter again; this will over-write previous figure.  Once all closing balance is checked, printed and confirmed then REMOVE access to the closing Balance menu-using user manage.  No one should enter again cl. Bal. because this is one time exercise.
30. Only after disabling, the cl. Bal. menu user should be allowed to enter inventory transactions.
31. Closing balance Rate or value:
• While entering stock closing balance, user also should enter rate.  This is required to calculate the value.
• For item that are purchased from outside – pl. enter the Weighted Average Rate (WAR) rate (weighted average rate), or last purchase Rate, if WAR rate is not available.
• For all factory made items – SFG (Semi-Finished Goods or sub-assemblies) or FG (Finished Goods)– user should enter ‘cost rate’.

For additional information study The Sarbanes–Oxley Act of 2002

The bill was enacted as a reaction to a number of major corporate and accounting scandals including those affecting Enron, Tyco International, Adelphia, Peregrine Systems and WorldCom. These scandals, which cost investors billions of dollars when the share prices of affected companies collapsed, shook public confidence in the nation’s securities markets.

In India PWC and Satyam is recent examples of accounts manipulation.

Replacing ERP Software?

Are you planning to change your ERP vendor?

ERP Implementation tips

Replacing system management software is like visiting a medical clinic for injection, painful but necessary.  First, try to get upgraded version if any, from your existing ERP vendor.  Probably this means more investment, but worth considering.  Once you rule out this option, and decide to look for new ERP software, consider the following points:

1. Once again define the new requirements, this time make a function wise list.  For instance, accounts, material, sales, and so on.  It is important to do the ABC analysis, A essential list, and C is wish list.  Remember if everything is A, you will have to pay for the customization, so let go of some point as wish list.  Share the list with the new ERP vendors, and try to match.  Here the trusting the new ERP partner is important that you want the truth.
2.   Do some business process improvements.  Do not (do not, no this is not a spelling mistake, just to emphasise) automate without improving your existing methods.  Chances are you will automate the mistakes; this means ERP will do mistakes faster.  This exercise is called BPR (business process re-engineering).  All the problems with the existing system are in fact opportunities for improvement.  Ensure that you are aware of the issues, and that the new ERP software system will help resolve them.  Learn more about BPR here  http://www.dnserp.com/b__p__r_.htm.
   

   Do some BPR before ERP

3. Stay focused in defining the scope.  Module wise write down master, transactions, and reports.  Again, do ABC analysis of the same.  See sample scope given here http://www.dnserp.com/dns_scope.htm.  FAQ: Can I change the scope?  Ans: Yes, but after discussing with the ERP supplier and before starting to implement.
4. Select your task force.  Motivate them, yes allocate a budget.  Offer incentive.  Involve key people at the start.  Write important milestones.
5. Size of the ERP company is not that important, small or big, what is important is how important it is for them to make your ERP a success.
6. Arrange for a demo with your own inputs and try to match the report – at this stage without customization.  About eighty percent of your requirements should be met.  So prepare your own data to input for the demo run.
7. Brainstorm with your senior management to identify potential reasons of failure, and take steps to guard the same to reduce risk.
8. Assign one (or better two) main ERP coordinator/s, dedicated resource/s.  Consult domain expert and other consultants such as tax, ISO, 6-sigma, etc.  Ensure their valuable time is available.  Study http://www.dnserp.com/implement_erp.htm.
9. While evaluating make sure the implementer/s are also interviewed and their time is committed.
10. ERP implementer and ERP coordinator team should have project management skill.  Ask ERP vendor to show their track record of other similar size ERP success story, I mean show the document that was used to track ERP project management in the past.

Hope you will find this ERP tips useful and will share with others, by using the social icons given below.  Let us know your comments, add point that we might have missed out, your feed back will be appreciated. 

SAP ERP Modules

SAP ERP Software intro

SAP ERP Modules introduction: This short presentation introduces SAP ERP modules – FI CO HR BW QM MM PS PP SD.

Enterprise Resource Planning software is a software to manage business that links business processes automatically.

View this document on Scribd

Meet today’s challenges in finance with industry-leading financial management software in SAP ERP Financials. Complete, industry-specific, scalable and global – SAP ERP Financials enables your teams to address changing financial reporting standards, improve cash flow, and manage financial risks.

*SAP logo belongs to SAP.  This is reproduced here for education and training purpose only.

Click here to learn about other MNC ERP software packages such as Microsoft Dynamics, Oracle, etc.

I like the punch line of SAP “The best-run businesses run SAP” – what do you say?

In SAP ERP conference, Dabbawala explained supply chain management

Supply chain management without software ?

Mumbai Dabbalwala has six sigma

Learn about this amazing organization
 which got six sigma.
They deliver even in rainy season in Mumbai, India,
 without any excuse.

View this document on Scribd
Here is a short presentation of 15 slides.
Let us know if any of you have actually
 experienced this 'lunch box' service.

ERP software for hospital – Fortis

Q&A: Shivinder M Singh, MD, Fortis Healthcare (India).

Q&A: Shivinder M Singh, MD, 

Standardisation affects the cost by virtue of the fact that you don’t have to replicate the same process in a number of places. You can reduce the number of jobs at the front end. You can standardise them, it gets easier as you go along. The quality improves and errors, a major cost in healthcare, reduce. The idea is that if I have a hospital in a tier-3 or a tier-4 market, and it runs on the same system, it’s cheaper for me to run it.

