Are my financials accurate?

Six do-it-yourself steps to your answer.

Vicki is a successful purpose driven business executive like you. Like you, she relies on her team to implement her vision. Vicki delegates. Vicki also hears the complaints, excuses and rationalizations that her employees and vendors lay on her. Sometimes she wonders.

Below are 6 easy ways to boost your confidence in your financial statements and determine how well your team is using Epicor Kinetic. They are:

Inventory
WIP
Purchase Orders
A/R (Receivables)
A/P (Payables)
Ship Not Invoiced

You probably won't need us for this. We've attached a video to walk you through the first two mini audits. If you don't like what you see, don't panic. You'll be provided with the common items that cause any mismatch. All issues can be fixed! Minor changes to your team's processes are probably all that is required.

Inventory VS Balance Sheet DIY Audit

Detail inventory valuation at moment in time is available in the "Stock Status" report. Take any Balance Sheet and highlight Inventory value and the period ending date. Then run the out-of-the-box, standard Epicor Kinetic Stock Status report. (OOB for short) On the last page find your "Net Value". This should match your Inventory number on your Balance Sheet. Five causes of a mismatch include 1) Journal Entries 2) Unposted Transactions 3) Incorrectly coding invoices to Inventory instead of the Clearing Account 4) Conversion errors 5) Incorrect G/L Control Codes on parts.

Video - Step by Step Kinetic Inventory Valuation v Balance Sheet

Obtain access to Epicor/Kinetic if you don't already have it.
Use your balance sheet from a recent period.
In the menu, choose Material Management > Inventory Management > Reports > Stock Status
Enter your financial PE date as the "Stock Status of " field.
Check Purchased Parts; Manufactured Parts; Include Non-Stock Items; Exclude Parts with Zero Quantities; Include Non-Nettable Quantities and leave all other boxes unchecked.
Select Report Style Standard - SSRS. (Do not use a custom report!)
Click Print Preview. The report will show on your screen.
On the last page of the report is your Net Value as of the financial date. The Stock Status Net Value should match your Balance Sheet Inventory exactly. There should be no negative value listed, but that is a different topic.

Pronto Progress will assist you with expertise and help you refine and shape your processes to maximize the utility of the Epicor® Kinetic ERP and minimize labor, error and redundancy. Robust integrated business solutions await you. Our promise is "Done once, done right" on solutions are efficient, scalable, secure and sustainable.

Work in Process VS Balance Sheet DIY Audit

Does your WIP match your financial statements? WIP DIY self-audit CANNOT be done for any period. The WIP audit works only on your lastest balance sheet. The WIP audit is best done as close as possible to the date of your balance sheet, because work continues in the shop. The WIP number will not exactly match. A large variance will be caused by 1) Not running the Capture COS/WIP 2) Journal Entries 3) Timing of report to Balance Sheet 4) Unposted Transactions

Video - Step by Step Kinetic WIP v Balance Sheet

Obtain access to Epicor/Kinetic if you don't already have it.
Use your balance sheet from your most recent period.
In the menu, choose Production Management > Reports > Work in Process
Under date range select 'Transaction Apply Date'.
Start is the beginning of your financial year.
End is the date of your Balance Sheet.
Under Account Level Detail select 'Summarized by Date/Tran Type'.
Select the page/magnifier and submit the report for viewing.
The report will be several pages. You'll want to go to the last page where you'll see 5 buckets. Material, Labor, Burden, Sub Contract and Material Burden. Tie these 5 buckets out to your Balance Sheet. You may need to combine items to match how you designed your balance sheet. Your Balance Sheet can be easily investigated and modified.

This should help you refine and shape your processes and maximize the utility of the Epicor® Kinetic ERP. Feel free to contact us with any questions, issues and comments.

Open Purchase Orders DIY Audit

The only problem would be if items being received are not received against the PO or the PO was cancelled however not recorded as cancelled in your system.

