SAP Business Process: Sales & Customer Service

Risk
Ref # Process Sub Process Process Objective Control
(Prior to establishing control)

Data may be entered incorrectly, resulting Pricing database has been created to provide
Sales Sales & Marketing Pricing information is accurate. in delays or errors in sales order customer service with price information
information. developed and approved by management.

Data may be entered incorrectly, resulting Standard price forms are used internally to
Sales Sales & Marketing Pricing information is accurate. in delays or errors in sales order provide relevant information about prices,
information. rebates, and payment conditions.

Data may be entered incorrectly, resulting Standard forms are used internally to capture
Sales Sales & Marketing Pricing information is accurate. in delays or errors in sales order relevant information regarding rebates and
information. payment conditions.

Written confirmation of commercial and

Data may be entered incorrectly, resulting financial contract conditions, whether by
Sales Sales & Marketing Pricing information is accurate. in delays or errors in sales order specific notification or communicated
information. through invoice terms and conditions, is sent
to the customer.

Pricing set up/adjustments, instructions for

Data may be entered incorrectly, resulting rebates and cash discount conditions
Sales Sales & Marketing Pricing information is accurate. in delays or errors in sales order decided by local sales/account managers are
information. supported by written evidence or
authorization from a higher level.

Agency contracts with third parties or other

Huntsman entities exist and are reviewed
Sales Sales & Marketing Supply Agreements Locked into an unfavorable agreement.
and approved by legal before
implementation.

Contracts with outside customers/suppliers

or other Huntsman entities exist and are
either uniquely drafted and reviewed by legal
Sales Sales & Marketing Supply Agreements Locked into an unfavorable agreement.
before execution or a pre-approved master
legal contract form is utilized for the
arrangements.

Sales margins are not regularly reviewed by

Management reviews sales margins on a
Sales Sales & Marketing Sales margins are reasonable. management for reasonableness and
regular basis.
accuracy.

Data may be entered incorrectly, resulting Data integrity and completeness is ensured
Sales Order Entry Sales data is complete. in delays or errors in sales order by utilizing consistent forms with
information. sequentially assigned order numbers.

Financial information contained within

Data may be entered incorrectly, resulting
customer master file cannot be
Sales Order Entry Sales data is complete. in delays or errors in sales order
changed/overridden by employees entering
information.
order information.

1
SAP Business Process: Sales & Customer Service
Risk
Ref # Process Sub Process Process Objective Control
(Prior to establishing control)

Customer terms and credit information

Data may be entered incorrectly, resulting
contained within customer master file cannot
Sales Order Entry Sales data is complete. in delays or errors in sales order
be changed/overridden by employees
information.
through the order entry function.

Proper credit review and authorization is

Sales Order Entry Credit Review Customer's ability to pay. required from credit organization. Order
acceptance is adequately authorized.

Customer credit limits have been

appropriately established. Blocking facility
Sales Order Entry Credit Review Customer's ability to pay.
exists before accepting new orders above
customer's credit limit.

Delivery block is placed on orders for

Sales Order Entry Credit Review Customer's ability to pay.
overdue customers.

Sales or Delivery block is placed on orders

from customers that are considered a 'high
Sales Order Entry Credit Review Customer's ability to pay. risk' and have an overdue balance. Credit
notification occurs for 'medium' or 'low' risk
customers with an overdue balance.

Free of Charge sales orders are not subject

to management review and approval. Appropriate order types have been
Sales Order Entry Free of charge' Sale order
Customers may be inappropriately supplied configured for free of charge orders.
with goods or services free of charge.

Customer Service/Sales representative has

Sales Order Entry Inventory availability / Production plan Stock outs, inability to fill customer order read only access to inventory management
system.

Adequately trained customer service

representatives are familiar with necessary
Improper documentation may violate local
Issue Shipping/Delivery documentation and statutory requirements.
Sales Order Entry statutory requirements. Potential fines.
Notification/Bill of Lading Adequate checklist has been established to
prompt customer service to follow document
requirements.

Customer returns may be not be recorded

accurately or completely. The balance of Proper authorization is required to resolve
Sales Order Entry Product Returns / Claims
inventory and sales may be misstated in the customer claims.
financial statements.

Return order types are configured and are

Customer returns may be not be recorded
accurately or completely. The balance of
Sales Order Entry Product Returns / Claims
inventory and sales may be misstated in the
financial statements.
associated with appropriate goods
movement types and sales order. The
inventory system is reviewed to ensure that
goods have been returned and inspected
before credit is granted.

2
SAP Business Process: Sales & Customer Service
Risk
Ref # Process Sub Process Process Objective Control
(Prior to establishing control)

Reconciliation of ledgers and sub ledgers is

Maintenance of Customer balance, Loss of revenue from unbilled shipments. performed to ensure that all inventory
Sales Order Entry Accounts Receivable, and Inventory Under/Overstatement of inventory and shipped was properly invoiced and recorded.
records. accounts receivable balances. Open orders are appropriate monitored.

