Awara Purchase Manager for Controllers

Awara Purchase Manager for Controllers

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Do you really know where the money goes?

This post is intended especially for telling what Awara Purchase Manager can do for the company controller and other compliance officers. It serves as a complement to our standard Awara Purchase Manager brochure.

Awara Purchase Manager is an electronic invoice processing system that enables the control of each purchase invoice from initiation to payment. It brings efficiency and order into the process of monitoring purchases and their payments.

But Awara Purchase Manager does not only bring paperless efficiency. It comes with a lot of other valueadded features:
• The system enables real-time control of the whole purchase process.
• It can be made to communicate automatically with your on-line banking system, feeding the system with payment orders and receiving return feedback data of the payments.
• It enables automatic transfer of purchase data to the financial and tax accounting systems.
• It enables correct accounting of accruals in IFRS, GAAP, and other international standard reports.
• It enables transparent management reporting on all aspects of accounts payable.

By using Awara Purchase Manager the controller will have easy access to all data that is necessary for approving a payment and monitoring purchases. Together with the scanned invoice you can readily see, for example, to what contract the invoice refers; who initiated the purchase; who approved it; what limits they had; what was delivered and when. After delivery the system helps to track the receipt of all supporting documents that are needed according to Russian laws.

With Awara Purchase Manager you can put in place an efficient financial administration function that meets the highest international standards. And this is the only system globally that is especially tailored to meet the needs of the controller to ensure compliance with anti-corruption laws such as the US FCPA, UK Anti-Bribery Act, and the laws based on the OECD Convention on Combating Bribery.

Below follows a list of features that Awara Purchase Manager enables especially from point of view of efficient control.

COMPLIANCE WITH INTERNAL POLICIES

Control of procurement processes.

All purchases have to be recorded in the system.

• The system will allow the company to set a general rule that all purchases will have to be duly recorded in the system from their initiation with the control that no payments will be executed without following this rule and all the processing steps.

• This functionality serves as the fundament for implementing a proper control system.

Catalogue of approved suppliers.

• Enables to establish a catalogue of approved suppliers.

• System may restrict purchases to be done only from the choice of approved suppliers.

• This feature helps to control that suppliers are chosen by management decisions as opposed to ad hoc decisions on lower organizational level. Such ad hoc decisions may interfere with several organizational goals, such as quality management, partnership programs, best practices, discount programs and legal compliance. Ad hoc supplier choices may provide opportunities for personal gain or be initiated in connection with the aim to give an unlawful gain to a supplier or a third party.

Authorized Initiators.

• System allows to restrict the initiation of a purchase of defined type to pre-determined initiators (persons that have the right to initiate a purchase).

• This feature allows to red flag suspicious purchases when person that is not connected with the given business issue interferes in the process.

Authorized Approvers.

• The main actors in procurement processes are the one who initiates the procurement (initiator) and the one who approves the procurement (approver). Often it makes sense to keep these obligations separated.

• System enables the restriction of the rights to approve a purchase to a pre-determined list of authorized approvers.

• The approvers can be assigned approval rights for determined types of purchases and they can be limited in their approval rights, for example, what comes to monetary value of the purchase, periodicity (approve one-time transactions as opposed to periodic transactions), and choice of supplier.

DETECTION OF IRREGULARITIES

The history of each purchase can be monitored by various search criteria, for example:

• By following any of the features in the process in view of the integrated system showing the life-cycle of each purchase from initiation through payment to delivery.

• By verifying who was the initiator, who was the approver, what were the relevant levels of authorization.

• By supplier verifications. Has the supplier been officially approved according to the procedures and criteria for choice of suppliers? – Comparison of similar purchases from various suppliers; initiator and approver behaviors in respect to various suppliers.

• By monitoring deliveries to purchases. The system links all the documentation/records of deliveries that pertain to a certain purchase which enables controlling that the deliverables have actually been received with due quality.

Awara Round Trip Reporting Service

Awara IFRS Ready ©

Combating Kickbacks.

The data captured by Awara Purchase Manager and the checks and controls inherent in the system will enable to detect irregularities that may rise suspicion of kickbacks.

ENHANCE ACCURACY OF IFRS, GAAP, and MANAGEMENT REPORTS

Full automation means full integration of all financial software where all external data is entered into the systems of the company only once. For example, Awara Purchase Manager creates the postings to general ledger automatically upon execution of payments. But its more: The Awara Purchase Manager is IFRS Ready ©, meaning that the uniquely the differences in Russian and International accounting practice are recognized, and Awara Purchase Manager handles all postings for RAS as well as for e.g. IFRS or other defined standards.

PERSONAL TRAVEL AND EXPENSE REIMBURSEMENTS

Awara Purchase Manager includes a travel and expense reimbursement module that enables monitoring and reporting on all the individual expenses that are paid by an employer or for his/her personal use.