We are doing this project, called Project Next, which, in a nutshell, is hospital-wide ERP. It’s costing us a bomb, roughly $5 million. But that’s across the entire network and it’ll put everything on the same platform, front and the back-end. By virtue of having scale, you can actually do more and you can do it cheaper.

“ I take the 600,000 villages in the country and link each to a network which has got an emergency response. The villager has the basic diagnostic facility to figure if he has a problem early enough. And there is a preventive structure in place where there are annual health-checks and other such mechanisms”.

I lost one hour. Seriously, whole of America did.

At 2 a.m. this morning, clocks moved forward an hour with the shift from standard time to Daylight Savings Time (DST).   This is logical change and not adaptive change. This is logical because everyone is changing their timetable.  For instance, getting up one hour early due to ‘Daylight savings Time’ is logical.  No huge adjustment of life priorities is triggered.  Our body clock can change without much difficulty.  But if you decide to get up one hour early to do meditation or go for swimming is difficult, because it is adaptive change.  In both examples same thing ‘get up one hour early’ is involved.

Using new technology such as Blog is adaptive change.  No matter how hard you try some people are not comfortable using facebook or LinkedIn.  You must have seen the clip that shows expert secretary changing from typewriter to a PC, and throwing monitor, because she is used to do the carriage return.  Or changing from manual system to automatic ERP system is a painful transformation.  Changing from legacy way of marketing and using the digital platforms is not an easy because it requires adaptive change.

Daily we make logical changes.  We use our training to solve routine problems, such as dealing with customer’s negative feedback, or altering action plan when sales target is not achieved.  We do customer survey and make a road map to address the issues.   But note that these examples are pertaining to external changes.

On the other hand adaptive changes are transformative, which compels us to change from inside, in the mind.  We want to reign in our temper because it is affecting our relationships with customers and colleagues, but not matter how hard we try we cannot ‘control’ it.  Our frustration spills over, and now we have to fix the damage.

Anupreksha or the cognitive behavioral therapy is a psychotherapeutic approach, which aims to solve problems concerning dysfunctional emotions, behaviors and cognitions through a goal-oriented, systematic meditation procedure.  There is empirical evidence that this is effective for the treatment of a variety of problems, including mood, anxiety, personality, eating, substance abuse, and psychotic disorders.   We can treat ourselves by a meditation technique; there are treatments for specific psychological disorders.

Only by fixing our inner feelings of frustration can we make an adaptive change.  We could decide to use cognitive behavioral therapy or Anupreksha, or some other method for the internal change.  To make such changes you need to recognize when you are facing an adaptive change, that requires subconscious level of thought and effort.

The real leadership, the kind that surfaces conflict, challenges long-held beliefs, and demands new ways of doing things-causes pain.  When people feel threatened, they take aim at the person pushing for change. As a result, leaders often get hurt both personally and professionally.

(Reference: Leadership on the Line, renowned leadership authorities Ronald A. Heifetz and Marty Linsky, Wikipedia, and Preksha meditation system).

E-marketing, Social media, and ERP Training

Part time and full-time batch.  Empower your career.  E-mail today for more information.

Practical ERP / e-Business / e-Commerce  training

Global village

Our track record in training stretches back to 1980…. Click [http://www.dnserp.com/track_record.htm] to view 34 years record of accomplishment.  We have successfully deployed ERP Software in several companies.

During the training, there will be seminars and actual demonstration of ERP software in real world environment and activities centered on the theme of ‘hands on’ applicability of the ERP & e-Commerce knowledge imparted.

Would you like to join?  What do you say?

ERP / E-Business Seminar

ERP / E-COMMERCE & E-BUSINESS

We are happy to announce introductory seminar on ERP and E-Business.  Date:  Friday, 6 August, 2010. Limited seats.  For free invitation pass register today.  email chopra@dnserp.com or erpacademy@dnserp.com.  For venue and other information: Contact Prof. Chopra sir on +91 98900 38725.  Reserve you seat by registering today.

Complete ERP / e-Business training will start as follows:

Part-time course for working professionals.   Of course our full-time training continues as usual.

COURSE DETAILS:

The ERP training will be conducted in Pune, India.  Includes theory and practical sessions.  Also visit to industries where ERP has been installed, for hands-on experience.  Successful participants will be issued a certificate.  Training sessions will be taken by ERP experts.  We will be discussing about the latest technology of cloud computing and dot net version of ERP. We will also cover the e-Business & e-Commerce aspect of doing business.  Where user can use a browser to access ERP menus from any computer.

FULL TIME: The duration will be 300 Hrs.  (3 months) 10:00 a.m. – 5:00 pm. Monday – Friday.  Fee Rs 30,000 (all-inclusive).

PART TIME: For working professional.  Duration 100 Hrs.  Approx. 2.5 months.  Mon, Wed, Fri.  6.00 p.m. – 8.30 p.m.  Plus on Thursday 9:00 a.m. – 12:00 pm. Fee Rs 10,000 (All inclusive).

If you know all about ERP, or your organization is already using ERP, probably you know that there is a shortage of ERP trained people.  You are requested to share this information to others who you think will be benefited.

Track-record:  We Build ERP Careers @ DNS

In the past many young participants have joined us to learn ERP.  ERP Academy is for proper ERP training, for the right participant.  First-rate faculties, with vast industry expertise.  Intensive ERP training is given to toughen up participants.

View on our website  http://www.dnserp.com/erp_academy.htm to view testimony from past participants who received hands-on ERP training.