Why upgrade to EE Financials Bill Wermes, Solution Consultant Lance LaCross, Solution Consultant CA Users Group February, 2010

Agenda Introductions Challenges in your business Benefits of QAD Enterprise Financials Components of QAD Enterprise Financials Demonstrate scenarios throughout Wrap Up

Goal for Enterprise Financials “To be the leader in financial applications for global manufactured product companies.” What does this mean? Best-in-class finance product for the global needs of a manufactured product company in both a single and shared services environment While there may be software products in a given country that fit a single country needs better, QAD’s direction is to be the best available globally Tier One products such as SAP may be as functional, but are too complex due to the number of industries they serve

Business Drivers of QAD Customers and Prospects: Companies need a way to make sense of all the data being collected within their organization – need increased visibility. Need to be able to answer strategic business questions. They are now being held accountable and therefore need to control and comply. Companies are growing worldwide and they need a system that will allow them to benefit from their global operations. They want a system that is easy to use.

Business Benefits QAD EE Solution provides: Efficiency - Complete access to financial data along with role-based processes Globalization - An integrated financial solution across the entire enterprise including multi-company, multi-currency, multi-GAAP, and multi-country organizations Compliance - Controls for data and processes – role-based security, segregation of duties Leverage Technology – powerful integration tools and user-definability Ease of Use & Standardization - An easy to use, scalable solution

Additional Benefits to upgrading: Reduce Customizations Increase User Productivity Take advantage of new functionality customers have told us they see tangible improvement in supply chain efficiencies and can serve their customers better with all of the enhancements we have made in the last 7 years. Ability to easily integrate with other QAD products & 3rd party applications using QXtend Take advantage of: Lean, Domain functionality, Customer Self Service, Supplier Visualization, Demand Mgmt, Business Intelligence Reduce customizations Cost savings, plus better standardization between sites, so less training, less confusion, etc. Future upgrade is easier due to less custom code Reduce operational costs Less time/resources spent on modifications support Less maintenance due to standard interfaces using QXtend; reduces costs of maintaining custom interfaces Less maintenance due to standard EDI trading partner modules Respond to globalization and consolidation needs again, when you upgrade, you standardize and reset your organization to a new level of application usage Increase user productivity A new user interface with less screens, less training time, faster data entry, supports users who have multiple roles, .NET User Interface with integration of Microsoft tools is available Easier access to data Ensure compliance Applies to industry compliance – life sciences, auto Applies to SOX compliance too Drive lean principles throughout the organization With all of the new functionality, there’s more of a focus to revisit processes, streamline & automate processes, take on new modules, like TMS, EAM, Sales force Automation, Marketing Automation, Demand Mgmt. Drive towards the perfect lean market. Reduce Operational Costs 6

First: Leverage Technology New powerful functionality to import/export data Bi-directional Excel Integration

New Enterprise Edition Concepts More, faster and better: Database and Shared Sets Multiple Accounting Layers allow for multi-GAAP reporting Dual Base Currency: Transaction amounts stored in multiples – Transaction, Base and Management Currency Multiple COA for reporting purposes

Database Sets QAD 2009 System e.g. management currency, users, … Database - Shared Set Entity = “Balanced Set of Books” Domain = Group of Entities w/ same Base Currency Database Sets QAD 2009 System e.g. management currency, users, … System-Wide Data e.g. COA, suppliers, customers, … Shared-Set Data Shared-Set Data Domain Data Domain Data Domain Data e.g. base currency, numbering, … Entity Data Entity Data Entity Data Entity Data Entity Data e.g. taxes, numbering, … Site Data Site Data Site Data Site Data Site Data e.g. inventory, cost, planning, … Location Location Location Location Location

Financial Analytics Ensures overall state of the business analysis as strategic options are analyzed for the CFO Align performance of business units to your overall company objectives Analysis and reporting from C-level executives to business unit managers Multi-layer accounting with support for simulations and what-if analysis Extensive drill-down and analysis capabilities Dashboards for customer and supplier information Supplementary Analysis Fields (SAF) C-Level execs needing to get reliable information quickly...

Accounting Layers / Books Transactions G/L IFRS Layer Mgmt “What If” Layer GAAP Accounting layers (books) provide ways of segregating transactions within a single GL account. The posting of transactions is controlled by associating daybook types with one of three system-defined accounting layers: official, management, and transient: If a daybook is associated with the Official layer, transactions are immediately posted to the general ledger. Management layers can provide different types of GAAP reports within one organization. Transient accounting layers enable temporary posting for review or analysis, before official posting.

