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BEST PRACTICES


Table of Contents

About Belean.net

5

Human Resources Process

7

Purchase Process

25

Product Creation Supplier Creation Defining Purchase Needs Purchase Order Automated Purchase Order Goofs Receiving Process Inventory

Finance Reporting Process Daily & Monthly Procedures

TABLE OF CONTENTS

Recruitment Legal Obligations Integration Approval Training Time Tracking Leave Management Expenses

49

Account Reconciliations & Payments Planning Reporting Compliance & Control

3


How Belean.net can help you

Master your Growth Belean.net is a shared service in finance and administration dedicated to growth companies through a Build-Measure-Learn process.

P R O C E SSE S

ABOUT BELEAN.NET

S T R AT E G Y

R E PO R T ING

ERP IMPLEMENTATION (ODOO , …) PROCESS B EST PRACTICES

S T R AT E G I C M A N A G E M E N T E NT E R PR ISE M ANAGE M E NT H UMA N

F INA NCE

R ESO URCES

IT

O P E R AT I O N A L M A N A G E M E N T P URCH ASE

W AR EH OU SE

M AN U FAC TU RING

I N VEN TOR Y

S ALE

R E SE AR C H & D E VE L O PM E NT S CO P E & B US INESS C A S E / P L A N

D E V E L O PM E NT

T E S TING, V A L I DA T IO N & P R O D U C T L A U N CH

5


HUMAN RESOURCES PROCESS

7


Recruitment

Legal Obligations

Integration

DPMT MANAGER

Appraisal

Training

HR DPMT

Leave Management

Time Tracking

Expenses

CANDIDATE(S)

Workforce need

1

Requisition

No

No

Approved

2

Yes

Job description & specification

Approved

3

Yes Launch recruitment

Job application

Assess

4

Applicant pool 5

Talent pool

HR interview

Yes

Dpmt manager interview

No

Selection

Yes

6

No 7

Selection

Contract proposition

Approved

No

8

Yes

Recruitment done

8

9


Recruitment refers to the overall process of attracting, selecting and appointing suitable candidates for jobs (either permanent or temporary) within an organization.

The department manager perceives a lack of manpower in his department to satisfy the needs of the company.

The department manager asks the HR department the commitment of a new employee for a specific position in his department. The HR department accepts the request if it is justified.

The HR department prepares the job description with the job specification for the vacant position. The department manager approves the job description & specification document or asks for modifications.

After validation of the recruitment documents, the HR department launches the recruitment for the vacant position. People send their applications.

HR PROCESS

When the recruitment period is complete, the HR department conducts an initial screening on the basis of CVs and profiles. The applicant pool is reduced to a talent pool.

The HR department conducts an initial interview with talent pool candidates.

The HR department selects the talents that correspond to the position, after an assessment of their competences and an individual interview. The department manager conducts a second interview to meet the candidates selected (and eventually give them a case study to achieve).

The department manager selects the candidate(s) he wishes to hire. The HR department prepares a contract proposal for the candidate(s). The candidate(s) decide(s) whether to accept the job or not.

The recruitment process ends with the employment of a new employee. The next process is the “(New) employee integration� through legal obligations.

9


Recruitment

Legal Obligations

Integration

Appraisal

HR DPMT

Training

Time Tracking

Leave Management

Expenses

THIRD PARTY

Authority/ Insurance/ Social Partner

Employment

1

Process all legal obligations

WiDe & Dimona

Process WiDe & Dimona

2

Process insurance request

3

Registration confirmed, data recieved

Take out insurance

Insurance confirmed

Family Allowance Fund affiliation

Process affiliation

4

Affiliation confirmed

EPPS affiliation

Affiliation confirmed

10

Process affiliation

5


Following the recruitment of a new employee, the HR department has to proceed to various mandatory procedures.

There is a large range of legal obligations to fulfill when you want to hire staff in Belgium.

Registration as an employer and registration of staff. When you hire staff, you must register as an employer (WiDe) and then register the worker(s) (Dimona). The WiDe must be done before the first worker starts working. A Dimona must be done for every worker who enters service or leaves his employment with an employer.

HR PROCESS

An employer is required to take out workers’ compensation insurance before the worker starts working. If the employer neglects to take out insurance, he is automatically affiliated to the Workers’ Compensation Fund.

Each employer is required to join a family allowance fund, even when it does not employ any worker entitled to family allowances. In some sectors, there are specific family allowance funds to which the employers concerned are automatically affiliated. If there is no special family allowance fund, you have 90 days to join a family allowance fund of your choice. If you do not, you will automatically be affiliated with the National Office of Social Security for salaried workers (ONAFTS).

Every employer is obliged to join an External Prevention and Protection Service at work. The task of this service is to carry out the medical control of your workers and to give advice to the employers concerning hygiene, health and safety at the workplace(s). If applicable, this service also subjects your worker(s) to a medical examination.