Maintenance of Customer balance, Loss of revenue from unbilled shipments.

Open orders and missed shipments are
Sales Order Entry Accounts Receivable, and Inventory Under/Overstatement of inventory and
appropriately monitored.
records. accounts receivable balances.

Authorization to establish/change payment

Pricing, Rebates &
terms is appropriately restricted.
Sales Commission Master Payment terms Negative impact on working capital
Management review and approval of change
File
is required.

Access to customer master file is restricted

to authorized individuals. Sufficient audit trail
Pricing, Rebates & Customer credit limits or banking
of changes to database is maintained.
Sales Commission Master Maintenance of Customer Master File information could be changed or
Review of exception reports showing any
File compromised.
deviation from the master file profile is
performed.

Pricing, Rebates & Authorization lists for additions / updates /

Loss of revenue due to unauthorized price
Sales Commission Master Maintenance of Pricing Database exceptions to pricing database. Access to
changes
File pricing tables is appropriately restricted.

Reconciliation of customer accounts to

customer shipments are performed. Sales
Failure to invoice customer for all
order information is reconciled with invoices.
Invoicing for single order or monthly shipments that occurred in the month.
Sales Invoicing Billing document types are configured to
billing Potential loss of revenue from: inaccurate
automatically generate and post the
billing, exchange rate conversion
associated accounting document.
Sequentially numb

Credit notes are issued to support customer

rebates. The authority to release these notes
Credit notes are properly prepared and Credit notes may not be properly prepared,
Sales Invoicing is appropriately assigned within the
authorized. authorized, and/or issued.
organization. Administrative controls are in
place to monitor credit notes issued.

Regular physical inventory occurs of

distributor if inventory is housed at
Balance of inventory and sales may be
Sales Invoicing Distributors distributor location. Monthly reconciliation of
misstated in the financial statements.
inventory balance with Distributor's records
is performed.

3
SAP Business Process: Sales & Customer Service
Risk
Ref # Process Sub Process Process Objective Control
(Prior to establishing control)

Balance of inventory and sales may be Monthly reconciliation of inventory balance

Sales Invoicing Distributors
misstated in the financial statements. with Distributor's records is performed.

Ensure regular physical inventory occurs at

Balance of inventory and sales may be customer's location. Monthly reconciliation
Sales Invoicing Consignment Sales
misstated in the financial statements. of inventory balance with location records is
performed.

Monthly reconciliation of inventory balance

Balance of inventory and sales may be
Sales Invoicing Consignment Sales with location records is performed.
misstated in the financial statements.

Balance of inventory and sales may be Customers are invoiced on a regular basis
Sales Invoicing Consignment Sales
misstated in the financial statements. (daily, monthly) for product consumed.

Partial deliveries are not appropriately
monitored; resulting invoices may be based
Partial deliveries are appropriately on the full delivery rather than the quantity
Sales Invoicing
monitored and controlled. actually delivered. The remaining portion of
the delivery is not completed on a timely
basis and/or invoiced accurately.
Management reviews all outstanding partial
deliveries via standard reports which enable
management to determine whether partial
deliveries are invoiced correctly and the
balance of the delivery is completed and
invoiced.

Adequate segregation of duties may
Segregation of not exist between the maintenance of
Sales
Duties customer master files and the
issuance of credit notes / rebates.
Employees may be able to inappropriately Adequate segregation of duties exists
change customer master files and issue between day-to-day order processing and
customer rebates / credits without proper pricing, rebates/credit notes and commission
authorization. master file maintenance.

Order entry personnel may override credit

Maintain separate job responsibilities
limits established by the finance Responsibility to perform order entry and the
Segregation of among employees to reduce the
Sales organization which would result in selling ability to add/update credit limits is
Duties opportunity of defalcations or override
to customers that have a higher risk of performed by separate individuals.
management objectives.
defaulting on payment.

Maintain separate job responsibilities
Segregation of among employees to reduce the
Sales
Duties opportunity of defalcations or override
management objectives.
Personnel that have the ability to set-up a
Responsibility to perform the setup of
rebate and authorize the payment of
rebates and authorize payment of rebates is
rebates may misallocate corporate
performed by separate individuals.
resources.

Maintain separate job responsibilities

Personnel that have the ability to maintain Responsibility to maintain customer master
Segregation of among employees to reduce the
Sales the customer master file and issue credit file and issuing credit notes is performed by
Duties opportunity of defalcations or override
notes may misallocate corporate resources. separate individuals.
management objectives.

Specific criteria is met before a product

movement is classified as a sale: (1)
Revenue Sales revenue is posted to the financials Documented customer arrangement exists
Sales US GAAP Compliance
Recognition Policy before the revenue cycle is comple. (2) Title has transferred to the purchaser (3)
Seller's price is fixed or determinable (4)
Customer collectibility is reasonably assure