manage customer deduction

Manage Customer Deductions

Order to Cash

Manual Control SOP

SOP Document ID: R-COMET-MAC-2135

Note: Please click on this link Manual Control SOPs to view this Manual Control SOP; search the specifications folder using the MAC

Doc ID shown in the presentation title above.

2

Training Objectives

End-user support by providing explanation on how manual controls will function

Enable a smooth transition in the new environment

Provide examples on documenting evidence for manual controls (screen shots if applicable)

Provide opportunity for hands-on demonstrations

3

Control Activity - 5

Sub Process #

Risk Description

Control Activity Reference #

RCM Control Activity Description

Merck Assertion

01.06.04.00

Receivables are not collected or applied to the correct un-receivable account.

5 Write-offs require approvals before expected A/R balance is written off.

Existence / Occurrence, Valuation / Allocation

Key Control: YesFrequency: Event DrivenPerson Responsible: AR Manager (Person based on FAL)

4


Performance of Control: Write-offs require manual approvals before expected A/R balance is

written off. These approvals are routed to the AR Manager (based on FAL) for approval. The AR Manager will sign the form (paper or electronic) approving the amount to be written off, and file the document according to Merck record retention/privacy/confidentiality requirements.

5


Exception Management: If a discrepancy is identified for an unusual amount that needs to be

written off, the AR Manager will investigate. The resolution will be documented, signed (on paper or electronic) and retained according to Merck record retention/privacy/confidentiality requirements.

6


Sub Process #

Risk Description

Control Activity Reference #

RCM Control Activity Description

Merck Assertion

01.06.04.00

Receivables are not collected or applied to the correct un-receivable account.

6 Write-offs will be monitored for authorized changes.

Valuation or Allocation

Key Control: YesFrequency: Monthly (executed on a timely basis with specific consideration as to their importance in supporting the month-end closing process)Person Responsible: Credit Release Manager

7


Performance of Control: The Credit Release Manager will monitor write-offs outside the

tolerance limits using transaction FAGLL03 by viewing A/R accounting document types AB, DA and DZ for accounts, excluding the cash clearing account and tolerance account posted within the specified date range to review any potentially inappropriate postings and without supporting write-off approval documentation.

The Credit Release Manager will run the report two times with the company code for the market with the following parameters:

Report I: Select document types AB, DA and DZ Select write-off G/L accounts 65601001, 65602000 and 65603000 Select both cleared and un-cleared documents for the desired period Review that every entry has supporting documents. This report will

monitor everything in write-off G/L account. Report II:

Select document type DA Exclude account 40105000 (exclude entries below 100 dollars) All entries should have supporting documentation. This report will

monitor any authorized write-offs in prompt pay discount account. The Credit Release Manager will sign, date (on paper or electronic) and

retain the report according to Merck record retention/privacy/confidentiality requirements.

8


T-Code FAGLL03 (Input):

Enter the G/L accounts

9


T-Code FAGLL03 (Input Cont’d…)

Enter document types AB, DA and

DZ

10


T-Code FAGLL03 (Output)

Display of G/L account line items

11


Exception Management: If an unauthorized write-off occurred, the Credit Release Manager will

investigate the issue and include any supporting documentation and corrective actions with the FAGLL03 report.

12

Disclaimer

Congratulations! You have just completed this portion of COMET training. Please be aware that the

training you have just completed covers controls related to global requirements and an addendum

related to your local market requirements may exist. Please follow the MIDAS link provided on this

slide or the introduction slide to view the actual SOP and any control requirements that may be

relevant to your market.

Manual Control SOP Link - search the specifications folder using the MAC Doc ID shown in the

presentation.

With the objective of implementing COMET, we have developed common integrated business

processes utilizing the innovative SAP software that will allow our business to manage various types of

data. Roles used in this process (like Manager, Administrator, Inspector, Accountant, Engineer,

Representative, Planner, Maintainer, among others) are generic and will be utilized along the

nomenclature of SAP and do not reflect the organizational structure, hierarchy or job description of

MSD.

The above mentioned includes, but is not limited to, any reference to the aforementioned roles in any

of the following:

Electronic: Web based training, Work instructions, Instructor led training, Simulations, Quick

reference guides, SAP application including help references, Project documentation, Controls in

SOPs, Emails, All MIDAS content, E room, Instant messaging, Business policy procedures, Meeting

requests.

Printed: Any electronic data referenced above that is in printed format, Hand written notes.

Oral: Instructor led training, Help desk and Center of Excellence (CoE) assistance, Conversations

with your colleagues, family, and friends.

Nonverbal: Sign language

manage customer deduction

Documents