11


Recruitment

Legal Obligations

Integration

EMPLOYEE

Appraisal

Training

MANAGER

Time Tracking

Leave Management

Expenses

HR DPMT

Legal obligations

Written contract proposition

Contract Management 1

Approved

Yes

Sign Contract

Working Regulations

Accept & Sign Working Regulations

Sign Contrat

Written Contract signed

Send Working Regulations

Working Regulations signed

Legal employment

12

2

3


The HR department proceeds to the integration of the new employee to his working environnement. This includes the contacts with the manager and the contract signing.

A contract of employment is an agreement under which the worker undertakes to provide work for the employer in return for remuneration and advantages. Note that when a written contract of employment has not been concluded, the contract concluded orally is equivalent to a full-time contract of indefinite duration with no trial period. Contract Management includes: Remuneration / Working hours / Fringe benefits (fleet, meal vouchers, phone, etc) / Working place /...

HR PROCESS

The working regulations are the internal rules of the company. It includes the working and pay conditions that apply in your business. In addition to the mandatory information, it may contain all relevant information concerning the rights and obligations of both parties. In fact, it is an addition to the individual contract of employment. This obligation applies to all employers, regardless of the number of workers they employ. Each worker must receive a copy of the work regulations.

The integration process ends with the legal employment of the new employee.

13


Recruitment

Legal Obligations

Integration

EMPLOYEE

Appraisal

Training

Time Tracking

Leave Management

Expenses

MANAGER Appraisal process

Job analysis

1

Performance standards

Establish standards of performance

2

Auto evaluation

Review results

3

Measure actual performance

4

Compare with standards

5

Feedback discussion

6

Set corrective or new action

7

Recieve action plan

Appraisal done

14


The performance appraisal process is the time of the year when the employees are evaluated on their performance during the last six months or one year depending upon the time frame that is set.

The manager analyses the job position.

The manager establishs standards of performance and sends it to the employee.

HR PROCESS

The employees takes the predefined auto evaluation form. The manager reviews the form.

The manager measures the actual performance of the employee.

The manager compares the results with the standards of performance established for the job position.

The manager organizes a feedback discussion with the employee.

After discussion, the manager prepare a corrective/new appraisal plan and sends it to the employee.

15


Recruitment

Legal Obligations

Integration

EMPLOYEE

Appraisal

Training

Time Tracking

16

Employee readiness for training

1

2

Learning env ironment

3

Ev aluation plan

4

Training

Monitoring

Ev aluation

Results

Get results & feedback

Expenses

MANAGER Determine needs

Basic skills, attitude, motiv ation

Leave Management

5

6

Feedback about the system

7

Changes & Improv ements

8


Training is the systematic development of the attitude, knowledge, skill pattern required by a person to perform a given task or job adequately.

The manager determines the training needs of the employee during the appraisal.

The manager needs to ensure the employee readiness for training.

The manager creates a learning environment: learning objectives, meaningful material, practice, feedback, community, modeling, program administration.

The manager monitores the training system.

HR PROCESS

The manager develops an evaluation plan.

The employee takes the evaluation.

The employee gives a feedback about the training system, plan.

The employee gets his results and a feedback from the manager. The manager makes changes to improve the training program.

17


Recruitment

Legal Obligations

Integration

Appraisal

EMPLOYEE

Training

MANAGER

Time Tracking

Leave Management

Expenses

HR DPMT

New cycle

1

Encode hours

Send data

Correct the hours

No

Receive timesheet

2

Review the hours

3

Approved

Yes

Time tracking done

18

Reception of the timesheets

4


Simultaneaously to the completion of his tasks, the employee is asked to fill its worked hours and schedule. This timesheet completion helps HR officers to proceed to the payroll operations.

The employee fills in his timesheets every day/ week.

The employee sends the timesheet to the manager.

HR PROCESS

The manager reviews the timesheet and approves it or asks the employee to correct it.

When the timesheet is approved by the manger.

19


Recruitment

Legal Obligations

Integration

DPMT MANAGER

Appraisal

Training

HR DPMT

Time Tracking

Leave Management

Expenses

EMPLOYEE Leave Management

Recieve leave request.

No Approved

Create leave request.

Yes

1

2

Notification

Check if ok?

3

No

Modify/Correct

4

Yes

Encode in payroll

20

Leave accepted

5


Upon request of the employee, the department manager and the HR department proceed to the evaluation of leave requests.

Create a leave request in the system. Select the leave type wanted and available (vacation, sickness, business travel. Explain the reason if necessary. Submit the leave resquest to the Manager.

The manager checks the leave request. He approves it or not. If the leave request is approved => the employee recieves a notification: “your leave request has been approved�. If the leave request is refused => the manager notifys the reason to the employee, the employee can create a new leave request.

The HR department checks if the type of leave is available for the employee. If not, the employee needs to modify/correct the leave request.

HR PROCESS

The HR department recieves a notification about the leave.

The HR department encodes the leave in the payroll system. The employee receives a notification: your leave is accepted for the period.

