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Protect Your System From Money LeaksAccounts Payable Watchdog™

Vladimir Forfutdinov, Control’s Force Inc.Randy Whitehair, Freudenberg-NOK

March 19, 2012

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BUSINESS DATA PROTECTION

• Why do you need a WatchDog?

• Money Leaks

• How does it Work?

• Where do you start from?

• Success Story

• Q&A

Agenda

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• Vendor Frauds and Errors

• Occupational Frauds

• Human entry input Errors

• System Errors

• Control across multiple ERPs‣ 2.7 ERP per company

• Control is vital duringbad economy

Why do you need a WatchDog?

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• Occupational Fraud‣ Fred manages vendor master‣ Mary runs vendor cheques‣ Fred and Mary conspire

• Vendor Errors‣ Duplicate invoice‣ Part shipped but not found in the PO‣ Commodity with wrong price

• Segregation of Duty breach‣ Mary can approve Purchase Orders‣ Fred can approve Invoices‣ Fred is not available, Mary gains access

Money Leaks

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• Only a random sample of A/P transactions are checked

• Postmortem exception identification‣ Not all fraud can be traced historically

• Extend operational cost

• Most SMBs cannot afford a staff of controllers

Controllers as A/P Watchdogs

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• 100% of A/P are under strict control

• SaaS Solution

• Stop money leaks:‣ Duplicate invoice (fuzzy invoice # matching)‣ Item price and quantity ‣ Ghost logistics invoice (Invoice without PO)‣ Ghost item (received part doesn’t match PO)‣ Frauds (vendor’s fraud, cybercrime, purchasing for personal gain,

etc.)

Accounts Payable Watchdog™

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• XML Adaptor‣ QXtend‣ Progress

• A/P Watchdog™ Service‣ Checks 100% of all Invoices‣ Finds exceptions

• Alert Resolution Manager (ARM)‣ Notifies controllers in real-time‣ Provides a UI for better root cause analysis

How Does It Work?ERP

DB XML Adaptor ARM

Controllers

A/P Watchdog™ Service DB

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• A/P Detective™ service ‣ Download the Progress script for your QAD environment ‣ Export 2 years of POs, 1 year of Vouchers & 6 month of Checks‣ Upload to Transaction Watchdog™ portal‣ Get A/P Detective™ Report summary

• A/P Data Analyzer service (optional)‣ Get a comprehensive report of all exceptions found in the A/P data‣ Get access to the ARM client to aid root cause analysis

• A/P Watchdog™ service‣ Install a real-time QXtend or Progress adaptor‣ Get immediate notification of any A/P data issues‣ Get access to the ARM client

Where do you start from?

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A/P Detective™ Sample

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A/P Detective™ Sample cont.

Freudenberg-NOK Confidential

IntroductionWho is Freudenberg-NOK?


Germany

Japan

USA

Global, diverse & established Partners



International Seal Co.O-Rings

SelastomerCustom Seals & Shapes

Acquired 1998

Tramco (Transtec)Aftermarket Products

Acquired 1991

Detroit GasketGasket Products

FarnamGasket Products Acquired 1999

MerkelFluid Power Products

Acquired 1996

Tri-DaytonPTFE Products Acquired 1995

Verco Seal CompanyFluid Power Products

Acquired 2000

High Quality ProductsPTFE Products

TranscomRadial Shaft Seals

Nu-Seals

Custom Molded Products Acquired 2002

Helix GloucesterLiquid Silicone Rubber

American Seal Inc.O-Rings

Acquired 2004

Helix MedicalMedical Products

Imperial RubberOil & Gas Products

Acquired 2006

Tetralene, Inc. / TetraleneElastomers

Oil & Gas Products

Petroleum Elastomers (PEI)Oil & Gas ProductsAcquired 2008

ANURA Plastics Engineering Corp.

Healthcare/MedicalAcquired 2008

Precision IndustriesRubber Diaphragms

Acquired 2007



Brazil Facilities São Paulo, Diadema

Mexico Facilities QueretaroLermaCuautla

Canada Facilities TillsonburgNiskuMarkham

China Facilities Shenzhen, China

USA Facilities:

Michigan (Plymouth - Headquarter)

California (Santa Ana, Carpinteria, Baldwin Park,

San Luis Obispo)

Colorado (Denver)

Georgia (LaGrange, Cleveland)

Indiana (Morristown, Shelbyville, Ligonier, Scottsburg)

Illinois (Elgin)

Iowa (Spencer)

Massachusetts (Gloucester)

Minnesota (Shakopee)

Nevada (Henderson)

New Hampshire (Ashland, Bristol, Franklin, Laconia, Manchester, Northfield)

Ohio (Milan, Findlay, Troy)

Texas (Houston)

Wisconsin (Necedah, Germantown)

Freudenberg-NOK - Locations

Introduction


Aerospace

Aftermarket

Agriculture/Construction

Appliance

Automotive

Chemical Processing

Diesel Engine

Healthcare/Medical

Industrial Equipment

Outdoor Power

Oil & Gas

Recreation

Semiconductor

IntroductionFreudenberg-NOK - Wide Range of Market Segment


O-RingsRadial Shaft Seals

Gaskets Vibration ControlSpecialty Sealing

Fluid Power Products

Custom silicone molding Stripe Tubing Thermoplastic Molding

IntroductionFreudenberg-NOK - Product Divisions


•American Axle

•Arvin / Meritor

•BMW

•Bosch

•Bobcat

•Caterpillar

•Chrysler

•Dana

•Delphi

•Ford

•General Motors

•Harley Davidson

•Honda

• ITT Automotive • John Deere• Mercedes• New Venture Gear• Nissan• Polaris• Siemens• Tenneco• Timken• Toyota• TRW• Visteon• Whirlpool

IntroductionFreudenberg-NOK - North American Customers



Production deployment18 QAD Instances


• 25 different sites• 25 QAD Enterprise Applications instances• Over 1,000 supplier invoices a day• Each site can use a unique invoice receiving process• Suppliers send invoices with exceptions

Production deploymentThe Challenge


• Makes our team’s life easier• Alerts any pricing discrepancies before invoice is

processed• Substantially reduces the risk of duplicate entries

including ERS (multiple lots)• Reveals overpayments• Allows to be proactive versus reactive• Cuts auditor’s cost

Production deploymentValue of Watchdog


• FNST has been using A/P Watchdog™ for more than a

year• More than 5,000 alerts up today• One alert alone saved us over $8,000 of over payment• No false positives have been found• FNST was able to customize the ARM Client

Production deploymentImprove the Bottom Line

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• Accounts Payable Watchdog was presented

• QAD runs business processes while Transaction Watchdog controls transactions across multiple processes.

• Saves resources and cuts operational cost

• Reveals any attempt of fraud or supplier’s error

• Retain control of On-Demand QAD deployments

Recap

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Questions?

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Contact• Randy Whitehair - [email protected]

• Vladimir Forfutdinov - [email protected]

protect your system from money leakssão paulo, diadema mexico facilities queretaro lerma cuautla...

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