The following matrix supplies a priority based on the highest score between the following;
Ranking Description
1 Not directly in the process
2 May be indirect impact, if not transferred from Sales Order to purchasing module
| 3 A decision at this point will impact accuracy and margin if not factored the remaining processes become inaccurate. 4 Only when identified by auditors AND when the process fails at location override |
Leverage Points
Noted Systems Analysis "Meadows" originally identified 9 leverage points which in a complex system can change the outflows when adjusted at the inflow. Not unlike a business process input changes the outcome Meadows later identified 12 leverage points.
Leverage points in this scenario would have two defined type(s);
- Low or Indirect - Could impact the system(s).
- Direct - Does impact the decisions in the system(s).
High or Direct impacts
In the original migration from 10 Key adding machines to software technology, we had strong controls around accounting decisions. The time called for such limitations and according to all external stakeholders we want to have these controlled to enable the validity and integrity of your financial reports.
Normally, however we have work to do and getting back to this stage will require several stages of maturity.
The consensus in systems thinking circles would avoid the re-enforcing loop concept. By definition this loop only would apply to ideal and mature control around the systems and technology. Perhaps a hybrid cloud. Until a later time we want to avoid this type of scenario.
The potential to constrain your organizations delivery may be at risk using such controls unless you've run a tight ship over time.
Keep in mind that constraints may be expectation and anyone with the ability to influence this scenario has to be accountable for their impacts to the situation.
Your audience expects nothing less from any technology delivered.
Financial Workers
For an accountant or the organization responsible for supplying your budget; according to the way the company summarizes their locations and according to accounting codes structured for a specific purpose.
Business Intelligence Workers
Not knowing is not an excuse it is a risk and your role as employee must learn and understand the rules before transferring risk to the organization.
Reporting has the responsibility to take the event record and summarize in the case of financial transactions. Retention of the event record in it's original form being the ultimate responsibility.
IT and Business
We must avoid the scenario where we ask the business what they want when we have this documented for finance in the corporate policy.
General Accounting Acceptable Principles globally expect this to be the rule. In any case that this fails we are in a risk situation. We have altered the reinforcing loop; we must assume the impacts touch each leverage point.
By adopting the 5 capability model you earn the ability to control the situation without the fixed controls.
Priority Matrix (leverage points identified in expense transactions)
|
Process Steps / Input | Leverage Points |
GAAP Audit event record | US Sox 404 Assurance | ISO9000 | ISO 14001 | Product Quality | Customer | Supplier | ||||
| Weight | 5 | 5 | 5 | 5 | 5 | 5 | 5 | ||||||
| Correlatin | Total | ||||||||||||
| Expense request identified the need to submit a requisition; a manager must approve the expense request. | 1 | 1 | 5 | 1 | 5 | 2 | 5 | 100 | |||||
| Determine in country - Drop ship requirement based on sales order | 3 | 3 | 3 | 3 | 3 | 3 | 90 | ||||||
| Override location code (journal codes on request charge accounts) to enable in country purchasing. | 5 | 5 | 5 | 5 | 5 | 5 | 5 | 17 | |||||
| Align all dependencies, by confirmation from suppliers before issuing a purchase request- to ensure on time delivery | 3 | 3 | 1 | 1 | 1 | 1 | 5 | 75 | |||||
| Evaluate On Time Delivery trends | 1 | 1 | 3 | 1 | 3 | 3 | 5 | 85 | |||||
|
3 |
1 |
1 |
1 |
1 |
1 |
45 | ||||||
16 |
14 |
17 |
9 | 19 | 15 |
24 |
|||||||
I love this article very very much. This is what i am looking for to control my expense. I do not know that expense software can decrease my expense efficiently but it does.
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