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© 2002 Six Sigma Academy and Helix Systems3 Interface File: Process Overview Identify Source Accounting System and scope of coverage Evaluate Source A/R System Operating Environment, Business Rules and Data, Size infrastructure Requirements Business develops Source System extract file and applies appropriate extract processing logic and data modification requirements Identify and allocate appropriate resources Validate data and tied-out to source A/R Control totals and data integrity checks performed Data Integrity? no yes Validated ? no yes Determine the Root Causes of Errors Elevate to Production End Start Correct Programming Errors Send extract to Metreq
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1© 2002 Six Sigma Academy and Helix Systems
Interface OverviewVersion 1.0
2© 2002 Six Sigma Academy and Helix Systems
Interface File: Orientation
Nightly Incremental Data Feeds from Source A/R Systems. Changed/modified data only is extracted, transaction parenting occurs, Residual or Partial payment methodology treatment applied, and cash movement activity. Data validation and integrity checked against trailer file(s).
Business UnitX
Business UnitX
Business UnitY
Business UnitZ
METREQMETREQ
SourceSourceA/RA/R
SystemsSystems OracleOracle SAPSAP JDEJDE Other…Other…
3© 2002 Six Sigma Academy and Helix Systems
Interface File: Process Overview
Identify Source Accounting System
and scope of coverage
Evaluate Source A/R System Operating
Environment, Business Rules and Data, Size
infrastructure Requirements
Business develops Source System extract
file and applies appropriate extract
processing logic and data modification
requirements
Identify and allocate
appropriate resources
Validate data and tied-out to source
A/R
Control totals and data integrity
checks performed
DataIntegrity?
no
yesValidated?
no
yes
Determine the Root Causes of
Errors
Elevate to Production
End
Start
CorrectProgramming
Errors
Send extract to Metreq
4© 2002 Six Sigma Academy and Helix Systems
Interface File(s) Data Contents
The METREQ data feeds are transactional based – meaning that only the activity to Customer and/or Transaction records is sent to METREQ in the interface data feed. Further, METREQ DOES NOT send data ‘upstream’ to the source A/R system (System of Record). The interface files are produced and sent to METREQ on a schedule determined by the organization – typically each evening.
Because METREQ is transactional based, the system maintains Source System Double-Entry accounting. All debits and credits are monitored, tracked, and applied appropriately.
METREQ maintains all open AND closed transaction items – to include all transaction data (all Debit and Credit activity), line item details, and comment activity. Items reflect the true and accurate status within the Source A/R system – For Example: an item will remain open in METREQ until closed in the source A/R system… the ‘closing’ activity is subsequently captured, send to METREQ, and the item is closed within METREQ.
Further, because METREQ maintains all closed items, it is able to re-open a transaction should it become re-opened within the source A/R system – e.g. a credit is applied.
The retaining of closed items also enables trending and long term process capability analysis and performance measurements, cash forecasting, and goal deployment activities.
5© 2002 Six Sigma Academy and Helix Systems
Interface Files
METREQ incorporates the use of multiple data files to extract, process, format, and deliver the receivables data from the Source A/R system. Customer Master Transaction Master Transaction Line Item Bill-To Master Ship-To Master Synchronization
These files are used in both pre-production initialization as well as steady-state. During initialization of the system these files will deliver current-state account and transaction detail to METREQ. Post-Initialization, a.k.a. “Steady-State”, the data contained in the interface files will be incremental in nature – or Activity Based, covering a time range specified by the organization.
In addition, in conjunction with system initialization, METREQ may receive a Historic Data Load from the source A/R system. The historic load contains the following files and accompanying data Customer Comments Customer Contacts Invoice Comments Dispute Detail
6© 2002 Six Sigma Academy and Helix Systems
Organization and Data Relationships
Business Organization RelationshipsCustomer Organization RelationshipsTransaction Organization Relationships
METREQ utilizes and relies on relationships in three key areas forfunctionality of the application:
These relationships determine the treatment and workflow processesapplied to the receivables.
7© 2002 Six Sigma Academy and Helix Systems
Business Organization Relationships
Defines the organizations reporting, strategic, and operational relationships as related to business organization and accountability100% Definable and Configurable by the business
Example:
StrategicBusiness
Unit(SBU) “A”
StrategicBusiness
Entity (SBE)A1
StrategicBusiness
Entity (SBE)A2
StrategicBusiness
Entity (SBE)A3
Lineof Business
A1A
Lineof Business
A1B
Profit Center A1A1
Profit Center A1A2
Profit Center A1A3
METREQ refers to theseBusiness Organization Relationships
as the“Organizational Hierarchy”
8© 2002 Six Sigma Academy and Helix Systems
Customer Organization Relationships
Defines your customers organization structureAllows a Single-Voice treatment to the customer across multiple lines of businessDifferent relationship definitions may exist between collection activities and reporting/risk management activitiesFacilitates and enables consolidated customer risk management and reporting activities100% Definable and Configurable by the business – ability to segment, or “break” relationships for alternate treatment at any level – Across A/R platforms
Example:ACME
Customer1
ACMEJDEdwards
1A
ACMEOracle
1B
ACMESAP1C
ACMEWidget Div.