21


Recruitment

Legal Obligations

Integration

DPMT MANAGER

Appraisal

Training

HR DPMT

Time Tracking

Leave Management

Expenses

EMPLOYEE New expense

Recieve expense for validation.

No

Approved

Payment notification

22

Create the expense

Yes

Recieve the expense validated for payment

Payment of the expense

Notification

Payment notification

1

2

3


When applicable, employees can enter expense notes that are later assesed by the department manager and paid by the HR department.

Create an expense in the system. Attach the relevant voucher to the expense. Explain the reason for the expense report and send it to your manager for validation.

The manager checks the expense note. He approves it or not. If the expense is approved => the expense is sent to the HR department for payment. The employee recieve a notification: “your expense has been approved, and will be paid soon�. If the expense is refused => the manager notifies the reason to the employee.

HR PROCESS

Once the payment done. The HR department notifies the Manager and the Employee that the expense is paid.

23


PURCHASE PROCESS

25


Product Creation

Supplier Creation

Defining Purchase Needs

MANAGER

Purchase Order

Automated Purchase Order

EMPLOYEE

New Product needed

Inventory

OTHER DPMT New Product needed

1

No

Terminated

Goods Receiving Process

Approved

2

Yes

Requisition

Create product form

Type

Service

Consumable

3

Define Product procurement

4

Define Product inventory

5

Define Product Sales

6

Define Product Accounting

7

Define product identification

8

Define Supplier

9

Product created

26

Stockable


As first step towards the purchase process, employees under the supervision of managers create appropriate products. They pay attention to enter complete information to make the whole process more efficient. The product creation process starts from the purchase employee or any other department that has the specific need. The employee asks the Manager the autorisation to create a new product related or not to his department. The Manager accepts the request if it is justified.

The employee creates the product form and defines the product type depending on whether it is a Service, consumable or stockable product. Make sure to define your product efficiently because this will have a lot of consequences on the following steps.

The product inventory step is very important in order to never lack out of products. It is therefore important to keep track of stock and expected variation levels.

PURCHASE PROCESS

The employee selects the different procurement methods that are defined according to the specific product. You will also have to determine the supply chain information regarding the purchase UOM, the cost price and the list of suppliers that sell / produce the product.

The product sales step gives you the possibility insert the product specific sales conditions, this being the sales warranty, customer and manufacturing lead time.

The employee selects product accounting in order to organise the products in different categories. Define the accounting income and expense account as well as the specific taxe amount to be taken into consideration. Product traceability provides the ability to track a product through the manufacturing process and to the end user. In a perfect system, a product in the hands of a customer can be traced backward through the delivery, shipment, manufacturing, and raw material purchasing process in such a way that the suppliers of the original raw materials can be identified. Product traceability labels are used to improve quality and identify the source of a problem should there be a recall or other issue.

Define the specific supplier for the product.

27


Product Creation

Supplier Creation

Defining Purchase Needs

Automated Purchase Order

Purchase Order

Goods Receiving Process

Inventory

PURCHASE DEPARTMENT Start

Optional Supplier audit

Search supplier

2

Select Supplier

Price Negotiation

Terms & condiitions

3

4

Contract

5

Process Interface

6

Supplier created

28

1


Selecting the right supplier may seem like an onerous process for your company and supply chain. Indeed having a more simplistic supplier selection process may be helpful for some smaller companies. A more involved process of selecting the right suppliers can help many companies to meet or exceed regulatory standards, drive customer demand and build a strong brand reputation of quality products.

Identify potential suppliers. Choosing the right supplier involves much more than scanning a serie of price lists. Your choice will depend on a wide range of factors such as value for money, quality, reliability and service. How you weigh up the importance of these different factors will be based on your business’ priorities and strategy.

Select your Supplier according to your specific needs.

A Terms and Conditions agreement is also known as a Terms of Service or a Terms of Use agreement: it is a set of regulations which users must agree to follow in order to deliver a service. It is important to have one because it acts as a legally binding contract between you and your supplier.

PURCHASE PROCESS

Negotiating the right deal with your suppliers doesn’t necessarily mean getting what you want at the cheapest possible price. You may want to negotiate other factors such as delivery times, payment terms or the quality of the goods.

Once you have decided to do business with a supplier, it is a good idea to document the terms of trade in a written contract. Written agreements with suppliers minimise disagreements about each party’s rights and responsibilities.

The purchase department is now autorized to buy products from this specific supplier. This process can then be automized through a Software for more efficiency (cf. Purchase process)

29


Product Creation

Supplier Creation

Defining Purchase Needs

Purchase Order

Automated Purchase Order

Goods Receiving Process

Inventory

PURCHASE DEPARTMENT Supplier Created

Process Interface

Create Supplier

2

Define Supplier

3

Define Supplier

4

Define Supplier Accounting

Supplier created

30

1

5


For more efficiency, the supplier creation process can be automized through a Software.

The purchase department is now autorized to buy products from this specific supplier. This process can then be automized through a Software for more efficiency (cf. Purchase process)

Employee creates the supplier form with all practical information

The supplier inventory step is very important in order to never lack out of products. It is therefore important to keep track of stock and expected variation levels.

