Integrated Financial
Management System
ABS-CBN Middle East
Journal Entry And Reporting
Process Sign-Off
May 29-June 1, 2004
1
Agenda
Agenda 1
• Meeting Objectives
Agenda 2
• Key Design Assumptions
Agenda 3
• Process/Sub-processes Design:
• Master Data Maintenance
• Capture Financial Transactions
• Month-end/Year-end Closing
• Financial Reporting
Agenda 4
• Key Design Issues/Concerns
• Next Steps
Systems & Methods Department
FMS – Middle East Project
2
Meeting Objectives

To present and discuss the subsidiaries’ Journal Entry and Reporting
“To-Be” Processes

To identify additional activities/scenarios that needs to be addressed

To address design issues that may impact next stages of FMS
project implementation

To obtain process sign-off
Systems & Methods Department
FMS – Middle East Project
3
JER Process Overview

Move towards “soft” accounting close

Increase the dependence on Financial System to generate
accurate reports
Systems & Methods Department
FMS – Middle East Project
4
Overview of JER Process
Maintain
GL Master Data
(Chart of
Accounts)
Capture/Process
Financial
Transactions
(Daily Processing)
Month-end/
Year-end
Process
Financial
Reporting
OBJECTIVES:
•Ensure proper and consistent recording of financial
transactions.
•Provide timely and relevant reports showing financial
position of the subsidiary as well as addressing
statutory requirements.
Systems & Methods Department
FMS – Middle East Project
5
Journal Entry and Reporting
Process Objectives
JER Sub-Processes
JER 1.0 Master Data Maintenance
Objectives

To maintain single Chart of Accounts
To ensure consistent application and
treatment of GL accounts

JER 2.0 Capture Financial Transactions
To ensure proper capture of
transactions consistent with ABS-CBN
parent

To minimize # of manual journal
entries/adjustments

JER 3.0 Month-end/Year-end Closing
To reduce month-end activities and
spread-out GL processing throughout the
month


JER 4.0 Financial Reporting
Systems & Methods Department
To decrease manual processes
To simplify financial reporting and
decrease manual processes

FMS – Middle East Project
6
As – Is Business Processes
Systems & Methods Department
FMS – Middle East Project
7
JER As-is Process
KSA Peachtree
Jeddah
Dubai
Accounting Assistant
maintain GL account
in Peachtree
Forward back-up
to Dubai
Post vendor
invoice
Back-up
Peachtree
Post cost
of merchandise
KSA Peachtree
Jeddah Workstation
Post adjusting
entry
Post amortization
of deferred cost
of merchandise
KSA Peachtree
Dubai Workstation
Post monthend accrual
Accounting Asst
restore back-up
Systems & Methods Department
Post revenue
and collection
Post amortization
of deferred revenue
Post disbursement
& liquidation
KSA Peachtree
Jeddah Workstation
Accounting Asst
restore back-up
Forward back-up
to KSA
FMS – Middle East Project
Back-up
Peachtree
8
JER As-is Process
Dubai Peachtree and Consolidation Process
Dubai
Accounting Assistant or
Chief Accountant maintain
GL account in Peachtree
KSA Peachtree
Dubai Workstation
Post vendor
invoice
Dubai Peachtree
Post cost
of merchandise
Export financial
statement to
Excel file
Post disbursement
& liquidation
Convert currency
AED to Saudi Riyal
Post adjusting
entry
Convert currency
Saudi Riyal to USD
Generate
Financial package
Post monthend accrual
Systems & Methods Department
Export financial
statement to
excel file
FMS – Middle East Project
To Financial
Reporting
9
BUSINESS PROCESS GAP ANALYSIS
Systems & Methods Department
FMS – Middle East Project
10
Gap Analysis
Journal Entry and Reporting
Issues / Concern
Most of the accounting
entries for DMF transactions
are manually (excel)
computed as follows:




Risk / Impact

Subscription revenue
for the month
Amortization for
deferred revenue
Inventory on hand and
cost of merchandise
Amortization of
deferred cost of
merchandise
Systems & Methods Department
Manual computation
and excel
preparation is time
consuming and
susceptible to errors
Proposed Solution

