6 Controls to Make Your Company’s Order-to-Cash Processes More Secure

  • by Anurag Barua, Independent SAP Advisor
  • April 9, 2010
Learn a few selected application controls in the order-to-cash area and their importance from an audit perspective. Understand mitigation measures in case these controls are inadequate.
Key Concept
Maintaining robust safeguards and controls around your organization’s revenue recognition processes is critical not only for accurate financial reporting but also to ensure that you are prepared to answer questions from your IT auditors.

Order-to-cash (OTC) is one of the most common and critical business processes for any company that sells a product or service. It consists of all the subprocesses and activities starting from the time a product or service is ordered to the receipt and proper recording of payment by the company. Key activities include sales order creation, shipping, delivery, recording of the issue of goods, billing the customer, and the receipt and recording of the payment. Based on a description of activities, it should be quite obvious that OTC processes play a very important role in generating a company’s revenue and profits.

Companies that use standard SAP ERP Central Component (SAP ECC) or SAP R/3 systems for their OTC processes need to implement strong controls to mitigate the risk of mistakes and fraud, as these processes straddle key modules such as sales and distribution (SD) and Accounts Receivable (AR).

I’ll show you six scenarios in the SAP system in which you can implement controls to help safeguard your OTC processes. All scenarios and screenprints pertain to an SAP ECC 6.0 system, but the concepts and controls apply to earlier SAP systems as well.

Anurag Barua

Anurag Barua is an independent SAP advisor. He has 23 years of experience in conceiving, designing, managing, and implementing complex software solutions, including more than 17 years of experience with SAP applications. He has been associated with several SAP implementations in various capacities. His core SAP competencies include FI and Controlling FI/CO, logistics, SAP BW, SAP BusinessObjects, Enterprise Performance Management, SAP Solution Manager, Governance, Risk, and Compliance (GRC), and project management. He is a frequent speaker at SAPinsider conferences and contributes to several publications. He holds a BS in computer science and an MBA in finance. He is a PMI-certified PMP, a Certified Scrum Master (CSM), and is ITIL V3F certified.

See more by this author


No comments have been submitted on this article. 

Please log in to post a comment.

To learn more about subscription access to premium content, click here.