PURCHASE PROCESS

The employee selects the different procurement methods that are defined according to the specific product & supplier. You will also have to determine the supply chain information regarding the purchase UOM, the cost price and the list of suppliers that sell / produce the product.

The employee selects supplier accounting in order to organise your products in different categories. Defines the accounting income and expense account and also the specific taxe amount to be taken into consideration.

31


Product Creation

SOFTWARE

Supplier Creation

Defining Purchase Needs

Purchase Order

PURCHASE DPMT

Automated Purchase Order

Goods Receiving Process

Inventory

QA Start

1

Search supplier

cf. audit checklist

Supplier Audit

2

No

Yes Price Negotiation

Process Interface

Yes

3

Terms & Condiitions

4

Contract

5

is needed ?

Create Supplier form

Define Supplier procurement

Approved supplier

6

7

No

8

Define Supplier inventory

9

Define Supplier Accounting

10

Supplier created

32


For more reliability, the supplier creation process can include a quality control.

Identify potential suppliers. Choosing the right supplier involves much more than scanning a serie of price lists. Your choice will depend on a wide range of factors such as value for money, quality, reliability and service. How you weigh up the importance of these different factors will be based on your business’ priorities and strategy. Make a thorough audit of all the suppliers product creation/ packaging / delivery process. A formal purchasing process that records a predefined set of processes allows the path of events to be examined retrospectively to identify errors or deliberate breaches of policy. Does the facility and its many departments (organizational units) operate in a state of control as defined by the GMP regulations?

Negotiating the right deal with your suppliers doesn’t necessarily mean getting what you want at the cheapest possible price. You may want to negotiate other factors such as delivery times, payment terms or the quality of the goods.

Once you have decided to do business with a supplier, it is a good idea to document the terms of trade in a written contract. Written agreements with suppliers minimise disagreements about each party’s rights and responsibilities.

PURCHASE PROCESS

A Terms and Conditions agreement is also known as a Terms of Service or a Terms of Use agreement: it is a set of regulations which users must agree to follow in order to deliver a service. It is important to have one because it acts as a legally binding contract between you and your supplier.

This process can then be automized through a Software for more efficiency (cf. Purchase process)

Employee creates the supplier form with all practical information

The employee selects the different procurement methods that are defined according to the specific product & supplier. You will also have to determine the supply chain information regarding the purchase UOM, the cost price and the list of suppliers that sell / produce the product.

The supplier inventory step is very important in order to never lack out of products. It is therefore important to keep track of stock and expected variation levels. The employee selects supplier accounting in order to organise your products in different categories. Defines the accounting income and expense account and also the specific taxe amount to be taken into consideration.

33


Product Creation

Supplier Creation

Defining Purchase Needs

Purchase Order

Automated Purchase Order

Goods Receiving Process

Inventory

PURCHASE DEPARTMENT Purchase Need

Define Business Needs

1

Develop Procurement Strategy

2

Supplier Selection and Evaluation

cf. Supplier Audit

Purchase order request

4

Purchase Order

34

3


Defining your business purchasing needs is a fundamental business requirement.

You need to understand what the fundamental business requirements are. At this point, it is important to understand the difference between a requirement and a solution. For example, the business requirement is to have a software to help to get information published on the company intranet. A software to publish information on the company intranet is a solution – not a requirement. The requirement is to be able to publish information on the intranet. It may be that an outsourced solution is a better option.

Depending on the scale of your project, there could be a very wide range of potential solutions and approaches to your business need and a number of ways of researching the market and selecting a supplier.

Once you have selected and evaluated a group of Suppliers send a request for quotation to these suppliers in order to see which supplier has the best price or the good that best suites your company’s needs.

PURCHASE PROCESS

After researching the market and establishing your procurement approach, you need to evaluate the solutions available. This may involve a formal tender process or an on-line auction. Your criterias for comparing different solutions and suppliers are critical. Weight the key criterias heavily and don’t attach too much importance to aspects that will have little impact on the solution. A good solution is to make a thorough audit of the Supplier before buying any goods.

35


Product Creation

Supplier Creation

PURCHASE MANAGER

Defining Purchase Needs

PURCHASE DPMT

Purchase Order

Automated Purchase Order

SUPPLIER

Goods Receiving Process

Inventory

WAREHOUSE

Purchase Order

1

Purchase order request

2

Create RFQ

No 3

Receive RFQ

Decide

Quotation received

4

Yes Approve PO

Send PO & supplier contract

Receive PO cf. GMP goods receiving

Recieve Goods

6

Process Interface

7

Scheduler

8

Purchase Order

36

5


A purchase order is a legally binding document between a supplier and a buyer. It details the items the buyer agrees to purchase at a certain price point. It also outlines the delivery date and terms of payment for the buyer. Purchase order computer systems have made the purchasing process more efficient and allow for better inventory and payment tracking.

Send a request for quotation to the suppliers in order to see which supplier has the best price or the good that best suites your company’s needs.