Enhanced revenue and
inventory system that will
provide (to be addressed by
GES):
 Monitoring of earned and
unearned subscription fee
paid by subscriber
 Integrated system that
will update inventory
when sale is processed
FMS – Middle East Project
11
Gap Analysis
Journal Entry and Reporting
Issues / Concern


Separate books of accounts for
Dubai and KSA transaction
using Peachtree
 Dubai is dependent on KSA
month-end closing.
 Dubai waits for KSA
Peachtree back-up before
revenue, collection and
amortization of deferred
charges are posted
 Manual conversion of 2
different currencies (AED
and Saudi Riyal) to USD
Risk / Impact
Delay in submitting
the financial package
Use of different currency code
in Dubai and KSA Peachtree
Systems & Methods Department
FMS – Middle East Project
Proposed Solution

SAP will provide
centralized database
for Dubai and KSA
with proper
identification via plant
and sales office
maintenance

SAP will automatically
translate document
currency (e.g. billed in
AED, Saudi Riyal, etc)
into company code
currency through
foreign exchange rate
table regularly
maintained by ABSCBN Global
12
Gap Analysis
Journal Entry and Reporting
Issues / Concern
Risk / Impact
Peachtree modules are
not fully utilized
 Inventory
 Accounts Receivable
 Asset
 Procurement
 Job Cost
 Manual computation and
excel preparation is time
consuming and
susceptible to errors
Proposed Solution

SAP will address this deficiency through
implementation of recon account for the
following:

 Duplicate / multiple
maintenance of GL
accounts to identify
account by employee
(advances) or location
(revenue and expense)




Trade and non-trade receivables
Trade and non-trade payables
Due to/from subsidiaries and affiliates
Merchandise inventory
Fixed assets
Note that for recon accounts, SAP will
not allow direct posting to GL account
but to SL account. This ensures that
SL always tally with GL.

Systems & Methods Department
SAP will require cost center or internal order
for each revenue and expense account.
Duplicate / multiple GL accounts will be
prevented since maintenance is centralized
in ABS-CBN Financial reporting
FMS – Middle East Project
13
To - Be Business Processes
Systems & Methods Department
FMS – Middle East Project
14
Key Design Assumptions

Middle East Companies will use a single Chart of Accounts

Financial and Cost Accounting will be centralized with ABSCBN parent

Maintenance of G/L Master Data will be centralized at ABSCBN parent

Processing of financial transactions will be consistent with
ABS-CBN parent whenever applicable

All inter-company transactions including Airtime Revenue
will be booked and treated arms-length

Working ITS and GES

Payroll will be booked manually (processed via Peach Tree)
Systems & Methods Department
FMS – Middle East Project
15
JER – Master Data Maintenance
JER SUB-PROCESSES:
Master
Data
Maintenance
Capture
Financial
Transactions
Month-end/
Year-end
Closing
Financial
Reporting
KEY PERFORMANCE INDICATORS (KPIs):
• Turnaround time from update notification to activating change in GL master data
(including notification).
– To – be: 1 hour
Systems & Methods Department
FMS – Middle East Project
16
JER - Master Data Maintenance
ACTIVITIES:
Maintain GL
Master Data
Systems & Methods Department
Maintain
Primary &
Secondary
Cost Elements
FMS – Middle East Project
Maintain
Financial
Statement
Versions
17
JER – Master Data Maintenance
Design Highlights

Single Chart of Accounts for ABS-CBN parent,
broadcasting and International subsidiaries

Restriction of GL accounts per company code to the
accounts being used by ME

On-line GL Master Data Maintenance request and
approval
Systems & Methods Department
FMS – Middle East Project
18
JER - Master Data Maintenance
Design Highlights
New GL accounts are to be created for Middle East :