Obtain access to Epicor/Kinetic if you don't already have it.
In the menu, choose Material Management > Purchase Management > Reports > Open Purchase Orders.
Enter your fiscal year start date in From. (Use an earlier date if you fear you have stale purchase order.)
Enter your today in To.
Leave the defaults for the remaining fields.
Click Print Preview. The report will show on your screen.
On the last page of the report is your Report Totals. Your reviewing these open purchase orders to determine if you have stale, or potentially undesirable obligations still open.

Poor procedures at the receiving dock and inconsistent processes during purchasing are easily fixed. Journal Entries are not appropriate and indicate your processes are leaky. Purchase direct to a job followed by expediting the material to another job is another poor practice.

A/R (Receivables) VS Balance Sheet DIY Audit

Does your A/R match your financial statements? THEY BETTER! Otherwise you are leaking cash. A/R DIY self-audit can be done for any period, because we will be using the Aged Receivables Report. The audit works on any balance sheet. A variance will be caused by 1) Conversion Errors 2) Journal Entries 3) Unposted Transactions 4) Improper cash application 5) Not using 'Earliest Apply Date' to avoid past financial(s) recasting

Obtain access to Epicor/Kinetic if you don't already have it.
Use a Balance Sheet from any period. Preferably use a Balance Sheet that is a few months old and NOT freshly printed.
In the menu, choose Financial Management > Accounts Receivable > Reports > Aged Receivables
Enter the Balance Sheet date in 'Aged As Of'.
Insure you are running the Standard - SSRS Report Style.
Select the Print Preview button and submit the report for viewing.
The report may be several pages. You'll want to go to the last page where you'll see Report Total which should match your Balance Sheet exactly.

A common oversight is not using the Earliest Apply Date and then posting transactions which pre-date your Balance Sheet. In effect, this oversight is causing your financials to be recast. Possibly they are being recast without your knowledge or detection. Along with Journal Entries, this is a serious matter for any business owner.

A/P (Payables) v Balance Sheet DIY Audit

Auditing A/P follows the same pattern as A/R. We advise you to use an older published Balance Sheet since this will reveal if your folks are properly using the Earliest Apply Date. Improper use causes your financials to be recast without your knowledge. This is especially true for taxes, interest on taxes and non-deductible fines. Five causes of a mismatch include 1) Journal Entries 2) Unposted Transactions 3) Making miscellaneous payments instead of tracking to an established supplier. 4) Incorrect G/L Control Codes on Purchases 5) Improper use of the Earliest Apply Date

Obtain access to Epicor/Kinetic if you don't already have it.
Use a Balance Sheet from a previously published period rather than a newly created Balance Sheet.
In the menu, choose Financial Management > Account Payable > Reports > Aged Payables.
Enter the date of your Balance Sheet 'Aged Payables From'.
Select Standard - SSRS for Report Style
Leave the defaults for the remaining fields.
Click Print Preview. The report will show on your screen.
On the last page of the report is your Report Totals which should match your Balance Sheet exactly.

If you receive an error on the report, this means there are no A/P invoices as of your aging date. Probably your staff is not entering invoices when received, rather they are probably entering them on the same date they are paid and holding invoices until they are due. This is not the most effective use of your ERP.

Shipped Not Invoiced DIY Audit

The title says it all. In a perfect world your customer shipments should be invoiced at most the day after the shipment occurs and you should not see anything on this report that is more than 1 day old. There should be little, if any delay between shipping and invoicing. A variance will be caused by 1) A Customer Shipment was created with no lines on it. This should get deleted or at the very least have the Shipped flag unchecked. 2) Customer Invoice has not yet been created.

Obtain access to Epicor/Kinetic if you don't already have it.
In the menu, choose Financial Management > Accounts Receivable > Reports > Shipped Not Invoiced
Leave the From and To dates as they default.
Insure you are running the Standard - SSRS Report Style.
Select the Print Preview button and submit the report for viewing.
Verify that there is nothing on the report with a Ship Date before yesterday

We have developed logic directives which work in most later versions of Epicor and work both in the cloud and on premise. These will automatically invoice shipments moments after the order line is marked shipped.