1A1
ACMEChassis Div.
1A2
ACMEChassis Div.
1A3
METREQStrategic CustomerACME 1
METREQStrategic
CustomerACME 1C
METREQ provides the flexibilityto define and treat the customer
as the situation requires.
METREQ refers to theseCustomer Organization Relationships
as “Parenting”,or “Strategic Customers”
9© 2002 Six Sigma Academy and Helix Systems
Transaction Organization Relationships
Double-Entry accounting activity is maintained and capturedItem activity must carry and identify the original (or Parent) invoice number/identifierItem activity, e.g. offsets, are identified to the original item by carrying the Parent Identifier
ACMECustomer
1
InvoiceI-87AS21
PaymentP-345837
Credit MemoCM-03298
Credit OffsetP-345837
Credit OffsetCM-03298
Associated Item activities are managedand grouped with the original
item/transaction – full history ismaintained for all items.
Debit Offset Debit Offset
METREQ refers to theseTransaction Organization Relationships
as “Transaction Parenting”
10© 2002 Six Sigma Academy and Helix Systems
Record Type Transaction Type Item Number Amount Status Parent Invoice
Original Invoice I398S459 8,000.00 Open I398S459Offset-O1 Payment P49083 (6,500.00) Open I398S459Offset-O2 Write-Off WO4689 (1,250.00) Open I398S459Offset-O3 Credit Memo CM92093 (250.00) Closed I398S459
Transaction Organization Relationships
Transaction Parenting Example:
The Original Item Number MUST BE carried in the Parent Invoice FieldImportant: Item Number must be carried in the Parent Invoice Field for the Original Transaction
11© 2002 Six Sigma Academy and Helix Systems
Transaction Organization Relationships
There are two Cash Application Methodologies: Residual Payment Methodology:
– A new and unique Debit Item is created for each credit item that doesn’t fully offset the debit (e.g. Short-Payment)
– A new and unique Credit Item is created for Over-Payments against an item Partial Payment Methodology
– The original invoice remains open until fully offset by either Debits or Credits
Requirements for/in METREQ If a Short-Payment is encountered, only the payment information is sent to METREQ
– Remember: Must include the Parent Invoice Number in the Parent Invoice Field !!! Residual Items should NOT be sent to METREQ If offsetting transactions aren’t created in the Source A/R system they MUST be
created as part of/in the Interface Program
The Cash Application Methodology and Configuration in the Source A/RSystems MUST be reviewed and addressed…
12© 2002 Six Sigma Academy and Helix Systems
Transaction Organization Relationships
Transaction Parenting and Cash Application Illustration #1Typical “Straight Forward” Scenario…
This example represents Source A/R System activity. If off-settingtransactions are not captured in/by the Source A/R system, the
interface process/program must generate them and send them to Metreq.
-Note that in the above example, there are four activities sent to Metreq
Cash Application Example: Typical Scenario
Date Activity Type Transaction Type Item Number Amount Status Parent
InvoiceARMS Activity
1/1/2002 Original Invoice I398S459 8,000.00 Open I398S459 X2/1/2002 Original Payment CK6785 (8,000.00) Open CK6875 X2/2/2002 Credit Offset Payment CK6785-I398S459 (8,000.00) Closed I398S459 X2/2/2002 Debit Offset Payment CK6785*I398S459 8,000.00 Closed CK6785 X
13© 2002 Six Sigma Academy and Helix Systems
Transaction Organization Relationships
Transaction Parenting and Cash Application Illustration #2Typical “Straight Forward Multiple Payment” Scenario…
This example represents Source A/R System activity. If off-settingtransactions are not captured in/by the Source A/R system, the
interface process/program must generate them and send them to Metreq.
-Note that in the above example, there are seven activities sent to Metreq
Cash Application Example: Single Invoice, Multiple Payment Example
Date Activity Type Transaction Type Item Number Amount Status Parent
InvoiceARMS Activity
1/1/2002 Original Invoice I398S459 8,000.00 Open I398S459 X2/1/2002 Original Payment CK6785 (4,000.00) Open CK6875 X2/1/2002 Credit Offset Payment CK6785-I398S459 (4,000.00) Open I398S459 X2/1/2002 Debit Offset Payment CK6785*I398S459 4,000.00 Closed CK6785 X
2/15/2002 Original Payment CK6786 (4,000.00) Open I398S459 X2/15/2002 Credit Offset Payment CK6786-I398S459 (4,000.00) Closed I398S459 X2/15/2002 Debit Offset Payment CK6786*I398S459 4,000.00 Closed CK6786 X
14© 2002 Six Sigma Academy and Helix Systems
Transaction Organization Relationships
Transaction Parenting and Cash Application Illustration #3Typical “Multiple Invoice, Single Payment” Scenario…
This example represents Source A/R System activity. If off-settingtransactions are not captured in/by the Source A/R system, the
interface process/program must generate them and send them to Metreq.