GL Accounts
Account Nature
Company
Bank Accounts:
To capture balances of bank accounts. A set of 4 GL
accounts are to be created for each bank account
maintained by the company. (Cash and Cash
Middle East,
FZ,LLC
-
Main Bank
-
Deposit Clearing
-
Payment Clearing
-
Suspense Clearing
Equivalents Category)
Systems & Methods Department
FMS – Middle East Project
Middle East,
LLC
19
JER - Maintain GL Accounts
Design Highlights
General Procedure :
Fill-out On-line
Request Form
Type of Requests :
- Add GL account
- Update GL account
- Block GL account
- Delete GL account
Review/Approve
Request
Approved ?
YES
Forward request to
Accounting Staff
Responsibility of
Finance Accounting
Staff - Manila
Responsibility of
Financial Reporting
Manager Manila
NO
To be handled by
Middle East Financial
Reporting Manager
Systems & Methods Department
Encode changes in
GL Master Data
Notify requestor of
disapproval
Reason/justification
for denial is
indicated indicated
FMS – Middle East Project
20
JER – Capture Financial Transactions
JER SUB-PROCESSES:
Master
Data
Maintenance
Capture
Financial
Transactions
Month-end/
Year-end
Closing
Financial
Reporting
KEY PERFORMANCE INDICATORS
# of manual of journal entries per month
# of manual repostings per month
Systems & Methods Department
FMS – Middle East Project
21
JER - Capture Financial Transactions
ACTIVITIES:
Create
Journal
Entries/
Adjustments
Systems & Methods Department
Upload
Journal Entries
from Legacy
Systems
FMS – Middle East Project
Integrate
with other
SAP
Modules/
Components
22
JER – Capture Financial Transactions
Design Highlights

Capture transactions at source

Sub-ledgers to be owned by unit who owns the transactions

Fewer transactions requiring controller’s approval

Use of text field to capture transaction details instead of
maintaining sub-ledgers

Minimize journal entries by interfacing from external systems, using
upload GL program for voluminous transactions, using SAP
templates, variants and recurring entries
Systems & Methods Department
FMS – Middle East Project
23
JER - Capture Financial Transactions
Design Highlights

Proper revenue-cost matching
Transaction Types
Cash Sale –
(Current Period
Only)
Revenue Recognition
Full amount
recognized upon
delivery/ fulfillment
Cost Recognition
Full cost recognized
upon delivery/
fulfillment
Examples
Subscription (Current
Month)


Ad Sales (PBB)

Print Ad

Equipment*
•Outright
Sale not Lease
EITF No. 00-21:
Recognized revenue and
cost upon transfer of
ownership.
Credit Sale
(Current Period
Only)
Full amount
recognized upon
delivery regardless
of payment plan

Systems & Methods Department
Full cost recognized
upon delivery /
fulfillment
FMS – Middle East Project
Subscription (Current
Month)


Ad Sales

Print Ad
24
JER - Capture Financial Transactions
Design Highlights

Proper revenue-cost matching :
Transaction
Types
Revenue Recognition
Cost Recognition
Deferred Sale
Amortized over the effective
date of the subscription
Miscellaneous/
Special events
Savings, if any, are recognized
upon project completion
Booked as expense
monthly (License Fees, Ad
Sales

If within client’s
budget, not applicable
Examples
Subscription
(Advance Payment)

Sponsored production
Cost

If beyond client’s
approved budget,
recognized upon
project completion.
Systems & Methods Department
FMS – Middle East Project
25
JER – Capture Financial Transactions
Create Journal Adjustments

