QAD Financials

Work Center Rates using Cost Simulations in QAD’s Enterprise Applications

Wed, 30 Jun 2010 17:38:00 GMT

Did you know that you can copy work centers into a Cost Simulation cost set in the Cost Management Menu? Why would you do this? Generally, companies update their standard costs on an annual basis. The cost components of a manufactured item’s cost include:

· The product structure.

· The routing run time.

· A subcontract cost for a routing operation.

· Work center associated with a routing operation.

· Work center rates for labor and burden.

Of all these components, work center rates will typically change year over year. These changes occur as a result of the direct labor resources associated with those work centers. These direct labor employees will obtain raises, retire or new hires will start working in those work centers. Using cost simulation, you can begin changing your cost assumptions months before you need to deploy the new standards.

You will be able to generally predict what next year’s labor cost will be. So the effort for the cost simulation is as follows:

· Copy your production work centers into your cost simulation cost set.

· Update the rates in the simulation work centers.

· Roll the routings.

Performing this effort, months before deploying your new standards, will provide time for good analysis of changes in cost instead of waiting till year end to perform the mechanical roll-up.

For more information regarding this content, contact avitullo@logan-consulting.com

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Expediting Your Month-End General Ledger Closing Using QAD Enterprise Applications

Tue, 29 Jun 2010 13:31:00 GMT

Closing your general ledger should be a seamless event lasting from 1 to 3 days in length. Assuming your company uses the operation modules of QAD, integration of those modules provide financial transactions to the general ledger for the following transactions:

· Purchase order receipts including purchase price variance calculation from standard or average cost.

· Voucher transactions including accounts payable price and quantity variances.

· Sales Order shipments at standard or average cost.

· Invoicing transactions for revenue and accounts receivable.

· Manufacturing transactions including movement of inventory from the perpetual ledger to work in process and to the perpetual finished goods ledger including manufacturing rate and quantity variances for material, labor, burden and subcontract components of the manufactured parts costs.

Typically, sub-ledgers that are not integrated include payroll and Property, Plant and Equipment. This results in journal entries required for closing that are not integrated including the following:

· Actual payroll cost including employee and employer taxes, garnishments, etc.

· A payroll accrual of payroll cost accrued since the last payroll through month end.

· Property, Plant and Equipment entries including asset additions, disposals, transfers, retirements and depreciation expense.

· Accrued Expenses including Legal, Taxes, etc…

· Prepaid Expenses.

· Budgeted Expenses.

The tools in the QAD’s general ledger for recording the non integrated entries include:

· Standard Transaction Maintenance. Use this tool to record the payroll, PP&E and other entries from sub-ledgers that are not integrated from QAD.

· Reversing Transaction Maintenance. Use Reversing Transaction Maintenance to record the accruals and pre-paids. Reversing entries record in the current closing month are automatically reversed on the following month. This will insure that there are no un-accounted for accruals and pre-paids in the next accounting month.

· Transaction Copy. Use transaction copy of journal entries that are the same month over month. This can be used for budgeted expense entries that are recorded throughout the accounting year.

The versions of QAD’s Enterprise Application Standard Edition, including all eB2.1 and older version did not have Excel integration built into the software for loading Journal Entries. Also, if a journal entry with more than one entity is recorded, than the accountant must manually balance the journal entry across entities. A number of third-party applications exist to automate this process. Logan Consulting journal entry upload application allows the user to do the following:

· Multiple GL references per single upload.

· Both Reversing and Standard Entries uploaded in a single upload.

· Automatic inter-entity balancing if journal entries cross entities.

For more information regarding this content, email avitullo@logan-consulting.com.

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Electronic Funds Transfers

Mon, 28 Jun 2010 15:39:00 GMT

Managing costs has become an everyday occurrence for business managers. This blog discusses cost associated with cash disbursement and cash receipts paid to your financial institutions.

EFT’s come in a variety of different types. They include:

· Cardholder-initiated transactions, where a cardholder makes use of a payment card

· Direct deposit payroll payments for a business to its employees, possibly via a payroll services company

· Direct debit payments, sometimes called electronic checks, for which a business debits the consumer's bank accounts for payment for goods or services

· Electronic bill payment in online banking, which may be delivered by EFT or paper check

· Transactions involving stored value of electronic money, possibly in a private currency

· Wire transfer via an international banking network (generally carries a higher fee)

· Electronic Benefit Transfer

Business to Business EFTs typically comes in two different types. These two types include Wire Transfers and ACH transfers.

Wire transfers are EFT between two banks. A wire transfer is simply an electronic transfer of funds. A wire transfer allows people on opposite sides of the globe to quickly and easily exchange money. The term wire transfer originates from a time when telegrams were used as the means of communicating over long distances. During that era, a wire transfer was a message sent over a telegram line, or wire, directing an amount of money to be given to a particular person. A wire transfer is a relatively safe means of instantaneously transferring money. The identities of the bank account holders are confirmed and the funds are guaranteed, so the potential of fraud in a wire transfer transaction is limited. A wire transfer can also be called a bank transfer or EFT (electronic funds transfer). An ATM transaction would be an example of a wire transfer.