-Note that in the above example, there are seven activities sent to Metreq
Cash Application Example: Multiple Invoice, Single Payment Example
Date Activity Type Transaction Type Item Number Amount Status Parent
InvoiceARMS Activity
1/1/2002 Original Invoice I398S459 8,000.00 Open I398S459 X1/1/2002 Original Invoice I398S499 6,000.00 Open I398S459 X2/1/2002 Original Payment CK6785 (14,000.00) Open CK6875 X2/1/2002 Credit Offset Payment CK6785-I398S459 (8,000.00) Closed I398S459 X2/1/2002 Credit Offset Payment CK6785-I398S499 (6,000.00) Closed I398S459 X2/1/2002 Debit Offset Payment CK6785*I398S459 8,000.00 Open CK6785 X2/1/2002 Debit Offset Payment CK6786*I398S499 6,000.00 Closed CK6786 X
15© 2002 Six Sigma Academy and Helix Systems
Transaction Organization Relationships
Transaction Parenting and Cash Application Illustration #4Typical “Straight Forward Multiple Payment” Scenario…
This example represents Source A/R System activity. If off-settingtransactions are not captured in/by the Source A/R system, the
interface process/program must generate them and send them to Metreq.
-Note that in the above example, there are four activities sent to Metreqand that the Original Invoice item remains open
Cash Application Example: Short Payment Treatment
Date Activity Type Transaction Type Item Number Amount Status Parent
InvoiceARMS Activity
1/1/2002 Original Invoice I398S459 8,000.00 Open I398S459 X2/1/2002 Original Payment CK6785 (7,000.00) Open CK6875 X2/1/2002 Credit Offset Payment CK6785-I398S459 (7,000.00) Open I398S459 X2/1/1900 Debit Offset Payment CK6785*I398S459 7,000.00 Closed CK6785 X
16© 2002 Six Sigma Academy and Helix Systems
Interface Considerations
System Configuration Business Organizational Relationships, or “Organizational Parenting”,
configuration Which transactions to/are associated with the various business levels Identify and define Resolvers by business level/entity – who owns the
responsibility for the various transaction/dispute types within each business level
Escalation paths– Across business levels– Across A/R systems
Source System Cash Application Treatment Residual Payment Methodology Partial Payment Methodology Automatic Write-off configurations
– Write-off activity must be captured and fed to Metreq The treatment of cash movement between customer accounts
17© 2002 Six Sigma Academy and Helix Systems
Interface File Development
Data MappingFunctional DesignDesign Review Review source system configuration and data treatment Validate approach and logic
Development Reviews Demonstrate ability to provide Transactional Organizational Relationship,
“Transaction Parenting”, under all scenarios Review Code and Logic Review Data Validation
– Trailer Records– Synchronization Files– User “Eyeball” validation
Elevate to Production
18© 2002 Six Sigma Academy and Helix Systems
Production Elevation Criteria
Interface file development is complete when: Source A/R System Ties out and balances with Metreq at the following
levels…– System– Customer– Business– Transaction
There are no rejected records
19© 2002 Six Sigma Academy and Helix Systems
Interface Development Process Flow
InterfaceRequirement
DocumentProvided to
Business UnitFinancial App.
Support
Start
Business UnitDevelops Extract
Files
Develop CustomerMaster File
Develop Bill-to/Ship-to File
DevelopTransactionMaster File
DevelopTransaction Detail
File
DevelopSynchronization
File
Test Data FeedFile(s)
Pass ValidityTest(s)?
Perform Cause &Effect / FMEA
Analysis
Plan CorrectiveAction
No
ImplementCorrections
User Data Tie-out
Yes
Source A/R SystemData Feeds
Tied Out?
No
Yes
Obtain CustomerSignoff & ApprovalEnd Elevate to
Production
Are thereReject
Records?
No
Yes
20© 2002 Six Sigma Academy and Helix Systems
Interface Development Process Flow
Source System
RejectedRecords
(SequenceOrder)
ControlTotals
DiscrepancyCheck for Data
Accuracy
DoDiscrepancies
Exist?
End
No
ReconciliationReport is CreatedYes
ReconciliationReport
ReconciliationReport Sent via E-
Mail to SourceSystem
Administrator
Review andCorrect
ReconciliationErrors
Data Reconciliation
21© 2002 Six Sigma Academy and Helix Systems
Interface Development Process Flow
ARMS
RejectedRecords
Create CustomerTotals File
Data Tables
CustomerTotals
Source A/RSystem
Customer TotalFile is Created
Source A/RCustomerTotals File
FTP Source A/RCustomer Totals
File to ARMS
Customer TotalDiscrepancy
Check
DiscrepancyExist?
End
No
CreateDiscrepancy
Report
DiscrepancyReport
DiscrepancyReport Sent via E-
Mail to SourceSystem
Administrator
A
A
Address andCorrect
Discrepancies
Data Synchronization
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