General procedures for requesting manual journal adjustments will be the same as ABS-CBN
adjustment
parent (After Cut-off) :
Fill-out On-line
Request Form
Review/
Approve
Request
Required Information: Responsibility of
Finance Accounting
- Amount
- Dr and Cr Accounts Manager (ME)
- Purpose/rationale
Approve
Request
Requires 2nd
Level Approval?
NO
Forward request to
Accounting Staff
Encode changes in
GL Master Data
Responsibility of
Finance Accounting
Staff
ABS-CBN Parent
YES
Forward to Controller
Note:
- Request form will be obtained via Lotus Notes
- "Parking" facility in SAP will not be used in approval
process
- Acctg. staff will indicate SAP doc number in request
form
- All request forms will be kept on file for reference
- Any A/R & A/P requests for adjustments will be
forwarded to A/R & A/P staff for booking
Systems & Methods Department
YES
Approved ?
NO
Transactions requiring 2nd
Level Approval:
- Major Accruals
- Write-offs
- Consolidation Entries
- Income tax related entries
- Adjustments resulting
from reconciliation and
analysis
FMS – Middle East Project
Notify requestor of
disapproval
Reason/justification
for denial must be
indicated
26
JER – Capture Financial Transactions
Create Journal Adjustments
•
Key transactions to be captured thru journal entries :
G/L Accounts
A. Profit and Loss Accounts
Operating Expenses :
Salaries and Employee Benefits
(Accrual of bonuses will be through recurring entries)
Miscellaneous Expense:
Donations and Contributions
Other Income and Expenses :
Sponsored production cost
B. Balance Sheet Accounts
Current Assets :
Prepaid Expenses : (Insurance, Interest, Taxes and Licenses, Rent)
Other Current Assets
(Use of GL account others will be restricted to G/L group. G/L will ensure that it will have zero balance at period end. It will only be
used as a suspense account if needed.)
Long-Term Investments :
Investments in Shares of Stock – at Equity
Allowance for Decline in Value of Shares of Stock – at Equity
Other Assets and Deferred Charges (Goodwill, Trademarks and Copyrights)
Stockholders’ Equity (Issued CS, Subscribed Common Stock, Subscription Receivable)
Systems & Methods Department
FMS – Middle East Project
27
JER – Capture Financial Transactions
Upload Journal Entries
•
Main interfaces to SAP are as follows :
Legacy Systems
Interface
Frequency
To-be Captured Transactions
Integrated Traffic System (ITS)
Daily
-
Airtime Revenue
-
Agency Commission, Early Payment and
Sales Discounts, if any
Revenue is recognized upon airing regardless if
billed or not, as provided by ITS.
GES
Monthly
- Equipment Sale
Include payroll as upload
- Installation Service Revenue
-
Subscription Fees
-
Early Payment Discount, Sales Discount and
Sales Returns and Allowances
Systems & Methods Department
FMS – Middle East Project
28
JER – Capture Financial Transactions
Integration
•
•
Apart from manual journal entries and automated interfaces, most of the financial
transactions will be automatically posted by the other SAP Modules and FI Module
Components:
Account Categories
Applicable sample Transactions
Revenue
-
Post-production (ad production)
-
Special Events
-
Miscellaneous Revenue
-
Direct Materials
-
Cost of Merchandise
-
License Fees and Royalty Expense
-
Commissions and Incentives
-
Freight and Delivery Cost
-
Installation Cost
Production Costs
-
Set Requirements
Accounts Payable or
- Transactions under this category are booked
as incurred by Accounts Payable
-
Equipment, Facilities and Manpower Charges
Materials Management
-
Transportation and Travel
-
Rent and Utilities, Communications Expense, Supplies Expense
-
Printing and Reproduction Expenses
-
Representation and Entertainment
-
Service Fees
-
Other Program Expenses
Cost of Sales and Services
Systems & Methods Department
FMS – Middle East Project
Source
Accounts Receivable
Materials Management or
Accounts Payable
29
JER – Capture Financial Transactions
Integration
(continued):
Account Categories