Accounting Layers / Books Three Types Official Management Transient Unlimited Versions: Multi-GAAP reporting (Mgmt) IFRS Layer (Mgmt) Non US GAAP Layer (Transient) “What-If” Question (Transient) Audit Layer (Mgmt) Ability to combine accounting layers in reporting

Accounting Layers – Why Use Them? General Ledger Adjustment Layer IFRS Layer Mgmt. Layer Local GAAP Layer

Multi-GAAP Accounting layers allow multi-GAAP reporting from a single set of books Accounting Layers allow for multi-GAAP reporting Multiple charts of accounts (COA) for reporting purposes Ability to combine accounting layers in reporting Simulate GAAP transformation transactions Allocation module and Supplementary Analysis Fields to support IFRS 8 segment reporting Flexibility Management Layers – Official Management Transient

Additional help with IFRS IFRS 8 Segment Reporting – when a company has parts of the business operating in different business segments In order to compare information with other businesses in same segment you can use: SAF Codes to split info by segment Use Allocation module if you need to reallocate costs and revenues into the appropriate segments Accounting Layers helps support combination of local GAAP and IFRS as well as IFRS 1 (First-time Adoption) by using Adjustment Layers This approach allows for separately recording and tracking of the differences between local GAAP and IFRS Flexibility Management Layers – Official Management Transient

Multiple Currency Do business in any currency Process, pay and receive money in any currency Set up functional currencies by business unit Dual Base Currency Transaction amounts always stored in transaction currency, base currency and company management currency Revaluation options, both for functional and management currency Allows the global organization to conduct business in the required currency, and generate consolidated and management reporting in the mandated currency Do business in any currency Transaction Currency Base Currency Management Currency Flexibility to conduct biz in your own currency

Multiple Base Currencies Dual Base Currency: Transaction amounts always stored in transaction currency, base currency and company management currency and (Statutory Currency 11-2009) For example: Customer invoices In CAD (transaction) In MXN (base) In USD (management) MXN For example, a Mexican company keeps its books in MXN, reports into a US mother company and sends a CAD invoice to a customer 17

Define Exchange rates per type Per currency pair From validity date 18

Alternate Chart of Accounts The Alternate COA function provides the ability to generate reports using alternate COAs, in addition to a company’s operational COA An alternate COA consists of one or more account structures, each containing a group of non-duplicate alternate accounts. Reporting according to multiple account structures Legally mandatory chart – France, China, etc Group chart, Operational chart Multi-GAAP reporting IFRS, US-GAAP, other GAAP

Alternate COA Reporting Flow Source Chart of Account: GL Account, Sub-Account, Cost Center, Project Alternate COA 1 Alternate COA 2

Management Reporting Extensive set of reports Graphical output that is easy to customize Unlimited report variants can be created for any specific requirement Reports in company management currency and company chart of accounts for comparison of business operations Report in multiple currencies across domains Spreadsheet style browses that allow detailed selections and easily generate one-off reports Board Reporting made simple, and decision making made black & white with flexible, graphical reporting for the CFO Flexibility - Report Variances

Report Variants = Flexibilty Specific selection criteria can be stored and given a name Available next time the report is started Unlimited number of variants Saved for personal usage only or can be shared with other users Linked to a standard report All variants of one report are based on the same data, but use different filter criteria and can use a different report layout

Report Variants – What, When, & Who

Flexible Reporting

Financial Shared Services Have economies of scale to save back-office costs and support growth Sharing of chart of accounts and other key master data Sharing of customers and supplier across business units Workflow to move documents between business entities Link to document management to store electronic versions of paper documents such as invoices Cross-company AR and AP payments More efficient use of resources Better Mgt of cash AP and AR sharing of customer and suppliers COA cross company

Shared Sets Example QAD 2009 System - USD (Mgmt Currency) Americas GL Account Set 1 Europe GL Account Set 2 Domain 1 USD Domain 2 CAD Domain 3 PESO Domain 3 REAL Domain 4 CHF Domain 5 EURO Domain 6 GBP Customer Set 1 Customer Set 2 Supplier Set 1 Exchange Rate Set 1 Exchange Rate Set 2

Back to live software… Shared Services example with: Cross Domain Visibility Multi-Currency Inter-Co Workflow Messaging

SAF – Supplementary Analysis Field Provide additional analytical reporting To fine-tune transactions and reporting For example, IAS 14 (International Accounting Standards – Segment Reporting) (IFRS 8) requires that financial information be reported by line of business and geography. SAF’s allow the collection of this data without having to create additional General Ledger accounts

GL Analytical Coding Segments Additional Analytical Detail Entity Yr/Pd Layer/Book Daybook header level Primary GAAP Acct Sub-Account Cost Center Project SAF’s SAF’s SAF’s SAF’s SAF’s Up to five ‘supplementary analysis fields’ on a posting line line level can automatically retrieve SAF data from Operational transactions Site Product Line Region (Customer) Customer Type Supplier Type Item Type Item Group

SAF – Supplementary Analysis Field Hierarchy Per Each Structure = Up to 5 Concepts Concepts Concepts Concepts Concepts Concepts Codes Codes Codes Codes Codes Codes Codes Codes Codes Codes Codes Codes Codes Codes Codes Codes Codes Codes Codes Code Codes Code Codes Codes Codes Codes Codes Code Codes Codes Codes Codes Code Codes Codes Codes Codes Code

SAF codes can be defaulted to make data entry easier SAF Structures SAF codes can be defaulted to make data entry easier

Demonstrate powerful example using SAF Codes The Scenario… You need to reduce costs…pick on travel costs But, you do not have a good handle on any detail for those costs! If you could track more detail and then analyze that information…..you could make some informed decisions !