Generate the RFQ and send it to all your selected Suppliers.

The suppliers are going to receive the RFQ and make an offer.

Once the supplier has been chosen, the purchase manager (or N+1) has to approve the purchase. No goods or services should be ordered or delivered until the contract is signed. Therefore make sure to have a signed agreement with your supplier. The purchase department is now autorized to buy products from this specific supplier.

PURCHASE PROCESS

Analyse the Quotation received and select the supplier that best suits your expectations.

Once the supplier has been chosen, the purchase manager (or N+1) has to approve the purchase. No goods or services should be ordered or delivered until the contract is signed. Therefore make sure to have a signed agreement with your supplier. The purchase department is now autorized to buy products from this specific supplier.

A standard process allows automation and the use of technology which will reduce the cost of the process. (cf. automated PO). The system is going to check stock levels and directly create PO requests to the specific supplier associed to the product.

The system is going to check stock levels based on min & max stocks and directly create PO requests to the specific supplier associed to the product.

37


Product Creation

PUR. MANAGER

Supplier Creation

Defining Purchase Needs

PUR. DPMT

Purchase Order

SUPPLIER

Automated Purchase Order

Goods Receiving Process

WAREHOUSE

Inventory

ACCOUNT.

Purchase need

Define Business Needs

1

Develop Procurement Strategy

2

Supplier Selection and Evaluation

3

cf. Supplier Audit

Purchase order request

4 Create RFQ

5

No

6

Receive RFQ

Decide

7

Quotation received

Yes PO Approved

Send PO & supplier contract

8

Receive PO cf. GMP goods receiving

Stock level not okey

Recieve Goods

9

Process Interface

10

Stock level verification

11

Generate invoice on PO

Stock level okey

12

Invoice verification

13 Invoice release

END

38

Paiement Order

14


A purchase order is a legally binding document between a supplier and a buyer. It details the items the buyer agrees to purchase at a certain price point. It also outlines the delivery date and terms of payment for the buyer. Purchase order computer systems have made the purchasing process more efficient and allow for better inventory and payment tracking. You need to understand what the fundamental business requirements are. At this point, it is important to understand the difference between a requirement and a solution. For example, the business requirement is to have a software to help to get information published on the company intranet. A software to publish information on the company intranet is a solution – not a requirement. The requirement is to be able to publish information on the intranet. It may be that an outsourced solution is a better option. Depending on the scale of your project, there could be a very wide range of potential solutions and approaches to your business need and a number of ways of researching the market and selecting a supplier. After researching the market and establishing your procurement approach, you need to evaluate the solutions available. This may involve a formal tender process or an on-line auction. Your criterias for comparing different solutions and suppliers are critical. Weight the key criterias heavily and don’t attach too much importance to aspects that will have little impact on the solution. A good solution is to make a thorough audit of the Supplier before buying any goods. Once you have selected and evaluated a group of Suppliers send a request for quotation to these suppliers in order to see which supplier has the best price or the good that best suites your company’s needs. Generate the RFQ and send it to all your selected Suppliers

Analyse the Quotation received and select the supplier that best suits your expectations. Once the supplier has been chosen, the purchase manager (or N+1) has to approve the purchase. No goods or services should be ordered or delivered until the contract is signed. Therefore make sure to have a signed agreement with your supplier. The purchase department is now autorized to buy products from this specific supplier. Upon delivery, match the received items to the description stated on the accompanying bill of lading, as well as the description on the related purchase order. Use a preprinted receiving checklist to inspect each delivery. Items likely requiring review are the quantity received, comparison to a quality threshold, and the date and time of receipt. Note any variances on the checklist. Initial the checklist when the review is complete. Major discrepancies can lead to rejection of the delivered goods.

PURCHASE PROCESS

The suppliers are going to receive the RFQ and make an offer.

A standard process allows automation and the use of technology which will reduce the cost of the process. (cf. automated PO).

The system is going to check stock levels based on min & max stocks and directly create PO requests to the specific supplier associed to the product. Make sure to align your invoice on the exact number of goods you have received. Generate invoices based on the good reception form. It’s used by stores, procurement and finance to raise any issues, update the stock records and be matched against the original purchase order and supplier invoice, to allow payment to be made. All commercial organizations have a legal responsibility to account for their finances including for the goods and services that they procure. It is important therefore that proper records are maintained e.g. to record dates prices and department details as well as to categorize goods and services appropriately to distinguish between capital goods and expenses for example. This can have a crucial bearing on how the finances of the organisation are described which in turn can have a tax and profitability impact. A standard process allows automation and the use of technology which will reduce the cost of the process. (cf. automated PO).