Transactions
Source
General and Administrative Expenses
-
Depreciation (Various Fixed Assets)
Fixed Assets
-Under
-
Amortization of Pre-operating Expenses
Accounts Payable
-
Normal Operating Expense (Rent, Utilities, Supplies, Insurance,etc)
-
Printing and Reproduction Expense
-
Dues and Subscriptions
-
Advertising and Promotions
-
Representation and Entertainment
-
Training, Seminars, Workshops & Conferences
-
Transportation and Travel
-
Legal and Professional Fees
-
Research and Survey Expense
-
Freight and Delivery Expenses
-
Service Fees
-
Taxes, Licenses and Fees
-
Provision for Doubtful Accounts
Accounts Receivable
-
Interest Income
Finance – Bank
-
Miscellaneous Income
Accounts Receivable
-
Recovery from Accounts Written Off
-
Interest Expense
-
Bank and Other Service Charge
Fixed Assets, depreciation
expense are automatically computed
through depreciation runs and are
likewise automatically posted to the
General Ledger;
Most of the transactions captured
through Accounts Payable are already
set-up as recurring entries that are
automatically booked monthly
-
Other Income and Expenses
Systems & Methods Department
FMS – Middle East Project
Finance – Bank
30
JER – Capture Financial Transactions
Integration
(continued):
Account Categories
Transactions
Source
-
Cash on Hand
Accounts Receivable
-
Petty Cash Fund
Accounts Payable
Bank reconciliation will be automatic (as
applicable) while adjustments will be processed by
GL
-
Bank Accounts
Finance - Bank
Accounts Receivable
-
Accounts Receivable - Trade
Accounts Receivable
-
Allowance for Doubtful Accounts – Trade
Advances to Officers and Employees
-
Advances Against Salaries
Payroll will maintain employee subsidiary ledgers
that will track advances against salaries and
deductions;
-
Advances Subject to Liquidation
-
Materials and Supplies Inventory
Cash and Cash Equivalents
- Revolving Fund SL will not be maintained.
Instead, employees will be set up as vendor to
track petty cash fund usage;
-
-
Accounts Receivable
-
Advances Subject to Liquidation SL will not be
maintained. Instead, employees will be set up as
Vendors in A/P
Materials and Supplies Inventory
Systems & Methods Department
FMS – Middle East Project
Materials Management
31
JER – Capture Financial Transactions
Integration
(continued):
Account Categories
Due to/from
Transactions
Source
-
Due to/from Parent
-
Due to/from Affiliated Companies
-
Inter-Company Clearing
Accounts Payable / Accounts
Receivable
Property and Equipment
(Various accounts)
Fixed Assets
Accumulated Depreciation
(Various accounts)
Fixed Assets
A separate account is set-up for each
Property and Equipment except Land
-
Accounts Payable
Accounts Payable
-
Accounts Payable - Trade
Accounts Payable – Sales Commissions
Accounts Payable – Non-Trade
Accrued Expenses
-
Accrued Salaries and Wages
Accounts Payable
(Details to be discussed in MonthEnd/Year-end Closing)
-
Accrued Bonuses and Allowances
-
Accrued Sales Commissions
-
Accrued Rent
-
Accrued Other Expenses
-
Systems & Methods Department
FMS – Middle East Project
32
JER - Month – End/ Year – End Closing
JER SUB-PROCESSES:
Master
Data
Maintenance
Capture
Financial
Transactions
Month-end/
Year-end
Closing
Financial
Reporting
KEY PERFORMANCE INDICATORS (KPIs):
• Turnaround time required for closing the books. (Closing does not include
consolidation of parent and subsidiary financial statements,)
- To – be: 5 days after month end
Systems & Methods Department
FMS – Middle East Project
33
JER - Month-end/Year-end Closing
Accrual/
Deferral of
Revenue/
Expenses
Reconciliation
of GL and SL
balances
Review of
Clearing
Accounts
Applicable to yearend closing only
Generate
Trial
Balance/
Schedules
Consolidate
and Generate
Consolidated
Financial
Statements
Open/Close
Posting
Period
CarryForward
Balances
Applicable to ABS-CBN
Financial Reporting sub-process
Systems & Methods Department
FMS – Middle East Project
34
JER - Month-end/Year-end Closing
Design Highlights

