Use Incompletion Statuses to Improve Financial Performance and Reporting
- by David Burns, Owner and Managing Partner, Prime, LLC
- October 28, 2014
Learn how groups of incompletion statuses can be leveraged into your business processes to improve financial performance and reporting.
By reading this article, you will learn how to:
- Configure incompletion procedures
- Set the level of document control through the use of status groups
- Incorporate a periodic review of incompletion statuses into your business processes to improve financial performance and reporting results
Incompletion statuses in sales and distribution (SD) are flexible in that they permit you to validate that all data elements are populated in a document before the document is considered complete. The grouping of incompletion statuses permits these definitions to be assigned by document type and business process step. It also provides field-level validation and control that blocks subsequent functions (e.g., billing) until incomplete reference documents are complete.
The need for accurate sales data is critical to the success of any business. It is essential to the viability of the company, as a whole, and has implications on revenue recognition, forecasting, operations, production planning, sales, and accounting. Yet, accurate financial reporting based on sales orders has its challenges. Whether you use SAP standard or custom reports, the use and understanding of document statuses is vital to your success.
There are several building blocks upon which incompletion statuses are built. First is the SD incompletion log, which identifies missing documents per the rules you have configured, and allows quick drill-down capability to enter missing fields. Second are incompletion procedures, which group fields together that need to be validated for completion. Their primary purpose is to prevent follow-on transactions until the reference document is considered complete.
Using incompletion statuses provides the means to easily identify incomplete documents, correct errors, and improve your business processes. The improvements to cash flow and revenue recognition are substantial enough that these concepts should, at a minimum, be considered a fundamental part of your month-end close processes.
The essentials for comprehensive sales reporting include bookings (i.e., sales), billings (i.e., revenue), backlog (i.e., unfilled orders), and cash collections. I demonstrate how incompletion statuses can be incorporated into your business processes to improve financial performance and reporting. To complete the steps that I describe, you need a basic understanding of the order-to-cash process, SD tables, and the incompletion log.
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