39


Product Creation

Supplier Creation

Defining Purchase Needs

Purchase Order

PURCHASE MANAGER

Automated Purchase Order

Goods Receiving Process

Inventory

PURCHASE DEPARTMENT Product 1

Reordering rules

No

2

Define Min Qtty

Define Max Qtty

3

Approved

Yes

Define supplier

4

Apply Rule

5

Purchase Reorder

40

Define Qtty multiples


An Automated Purchase Order is a major part of the purchase process management. For some items you hold in stock, it might be useful to have rules making sure you never run out of stocks (for example, products with a high demand, or large items requiring a lot of storage space meaning they’re harder to stock). You therefore set up rules so that an automatic replenishment for those items is made, based on minimu stocks available. The purchase department employee perceives the need to increase the company effectiveness through automated purchase orders based on the defined stock levels and once the product has been created.

The employee defines the following reordering rules. These rules are based on a dynamic adjustement of minumum/ maximum stock levels based on historical stock consommation.

The employee defines the supplier that sells/ produces the product depending on your company’s needs.

Once the stock minimum level is reached Create a new purchase order

PURCHASE PROCESS

The employee asks the Manager the autorisation to create the reordering rule. The Manager accepts the request if it is justified and coherent.

41


Product Creation

Supplier Creation

Defining Purchase Needs

Purchase Order

PURCHASE MANAGER

Automated Purchase Order

Goods Receiving Process

Inventory

PURCHASE DEPARTMENT Product 1

Reordering rules

No

2

Define Min Qtty

Define Max Qtty

Define Qtty multiples

3

Approved

Yes

Define Supplier

Process Interface

Stock level reached

Automatic PO creation

42

4

5


An Automated Purchase Order is a major part of the purchase process management. For some items you hold in stock, it might be useful to have rules making sure you never run out of stocks (for example, products with a high demand, or large items requiring a lot of storage space meaning they’re harder to stock). You therefore set up rules so that an automatic replenishment for those items is made, based on minimum stocks available. The purchase department employee perceives the need to increase the company effectiveness through automated purchase orders based on the defined stock levels and once the product has been created.

The employee defines the following reordering rules. These rules are based on a dynamic adjustement of minumum/ maximum stock levels based on historical stock consommation.

The employee defines the supplier that sells/ produces the product depending on your company’s needs.

Optional: Once the stock minimum level is reached there is an automatic purchase order that can be create by putting in place a purchase order software.

PURCHASE PROCESS

The employee asks the Manager the autorisation to create the reordering rule. The Manager accepts the request if it is justified and coherent.

43


Product Creation

Supplier Creation

Defining Purchase Needs

PURCHASE DEPARTMENT

Purchase Order

Automated Purchase Order

Goods Receiving Process

Inventory

QC

Start

1

Purchase Order

Receive: Count goods quantities upon arrival

2

cf. Receiving check list & SOP

3

Check delivery labeled

Update data and issues goods received note

4

Sign and circulate goods received note

5

Not good Terminated

Set in Quarantine

QC Sample

6

QC Test approved

7

Yes Yes Release goods

No Usable stock

Dispense

End

44

Terminated

8

9

10


A QC is a system for ensuring that products are consistently produced and controlled according to quality standards. It is designed to minimize the risks involved in any pharmaceutical production that cannot be eliminated through testing the final product.

Depending on your Purchase order and on the goods you are going to receive your process is slightly going to change. Upon delivery, match the received items to the description stated on the accompanying bill of lading, as well as the description on the related purchase order. Use a preprinted receiving checklist to inspect each delivery. Items likely requiring reviews are the quantity received, comparison to a quality threshold, and the date and time of receipt. Note any variances on the checklist. Initial the checklist when the review is complete. Major discrepancies can lead to rejection of the delivered goods. Identify each item in a delivery and ensure that it is properly labeled with a bar coded tag or other label that includes the item number, quantity, and unit of measure. If there is some uncertainty regarding which item number to use, consult with the senior warehouse staff or purchasing department.

The goods receipt note is an internal document produced after inspecting delivery for proof of order receipt. Generally produced by your stores team.  It’s used by stores, procurement and finance to raise any issues, update your stock records and be matched against the original purchase order and supplier invoice, to allow payment to be made.

PURCHASE PROCESS

1. Update the receiving log with the date and time of receipt of each delivery, as well as the name of the shipper, supplier, purchase order number, and description of goods received. 2. Send a copy of the signed bill of lading to the billing clerk in the accounting department. 3. File the master copy of the billing of lading by date in the warehouse filing area.

The goods received are set in quarantine until the QC has approved the release of the goods. Compliance with release specifications can be demonstrated by performing a complete set of tests according to approved specifications before the final product is released onto the market. Pharmaceutical manufacturing requires continual monitoring of all aspects of the process: raw ingredients, manufacture, packaging, and storage. Each jurisdiction has codified good manufacturing practices (GMPs), specifying the workflow, record-keeping, and quality requirements for the manufacturing process. The particular drug and the specific manufacturing processes determine the type and number of tests carried out by quality control (QC) laboratories. If all tests are conclusive the product can be release.

Redefine the goods labelling to usable stocks.

Allocate the goods to the different production units.

If a delivery arrives when a physical inventory count is being conducted, segregate the goods in a clearly marked storage area, and do not record these items in the inventory database until after the physical counting process is complete.