Remove as part of the process the reconciliation of GL and SL balances of A/R, A/P,
Fixed Assets

Remove as part of the process the reconciliation of Due to/Due from Accounts for
company codes in SAP

Spread-out processing of transactions:

Amortization of prepayments for Insurance, Rent will be set-up up-front by
Accounts Payable via recurring entries.

Accruals/deferrals that are based on budget need not be done at month-end

Centralized control for opening/closing posting periods.

Auto-reversal of accruals/deferrals to avoid double charging (Optional)
Systems & Methods Department
FMS – Middle East Project
35
JER – Month End/ Year End Closing
Accrual/Deferral
Accrual/
Deferral of
Revenue/
Expenses
Reconciliation
of GL and SL
balances
Review of
Clearing
Accounts
Applicable to yearend closing only
Generate
Trial
Balance/
Schedules
Consolidate
and Generate
Consolidated
Financial
Statements
Open/Close
Posting
Period
CarryForward
Balances
Applicable to ABS-CBN
Financial Reporting sub-process
Systems & Methods Department
FMS – Middle East Project
36
JER – Month End/ Year End Closing
Accrual/Deferral
ACCRUALS:
Monthly accruals will be performed for the following items :
Transaction
Operating Expenses
Rent
Comment
Accrual will be done manually by A/P and will be
based on actual expenditures incurred (if known)
or prior period expenditures.
Accrual will be done by A/P via recurring entries
and will be based on contract.
Employee Bonuses
Accrual will be done manually by Financial
Accounting based on budget.
Employee Leave
Benefits
Accrual will be done manually by Financial
Accounting at year-end.
Production expense
For those programs that have already been aired
and not yet liquidated, advances will be manually
accrued by A/P.
Systems & Methods Department
FMS – Middle East Project
37
JER – Month End/ Year End Closing
Accrual/Deferral
ACCRUALS (continued):
Accruals are no longer needed for the following items:
Transaction
Airtime Revenue
Merchandising
Revenue
Comment
Captured daily via interface with Integrated Traffic
System. This will include both billed and unbilled
programs so long as aired.
Captured daily via interface with GES
Systems & Methods Department
FMS – Middle East Project
38
JER – Month End/ Year End Closing
Accrual/Deferral
DEFERRALS:
Transaction
Subscription
advance payment
Prepayment
Amortization
Comment
This refers to monthly revenue for the month recognized from
the advance payment.
Only amortization of prepaid interest will be handled by
Financial Accounting.
Amortization of prepayments for insurance, licenses, royalties
and rent will be set-up up-front by A/P via recurring entries.
When financial accounting executes recurring entries at
month-end, the recurring entries set-up by A/P will also be
included in the processing.
Systems & Methods Department
FMS – Middle East Project
39
JER – Month End/ Year End Closing
Reconciliation of GL & SL
Accrual/
Deferral of
Revenue/
Expenses
Reconciliation
of GL and SL
balances
Review of
Clearing
Accounts
Applicable to yearend closing only
Generate
Trial
Balance/
Schedules
Consolidate
and Generate
Consolidated
Financial
Statements
Open/Close
Posting
Period
CarryForward
Balances
Applicable to ABS-CBN
Financial Reporting sub-process
Systems & Methods Department
FMS – Middle East Project
40
JER – Month End/ Year End Closing
Reconciliation of GL & SL
Reconciliation will have to be done for the following accounts:
Transaction
Bank Reconciliation
Due To / Due From
Advances against
salaries
Comment
This will still require reconciliation with the
balances per bank. Bank reconciliation will be
performed by Financial Accounting.
Reconciliation is required if direct cross-company
posting is not allowed for all transactions within
the ABS-CBN group.
For monitoring by Payroll Staff
Provide vendor
and eliminate recon
Systems & Methods Department
FMS – Middle East Project
41
JER – Month End/ Year End Closing
Review of Clearing Accounts
Accrual/
Deferral of
Revenue/
Expenses
Reconciliation
of GL and SL
balances
Review of
Clearing
Accounts
Applicable to yearend closing only
Generate
Trial
Balance/
Schedules
Consolidate
and Generate
Consolidated
Financial
Statements
Open/Close
Posting
Period
CarryForward
Balances
Applicable to ABS-CBN
Financial Reporting sub-process
Systems & Methods Department
FMS – Middle East Project
42
JER – Month End/ Year End Closing
Review of Clearing Accounts
The following clearing accounts will have to be set-up in the system and
have to be reviewed at month-end to ensure that the account has a zero
balance.
GL Account
GR/IR Clearing Account
Bank Reconciliation Clearing
Accounts
· Bank – Deposit Clearing
· Bank Clearing - Payment
Clearing
· Bank – Suspense Clearing
Inter-Company Clearing Account
Systems & Methods Department
