QAD Proprietary QAD Financial Shared Services  Shmuel Yaffa – QAD Business Consultant Strategic Accounts 1

QAD Proprietary Agenda  What are Financial Shared Services ?  What benefits do they provide ?  How does QAD Enterprise Edition supports Financial Shared Services ?

QAD Proprietary What are Financial Shared Services  Centralized approach to key Financial activities across multiple business units –In a central location –Remote from the parts of the organization  Typically for –Standardized flows –High labor-intensive flows –Activities that can benefit from economies of scale  Examples : –Accounts Receivable –Accounts Payable 3

QAD Proprietary Benefits  Harmonize the corporate accounting processes  Reduce back-office costs / economies of scale  Allow business units to focus on core activities  Increase productivity and quality  Free up working capital / increase cash flow 4

QAD Proprietary Benefits  Standardize the corporate accounting processes –Uniform process improvements –Increase corporate control over business units  Reduce back-office costs –Through economies of scale  Specialization –Allow business units to focus on core activities  Increase productivity and quality –Support growth –Increase customer and supplier visibility –Improve customer and supplier relations  Free up working capital / increase cash flow –Single cash pool 5

QAD Proprietary Different levels of Shared Services  Centralized organization, but all transactions remain within domain – Economies of scale / harmonized processes – Increase corporate control over business units  Centralized organization, working in a shared services environment – Economies of scale / harmonized processes – Increase corporate control over business units – Increase customer / supplier visibility – Free up working capital / increase cash flow

QAD Proprietary Traditional view Different organizations Different ERP domains Business Unit A Business Unit B Business Unit C Each business unit has its own administration. Operating in silo’s

QAD Proprietary First step Centralized organization Different ERP domains Business Unit A Business Unit B Business Unit C Single shared administration Switches workspaces to work in different domains

QAD Proprietary First step Centralized organization Different ERP domains Business Unit A Business Unit B Business Unit C Single shared administration Switches workspaces to work in different domains

QAD Proprietary Business Unit A Business Unit B Business Unit C Shared Services Automated postings between shared services and business units Single shared administration Works in the shared services domain. Second step Centralized organization Shared Services ERP domain

QAD Proprietary Second step Centralized organization Shared Services ERP domain Business Unit A Business Unit B Business Unit C Single shared administration Works in the shared services domain. Shared Services Automated postings between shared services and business units

QAD Proprietary QAD Enterprise Financials Enterprise Financials Fixed Assets Logistics Accounting Vertex Sales and Use Tax Interface Enhanced Controls Governance, Risk & Compliance Allocations BudgetingMulti-GAAP Tax Management General Ledger Accounts Payable Accounts Receivable Multi Currency Banking/Cash Management Cost Management Financial Shared Services Management Reporting Financial Analytics Consolidations Credit Management Internationalization

QAD Proprietary Centralized Data Management  Centralized Chart of accounts  Centralized Customer Master – Cross Domain Credit management  Centralized management of Exchange Rates  Centralized Management of Suppliers  Centralized Management of Daybooks

QAD Proprietary Financial Shared Services in QAD EE Crossing Domains Business Unit Domain A Business Unit Domain B Business Unit Domain C Single shared administration Works in the shared services domain. Shared Services Domain Z Automated postings between shared services and business units

QAD Proprietary Quick benefits with QAD Enterprise Edition  Shared Services for Accounts Receivables  Shared Services for Accounts Payables

QAD Proprietary Accounts Payable  Keep suppliers happy while protecting cash flow  Guarantuee correctness and genuiness of payments  Streamline process : minimize paperwork, minimize expense “The practices of a company in controlling its accounts payable processing influences the companies cash flow and supplier relationships”

QAD Proprietary Accounts Payable example AP balance for Supplier 1000 : 2500 EUR AP balance for Supplier 1000 : EUR Supplier 1000 Invoice 2500 EUR to A Invoice EUR to B A B C Shared Services 1.Different domains work with same supplier Supplier sends invoices to local business units Entered, matched and released for payment in business unit

QAD Proprietary Accounts Payable example 1.Different domains work with same supplier Supplier sends invoices to local business units Entered, matched and released for payment in business unit 2.Shared visibility of Supplier position across business units Optimize supplier relations / leverage buying position AP balance for Supplier 1000 : 2500 EUR AP balance for Supplier 1000 : EUR Shared AP balance for Supplier 1000 : EUR A B C Shared Services

QAD Proprietary Accounts Payable example 1.Different domains work with same supplier Supplier sends invoices to local business units Entered, matched and released for payment in business unit 2.Shared visibility of Supplier position across business units Optimize supplier relations / leverage buying position 3.Payments are processed from shared services domain Optimizes cash pooling across business units AP balance for Supplier 1000 : closed Created interco debt of 2500 EUR AP balance for Supplier 1000 : closed Created interco debt of EUR Single payment processed for EUR  Shared AP balance for supplier 1000 : 0 EUR Created interco receivables : 2500 EUR from Business Unit A | EUR from Business Unit B A B C Shared Services

QAD Proprietary Business Unit A Business Unit B Business Unit C Shared Services Accounts Payable Shared Services Free up working capital Cash Buffer of 100,000 EUR Single Cash Buffer of 150,000 EUR instead of 3 x 100,000 EUR

QAD Proprietary Accounts Receivable  Manage Balance Sheet : Monitor Receivables Balance  Ensure Proper Payment : Mitigate Credit Risk  Protect Cash : Convert Receivables quickly to Cash Collection “The collection of outstanding receivables represents the single most important source of cash for all organizations selling goods on open account.”

QAD Proprietary Accounts Receivable example AR balance for Customer 1000 : 2500 EUR AR balance for Customer 1000 : EUR Customer 1000 Site A invoices 2500 EUR Site B invoices EUR A B C Shared Services 1.Different domains work with same customer Each site sends invoices to customer

QAD Proprietary Accounts Receivable example 1.Different domains work with same customer Each site sends invoices to customer 2.Shared visibility of Customer position across business units Optimize credit management / dunning process /... AR balance for Customer 1000 : 2500 EUR AR balance for Customer 1000 : EUR Shared AR balance for Customer 1000 : EUR A B C Shared Services

QAD Proprietary Accounts Receivable example 1.Different domains work with same customer Each site sends invoices to customer 2.Shared visibility of Customer position across business units Optimize credit management / dunning process /... 3.Cash received centrally Optimize cash pooling across business units AR balance for Customer 1000 : closed Created interco credit of 2500 EUR AR balance for Customer 1000 : closed Created interco credit of EUR Single payment received for EUR  Shared AR balance for customer 1000 : 0 EUR Created interco payables : 2500 EUR to Business Unit A | EUR to Business Unit B A B C Shared Services

QAD Proprietary Centralized Month End Close  Close periods by entity Group  Run Consistency Check by multiple entities  Run revaluations by groups of entities  Run Reports by groups of entities – Aging Reports – Dashboards – Browses – Consolidated Financial Reports