Client: Global Mobile Device Manufacturer

Client Situation

The AddVantage Group was engaged to assist a global mobile device manufacturer in the transformation of their Export and Cross Border Accounting process.  The company’s functions in this area were inefficient, overstaffed and there existed substantial balances with inadequate support on the balance sheet.

• Material unresolved balance sheet reconciling items existed on the company’s GL for the function’s intercompany receivable, payable, accrual, goods received/not invoiced and goods-in-transit accounts between geographic regions
• 5MM+ in invoices to third party and intercompany vendors were not being paid timely on an ongoing basis
• Accrual balances for regions were aged > 1 year and were not substantiated by backup
• Staff lacked understanding of end-to-end process
• Close and reconciliation deadlines were not being met
• Cost of service was significantly higher than benchmark average

Our Approach

• Clarified pricing update timeline and responsibilities across finance teams worldwide
• Optimized / re-designed the pricing update and costing run processes
• Identified all potential pain points related to vendor vs customer prices throughout the process with steps to resolve
• Worked with region finance teams to implement auto-reversing journal entries for 100% of accruals, with adequate backup summary and detail in a standard template format
• Worked with region finance leadership to identify and clear aged balance and unmatched intercompany balance components
• Worked with Source-To-Pay and Business Performance Enhancement functions to resolve pricing issues preventing invoice payments
• Developed step-by-step process documentation to be used by anyone in the role going forward
• Led transition to third party service provider to take over function responsibilities

Outcomes

• Reduced time to update both pricing and costing
• Increased accuracy; price variances over the allowable threshold easily identified
• 5MM+ in invoice payments resolved and process in place to enable timely payment going forward
• Intercompany AR/AP aged balance reduced by 90%
• At-a-glance summary of update status available at all phases of the process
• 70% reduction in cost of service