Comment
Used as clearing account when goods are
received and when goods are invoiced. This
should zero out when goods have been
received and invoiced in SAP.
These reconciliation accounts are set-up for
each bank account subject to reconciliation.
Inter-Company transactions will be initially
posted to this account and closed to the Due
to/Due from accounts upon reconciliation.
FMS – Middle East Project
43
JER – Month End/ Year End Closing
Generate Trial Balance/Schedules
Accrual/
Deferral of
Revenue/
Expenses
Reconciliation
of GL and SL
balances
Review of
Clearing
Accounts
Applicable to yearend closing only
Generate
Trial
Balance/
Schedules
Consolidate
and Generate
Consolidated
Financial
Statements
Open/Close
Posting
Period
CarryForward
Balances
Applicable to ABS-CBN
Financial Reporting sub-process
Systems & Methods Department
FMS – Middle East Project
44
JER – Month End/ Year End Closing
Generate Trial Balance/Schedules
The following reports will be generated to facilitate review of
interim Financial Statements:
· Trial balance
· Expense Schedules
Use standard BS/PL report
Use standard SAP
Users will process the adjustment in GL, A/R or A/P of the
concerned period.
Systems & Methods Department
FMS – Middle East Project
45
JER – Month End/ Year End Closing
Consolidation
Accrual/
Deferral of
Revenue/
Expenses
Reconciliation
of GL and SL
balances
Review of
Clearing
Accounts
Applicable to yearend closing only
Generate
Trial
Balance/
Schedules
Consolidate
and Generate
Consolidated
Financial
Statements
Open/Close
Posting
Period
CarryForward
Balances
Applicable to ABS-CBN
Financial Reporting sub-process
Systems & Methods Department
FMS – Middle East Project
46
JER – Month End/ Year End Closing
Open/Close Posting Period
Accrual/
Deferral of
Revenue/
Expenses
Generate
Trial
Balance/
Schedules
Reconciliation
of GL and SL
balances
Review of
Clearing
Accounts
Applicable to ABS-CBN
Applicable to yearend closing only
Open/Close
Posting
Period
CarryForward
Balances
Consolidate
and Generate
Consolidated
Financial
Statements
Applicable to ABS-CBN
Financial Reporting sub-process
Systems & Methods Department
FMS – Middle East Project
47
JER – Month End/ Year End Closing
Open/Close Posting Period
• Financial Accounting unit in ABS-CBN Parent will control closing period in
SAP: General Ledger, Customer Ledger, Vendor Ledger, Inventory Ledger
and Asset
• Calendar year will be maintained as the GL posting periods
Posting Period
1-12
13
14
Description
These posting periods correspond to the calendar month. These will
capture the regular monthly transactions.
This posting period will be used to capture adjustments resulting from
investments in subsidiaries.
This posting period will be used to capture External Auditor
adjustments.
Policy on closing of period - All modules will be closed by end of day
of the second working day of the new month. Only one period will be
kept open at any time; however during the period closing, the GL
module will be kept open until the 5th working day of the new month
(target closing period). Re-opening of closed period shall be subject to
approval of ABS-CBN CFO.
Systems & Methods Department
FMS – Middle East Project
48
JER – Month End/ Year End Closing
Carry-Forward Balances
Accrual/
Deferral of
Revenue/
Expenses
Reconciliation
of GL and SL
balances
Review of
Clearing
Accounts
Applicable to year-end
closing only.
Performed in Manila
Generate
Trial
Balance/
Schedules
Consolidate
and Generate
Consolidated
Financial
Statements
Open/Close
Posting
Period
CarryForward
Balances
Applicable to ABS-CBN
Financial Reporting sub-process
Systems & Methods Department
FMS – Middle East Project
49
JER – Financial Reporting
JER SUB-PROCESSES:
Master
Data
Maintenance
Capture
Financial
Transactions
Month-end/
Year-end
Closing
Financial
Reporting
KEY PERFORMANCE INDICATORS (KPIs):
• Accuracy of month-end reports
• Reduction in number of ad-hoc requests for management reports
Systems & Methods Department
FMS – Middle East Project
50
JER – Financial Reporting
Generate
Financial
Statements
The following basic financial reports will be generated for each company
under the ABS-CBN group of companies:
• Balance Sheet
• Income Statement
• Cash Flow
• Details of Receivables and Payables
• Details of Due to/from Subsidiaries
• Details of Due to/from Affiliates
Systems & Methods Department
FMS – Middle East Project
51
JER – Financial Reporting
Other SAP generated reports:
• Aging of Accounts Receivable
• Property and Equipment
• Accumulated Depreciation
• Depreciation and Amortization Schedules
Customized Financial Package (IS, BS, CF) for SDD
• Transactions referring to Sales on Direct To Home (Subscription
Fees, Equipment, Maintenance)
Systems & Methods Department
FMS – Middle East Project
52