45


Product Creation

Supplier Creation

Defining Purchase Needs

Purchase Order

ACCOUNT. OR PUR. MANAGER WAREHOUSE

Automated Purchase Order

Goods Receiving Process

Inventory

QC

Start

Define inventory date

Define inventory date

1

Date Validation

2

Order count tags

3

Preview inventory

4

Pre-count inventory

5

Complete data entry

6

Notify outside storage locations

7

Freeze warehouse activities

8

Issue tags

9

Assign count areas

10

Count inventory

11

Verify tags

12

Enter tag information

13

Investigate unusual results

14

End

46

Define inventory date

15


In a business that does not have accurate inventory records, it is necessary to periodically conduct a complete count of the inventory (known as a physical count). As the following procedure will show, it takes a great deal of effort to complete an accurate physical inventory count, so companies tend to limit the number of counts completed per year. Schedule the date when the inventory is going to take place with the Warehouse team and QC managers. This is usually done at the end of a month, quarter, or year, to coincide with the end of a reporting period.

Date validation approved by N+1 Order a sufficient number of two-part count tags for the amount of inventory expected to be counted. These tags should be sequentially numbered, so that they can be individually tracked as part of the counting process. Review the inventory several days in advance of the scheduled inventory count. If there are missing part numbers, or if items appear to be in a condition that would be difficult to count (such as not being bagged or boxed), notify the warehouse staff to make the necessary corrections.

If there are any remaining data entry transactions to be completed, do so before the physical inventory count begins. This includes transactions for issuances from the warehouse, returns to the warehouse, and transfers between bin locations within the warehouse. If the company has any outside storage facilities or third-party locations that hold company inventory on consignment, notify them that they should count their inventory on hand as of the official count date and forward this information to the warehouse manager. Stop all deliveries from the warehouse, and also segregate all newly-received goods where they will not be counted. Otherwise, the inventory records will be in a state of flux during the inventory count, and so will not be entirely reliable.

PURCHASE PROCESS

Go through the inventory several days in advance and count any items that can be placed in sealed containers. Seal them in the containers and mark the quantity on the sealing tape. This makes the counting task much easier during the actual count. If a seal is broken, then a counting team will know that they need to re-count the contents of a container.

Assemble two-person teams to count the inventory, and instruct them in their counting duties. These duties involve having one person count inventory while the other person marks down the information on a count tag. One copy of the tag is affixed to the inventory, while the team retains the other copy. An inventory clerk issues blocks of count tags to the count teams. Each team is responsible for returning a specific numeric range of count tags, whether or not the tags are used. Maintaining control over all count tags ensures that lost tags will be investigated promptly. One person on each team counts a specific item within a bin location, and then the other person marks the bin location, item description, part number, quantity, and unit of measure on a count tag. The team affixes the original copy of the tag to the inventory item, and retains the copy. Upon completion of a count area, each count team returns to the inventory clerk, who verifies that all tags were returned. If there are more warehouse areas to be counted, assign Enter the information on the count tags into an online data entry form. Once data entry is completed, print a report showing all tag numbers entered, sorted by tag number, and look for any gaps in the numbers. Investigate any numbering gaps found. This will ensure that all count tags issued were included in the file. Re-sort the inventory report several ways to look for unusual information, and investigate the tag entry associated with each one. It may be useful to evaluate this procedure after every count, to see if the procedure should be altered to compensate for counting issues experienced.

47


FINANCE REPORTING PROCESS

49


ACCOUNTING Daily & Monthly Procedures

EMPLOYEE

CONTROLLING

Account Reconciliations & Payment

Planning

ACCOUNTANT CONTROLLER

Reporting

CFO

Compliance & Control

BOD

Daily Procedures

1

Month-End Close

2

Account Reconciliations

3

Planning

Reporting

4

5

Compliance & Control

50

Strategic Plan & Validation

6


Financial management is an essential part of leading a business and includes a tight and constant collaboration between employees, accountants and controllers, the CFO and the Board of Directors.

The Employee executes his daily procedures which are sent to the Accountant.

The Accountant/ Controller is in charge of making the Month-End Close which is sent to the Controller.

The Accountant/ Controller is in charge of making the Account Reconciliations which is sent to the CFO.

The Accountant/ Controller is in charge of making the Management Reporting.

The CFO makes the Compliance Reporting after checking all data.

FINANCE REPORTING PROCESS

The CFO is in charge of executing the Planning delivered by the Boad of Directors.

51


ACCOUNTING

CONTROLLING

Account Reconciliations & Payment

Daily & Monthly Procedures

EMPLOYEE

Reporting

Compliance & Control

ACCOUNTANT

Purchase Orders

Purchase Journal Entries

Sales Orders

Sales Journal Entries

Goods & Services Receipt

Accruals & Prepaids

4

Timesheets

FTE Costs

5

Asset

6

Grants

7

Loans

8

1

MONTHLY

DAILY

Planning

52

2


The firs step towards effective financial management is the recording of accounting documents lead by the accountant in constant collaboration with employees on a daily and monthly basis.