PURPOSE OF PURCHASE

Awara Purchase Manager contains the facility to record the ‘purpose of the purchase’ in connection with registering a purchase order. This feature yields a lot of benefits: it enhances the purchase discipline; it allows better quality of financial reports; and it helps to detect fraud or corruption.

BRING ORDER TO COLLECTION OF SUPPORTING DOCUMENTS

• Awara Purchase Manager will keep track of all supporting documents that are required under the Russian laws and by your corporate policies.

• The system will show which documents are lacking and who is responsible for their production.

OPTIMIZE TAX DEDUCTIONS

When the supporting documents are collected properly and in a timely manner, then you will be able to deduct the corresponding costs faster and thus receive significant tax gains.

IMMEDIATE YIELD ON INVESTMENT

The investment in Awara Purchase Manager yields immediate returns through:

• accelerated tax deductions

• enhanced discipline in procurement practices

• work with preferred suppliers

• freeing up of working capital by purchasing and paying at the right time

• ensuring that agreed discount programs are followed

CASH-FLOW PLANNING AND ACCOUNTS PAYABLE REPORTS

• With Awara Purchase Manager you will be able to make accurate prognoses of cash-flow needs.

The system stores data on all accounts payable, including supplies invoices, tax payments, loan service payments, investment schedules, periodic payments, etc. There is an opportunity to include estimates of non-documented payments.

Conversely the system enables to tailor any kinds of reports that are needed for management of accounts payables, such as, for example, maturity of outstanding debt, debt per supplier, debt per initiator, debt per type of expense.

COMPLIANCE WITH ANTI-CORRUPTION LAWS

Awara Purchase Manager has been especially tailored to meet the needs of the controller to ensure compliance with anti-corruption laws such as the US FCPA, UK Anti- Bribery Act, and the laws based on the OECD Convention on Combating Bribery. The anti-corruption, or anti-bribery, laws of developed countries are becoming increasingly severe and pose a new kind of compliance challenge for firms. Of particular significance for the controller is the fact that not only bribing is a criminal offense but the failure to prevent the organization from bribing is also an offense. This is explicitly stated in the new UK Bribery Act of 2010 (Section 7, UK Bribery Act).

This is a strict liability and when charged with a particular case of bribery the only defence is that the firm can show that it had in place adequate procedures designed to prevent its employees or other persons associated with the firm from undertaking acts of bribery.

In practice the company management has to create adequate procedures for preventing bribery also under the US FCPA. And the same follows from the OECD Convention.

Six Principles defining Adequate Procedures.

According to the guidelines to the Bribery Act published by the UK Ministry of Justice (and similarly with the OECD Convention) the ‘adequate procedures’ are defined by 6 principles (and similarly with the OECD Convention):

Proportionate procedures – The organization’s procedures are to be proportionate to the bribery risks it faces and to the nature, scale and complexity of the organization’s activities. The procedures are to be designed to mitigate identified risks and to prevent deliberate unethical conduct. They have to be clear, practical, accessible, effectively implemented and enforced.

Top level commitment – The top management is to be committed to a zero tolerance of bribery and actively pursue a strategy of prevention including by means of fostering a culture in which bribery is never acceptable.

Risk Assessment – The organization must assess the nature and extent of its exposure to potential external and internal risks of bribery. The periodic risk assessments include: country risk, sectoral risk, transaction risk, business opportunity risk and business partnership risk.

Due diligence – The organization should in order to mitigate identified bribery risks apply due diligence procedures, taking a proportionate and risk based approach, in respect of persons who perform or will perform services for or on behalf of the organization.

Communication ( including training) – The organization shall ensure that its bribery prevention policies and procedures are embedded and understood throughout the organization through internal and external communication, including training, that is proportionate to the risks it faces.

Monitoring and review – The organization shall monitor and review procedures designed to prevent bribery by persons associated with it and makes improvements where necessary.

Financial Software for Implementing the Bribery Prevention Policies.

A central role among the required procedures is assigned to the systems that actually implement the financial and commercial controls such as adequate bookkeeping, auditing, and approval of expenditure. Awara Purchase Manager is precisely such a system that enables these controls while ensuring transparency of transactions and disclosure of information, as it has been described above.

Awara Purchase Manager will help to implement proper decision making procedures and an orderly delegation of authority. A proper system for preventing bribery needs to enable the control of separation of functions and the avoidance of conflict of interests. These functions are achieved by Awara Purchase Manager.

Other Necessary Procedures.

Together with other specialists we can complement our software solution with offering full advice in putting in place all the necessary elements of a proper system for preventing bribery. These elements comprise, inter alia, the following procedures: the actions to show top-level commitment; risk assessment procedures; due diligence procedures; various policies, such as the policy for provision of gifts, hospitality and promotional expenditures, charitable and political donations; recruitment and other HR policies; policies for governing the relations with consultants, advisors, agents and other associated persons; enforcement and sanctions policies; communication policies.

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