Budgeting Supports multiple versions of budgets Budget periods can be different from accounting periods Recording of forecasts On-line budget checking and warnings Import budget data from Microsoft Excel® Live modification of budgets using Microsoft Excel® Supports multi-level budgeting and actuals coming from multiple companies Quick, flexible, collaborative budgeting process for the Finance Manager Top Down Bottom Up Regional / Divisional Import/Export to from Excel

Now To The QAD Solution

QAD Budgeting provides real value: Integrated budgeting provides improved financial analysis and reduced IT involvement Online collaboration with all involved improving accuracy and shortening turn around time Automated transaction postings reducing errors, paper and manual processes

User-Defined Codes

Value Flexible – Designed by you You decide who has security to create UDF’s You decide what roles in your organization can use the new field

Consolidations A subsidiary entity can be a part of multiple consolidation entities Proportional Consolidation is supported You can build up hierarchies of consolidation entities Automatic tracking of intercompany transactions to support elimination Consolidate separately by accounting layer Support simulations Provides quick & complete consolidation process for the Finance Manager Multi-Level consolidation Hyperion Enterprise Financials Accounts Receivable General Ledger Accounts Payable Multi Currency Banking / Cash Management Cost Management Consolidations Financial Shared Services Allocations Credit Management Tax Management Financial Analytics Multi-GAAP Management Reporting Budgeting Governance, Risk and Compliance

GL Consolidation Consolidation Consolidation Consolidation Entity 1000 Domain A EUR Entity 2000 Domain B CHF Entity 3000 Domain C GBP Entity 4000 Domain D MXP Entity 5000 Domain E CAD Entity 6000 Domain F USD Consolidation Consolidation Entity 9000 Domain G EUR Entity 4002 Domain H USD Consolidation Entity 9999 Domain H USD

Allocations Allocations provides control and consistency Distribute costs and revenues to appropriate accounts, sub-accounts, cost centers and projects Supports recursive allocations Reuse result of previous allocation run as input for the next Validate results of allocation run before final posting Supports different allocation methods, including proportional based on usage/activity For instance distribute electricity costs to production cells based on kWh Square footage # employees in dept #hours billed Step allocations Enterprise Financials Accounts Receivable General Ledger Accounts Payable Multi Currency Banking / Cash Management Cost Management Consolidations Financial Shared Services Allocations Credit Management Tax Management Financial Analytics Multi-GAAP Management Reporting Budgeting Governance, Risk and Compliance

General Ledger Multi-Entity, Multi-Currency, Multi-Layer Support for recurring/reversing entries Extensive drill-down capabilities Flexible account structure with up to 5 optional Supplementary Analysis Fields per account combination Posting templates Multi-stage period closing Separate period for year-end corrections Bi-directional Microsoft Excel® integration for journal entries as well as for account setup Ensures all financial data is quickly accessible for drill down and corporate reporting Lean Concept applies - Recurring Reversing Templates Bi-directional Excel integration still maintain same validation Enterprise Financials Accounts Receivable General Ledger Accounts Payable Multi Currency Banking / Cash Management Cost Management Consolidations Financial Shared Services Allocations Credit Management Tax Management Financial Analytics Multi-GAAP Management Reporting Budgeting Governance, Risk and Compliance

Accounts Receivable Flexible aging reports Sharing of customers and credit limits between business units Automatic netting of invoices and credit notes Netting between customers and suppliers Write-offs and open item adjustments Dunning letters automatically generated Customer activity dashboard Full control on the total process between billing and collecting Netting between customers and suppliers Enterprise Financials Accounts Receivable General Ledger Accounts Payable Multi Currency Banking / Cash Management Cost Management Consolidations Financial Shared Services Allocations Credit Management Tax Management Financial Analytics Multi-GAAP Management Reporting Budgeting Governance, Risk and Compliance

Accounts Payable Streamline the process from purchase order to supplier payments Variances are generated based on 3-way match of PO, receipt and invoice Flexible matching and approval process Automate process of entering and approving supplier invoices with Scan daemon, document management and workflow routing Evaluated Receipts Settlement (ERS) eliminates the need to enter supplier invoices Netting between customers and suppliers Supplier activity dashboard Netting between customers and suppliers Enterprise Financials Accounts Receivable General Ledger Accounts Payable Multi Currency Banking / Cash Management Cost Management Consolidations Financial Shared Services Allocations Credit Management Tax Management Financial Analytics Multi-GAAP Management Reporting Budgeting Governance, Risk and Compliance

QAD Internationalization Support common local legal business practices across the world Support local languages Standardized solution as opposed to unique solution for each country Single code base: easier development of core model Support Shared Services from a single system Keep up to date with new and changing local requirements Run QAD across the globe Enterprise Financials Enhanced Controls Logistics Accounting Vertex Sales and Use Tax Interface Fixed Assets Internationalization

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