Purchase Orders executed by the Employee are entered into the Purchase Journal by the Accountant.

Sales Orders executed by the Employee are entered into the Sales Journal by the Accountant.

Goods & Services Receipt, Purchase Journal Entries and Bank Records are compiled into the Accruals and Prepaids by the Accountant.

The Accountant is in charge of compiling goods to be recorded as assets.

FINANCE REPORTING PROCESS

Timesheets delivered by the Employee are compiled into the FTE Costs by the Accountant.

The Accountant is in charge of recording all Grants postings.

The Accountant is in charge of recording all Loans postings.

53


ACCOUNTING Daily & Monthly Procedures

CONTROLLING

Account Reconciliations & Payment

Planning

ACCOUNTANT

Reporting

Compliance & Control

ACCOUNT MANAGER 1

Receive Bank Records 2

Receive Supplier Invoice

3

4

Payment order 5

Reconciliate customer invoices

Payment followup

54

Escalade to CFO


Following the daily and monthly procedures, the accountant proceeds to the reconciliations of accounts and the payments of invoices.

The Employee executes his daily procedures (PO, SO, Goods & Services Receipt, timesheets).

The Accountant enters data from PO & SO into Journal.

If necessary, data is entered by the Accountant in a subledger before consolidation.

The Accoutant is in charge of compiling data from daily procedures and edit it after consolidation.

FINANCE REPORTING PROCESS

The Controller is in charge of making the Consolidation Process.

55


ACCOUNTING Daily & Monthly Procedures

CONTROLLING

Account Reconciliations & Payment

Planning

Reporting

CFO

Compliance & Control

BOD Strategy

Environment Analysis

Company's Positioning

Goals

1

Strategic Orientations

2

Resources

3

Operational Plans & Budgets

4

Validation

5

Performance Monitoring, Analysis & Communication

Financial translation & Goals

6

Budget Control

Dashboard

Performance Evaluation

7

Reporting

Plans of Action

56

Activities Programming

Resources Alignment

8

9


As part of the controling procedure, the planning process is continuous effort of excellence lead by the CFO in compliance with expectations from the Board of Directors.

The Board of Directors defines the Strategy.

The CFO analyses the market environment, defines the company’s positioning and chooses the strategic orientations through the Strategic Plan.

The CFO lists the goals and resources of the company.

The Board of Directors validates or refuses the CFO’s Operational Plan & Budgets.

The CFO translates financial data and goals into a Budget Control. The CFO displays Performance Monitoring, Analysis & Communication on a dashboard.

FINANCE REPORTING PROCESS

The CFO defines an Operational Plan & Budgets and sends it to the Board of Directors.

The CFO evaluates the performance of the company.

The Board of Directors validates or refuses the CFO’s Performance Evaluation through reporting.

The CFO defines the Plans of Action, Activities Programming and Resources Alignment.

57


ACCOUNTING Daily & Monthly Procedures

ACCOUNTANT

CONTROLLING

Account Reconciliations & Payment

Planning

CONTROLLER

Reporting

CFO

BOD

Budget Plan & Forecasting

GL Close

1

Variance Analysis

2

P&L Analysis

3

MD&A Disclosures

4

Hard Close

5

Internal Reporting

6

Financial Reporting

7

Cash Flow and Other Reporting

8

Management Reporting

58

Compliance & Control

Board

9


During the reporting process, accountants, controller and CFO work hand in hand to concatenate all the financial data to provide meaningful information to the Board of Directors

The Accountant sends the GL Close to the Controller. The CFO sends the Budget Plan & Forecasting to the Controller.

The Controller analyzes variance between YTD Actuals and Budget.

The Controller analyzes the YTD P&L statement.

The Controller executes the YTD hard close and sends it to the CFO.

The CFO is in charge of making a YTD internal reporting from Hard Close, Budget Plan & Forecasting data.

The CFO executes a financial reporting.

FINANCE REPORTING PROCESS

The Controller discloses the Management Discussion and Analysis.

The CFO executes a cash flow and other reporting.

The CFO displays all the data in the Management Reporting which is sent to the Board of Directors.

59


ACCOUNTING Daily & Monthly Procedures

Account Reconciliations & Payment

CONTROLLER

CONTROLLING Planning

Reporting

CFO

Compliance & Control

BOD

Year-End Hard Close

1

External Reporting

GAAP Reporting

3

Footnotes and Disclosures

4

Compliance Reporting

60

2

Board

5


Through the compliance and control process, you ensure the correctness of your reporting and ensure reliable financial statements.

After the end of the year, the controller sends the yearly hard close to the CFO.

The CFO is in charge of making a yearly external reporting.

The CFO compiles a yearly balance sheet and P&L statement.

The CFO makes the Compliance Reporting after checking all data and sends it to the Board of Directors.

FINANCE REPORTING PROCESS

If necessary, the CFO inserts footnotes and disclosures to the financial statement.

61


Notes

63


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