ACH EFTs

(Automated Clearing House) is a system of the U.S. Federal Reserve Bank that provides electronic funds transfer (EFT) between banks. It is used for all kinds of fund transfer transactions, including direct deposit of paychecks and monthly debits for routine payments to vendors. The ACH is separate and distinct from the various bank card networks that process credit card transactions. ACH operations are done in a batch mode, which can take up to 72 hours before the money is actually transmitted. A return notification is sent if there are insufficient funds in the account.

Banks Automated Clearing House (ACH) is an electronic payment delivery system that allows you to make payments or collect funds electronically through the ACH network. How it works

ACH transactions are generally next-day entries when exchanged with other financial institutions. Accounts payable and accounts receivable functions include:

• Direct deposit

• Consumer debits

• Check conversion

• Corporate trade payments

Potential benefits

• Improved forecasting by eliminating check float

• Improved efficiency and accuracy by utilizing an electronic platform

• Reduced exposure to check fraud by reducing or eliminating paper check volume

• Reduced check expenses.

Cost Associated with EFTs

Wire Transfer EFT Costs Examples:

DOMESTIC fees

· Outgoing $25

· Incoming $12

International Fees

· Outgoing – funds Sent in USD - $45

· Outgoing – funds Sent in FX - $35

· Incoming – $16

ACH EFT Costs Examples:

· 1-250 Transactions = $0.00.

· 251 and Greater $0.05 Per transaction.

· Payroll Transactions $0.40 per transaction.

Clearly, utilizing ACH is a more cost effective way to process cash transactions versus wire transfers.

Andy Vitullo

avitullo@logan-consulting.com

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Cash Flow Projections with QAD's Enterprise Applications

Mon, 29 Mar 2010 14:43:00 GMT

Cash Flow Porjections require a view of the sources and uses of cash. In QAD's Enterprise Applications: Standard Edition, you can use the 31.8 Cash Flow Projection Report to give you good solid information. The report cash be run to display data in daily, weekly, and monthly buckets.

Customizations and their Impact on Upgrading QAD for Domain

Thu, 18 Mar 2010 14:46:00 GMT

Over the years, Logan Consulting has assisted a number of companies in their upgrade projects. One of the most significant upgrades from a planning, cost and project execution standpoint is the upgrade from a Pre-Domain version to a Post Domain version. If your QAD instance is a pre-domain environment and you have a substantial amount of custom programs, your upgrade timeline will be dependent on the code remediation task.

Arm's Length Transactions and QAD's Enterprise Applications

Wed, 10 Feb 2010 14:05:00 GMT

An arm’s length transaction involves the buying and selling of goods, services, properties, or stocks between two parties that are completely separate from one another. Generally speaking, an arm’s length transaction is the most common of all types of transactions. Here are some examples of qualifications that must be met in order for the activity to be defined as an arm’s length transaction.

Why Are You Not Using Evaluated Receipts Settlement (ERS) in QAD’s Enterprise Applications?

Tue, 02 Feb 2010 14:59:00 GMT

Evaluated Receipt Settlement (ERS) is a software program that converts an electronic unvouchered receipt document (within QAD’s Enterprise Applications) into an approved voucher for payment without manual intervention. Alternatively stated, a human resource does not need to vouch an invoice for those receipts that have been enabled by the ERS program. For the suppliers that provide items within the ERS program, a physical invoice is not required nor should an invoice be provided from your supplier.

Switching to a 4-4-5 General Ledger Calendar

Thu, 28 Jan 2010 18:20:00 GMT

The traditional Gregorian calendar is the annual calendar that you personally measure time within the calendar year. The Gregorian solar calendar is an arithmetical calendar. It counts days as the basic unit of time, grouping them into years of 365 or 366 days; and repeats completely every 146,097 days, which fill 400 years, and which also happens to be 20,871 seven-day weeks. Of these 400 years, 303 (the "common years") have 365 days, and 97 (the leap years) have 366 days. This gives an average

Post General Ledger Transactions in Batch Daily with QAD Enterprise Applications

Thu, 28 Jan 2010 15:32:00 GMT

Within QAD’s Enterprise Applications, General Ledger transactions are created as un-posted transactions. Un-posted transactions are not visible in the general ledger trial balance and therefore would not be included in the financial statements. The operation modules in QAD generate un-posted transactions when financial events occur.

Documenting Collection Calls in QAD's Enterprise Applications

Wed, 27 Jan 2010 14:58:00 GMT

Accounts Receivable collections are a process fraught with telephone conversations and follow-up activities. An effective collector makes timely calls, sends timely emails and sends statements of accounts to customers where accounts are past due.