This post provides a summary of a recent webinar we conducted with Sage to show how the Sage Enterprise Management solution is practically applied to address specific issues CFOs in organisations with complex financials face.

We have extensive experience in talking directly with frustrated CFOs, so we know the challenges they face. Together with global software leaders Sage, we’ve used this insight to develop an ideal ERP solution for enterprises with complex financials.

 

Together with Sue and Philip from Sage, we ran a free live webinar that takes the form of a role play in which the CFO of a hypothetical business is guided through the system by a Sage solutions architect.

  • Philip takes the role of the CFO of Quantic Medical Imaging—an archetypal Australian business with complex finances.
  • Sue acts in the role of a Sage Solutions Architect.

 

Introduction: Setting the scene of a growing global business

Philip explains that Quantic Medical Imaging began around 15 years ago in Melbourne, and having established good coverage across the Eastern seaboard, was keen to expand. They opened an office in Perth to look after WA, SA and also South-east Asia—working with an agent based in Singapore. Two years ago they opened an office in Hamburg, Germany, to develop the business within Europe. Last year, they acquired the agent in Singapore, and that business also owned a small manufacturing arm in China.

As the CFO, Philip says he is now finding it difficult to get an up-to-date view of the entire business and complete the preparatory work involved in having the company floated. Different parts of the business are using disparate systems. He’s also dealing with multiple currencies, and team members that need to operate in another language, i.e. his German and Chinese employees.

Challenges of the CFO of a multinational organisation with branches in different countries with different currencies

Challenges of the CFO of a multinational organisation with branches in different countries with different currencies

 

How Sage supports multi-currency management

Sue shows how within Sage Enterprise Management it’s possible to map how Quantic Medical Imaging is structured, the relevant legislation considerations for each area, specific office locations, and required connectivity that will guide the automation of inter-company and inter-site transactions (negating double-handling of these transactions in the system).

How multinationals can manage multi-company, multi-legislation and inter-site transaction with Sage Enterprise Management (Sage X3)

How multinationals can manage multi-company, multi-legislation and inter-site transaction with Sage Enterprise Management (Sage X3)

 

Sue demonstrates that within Sage Enterprise Management, Philippe can easily manage multiple currencies with multiple ledgers for different business arms within Account Core Models.

She uses the example of the company’s Chinese operation which has multiple ledgers:

  • First is the Legal ledger, where the currency is in Chinese Yuan.
  • The second is Analytical, which is in USD.
  • The third is the IAS (International Accounting Standards) ledger to support those reporting requirements.
  • The fourth ledger, titled Group, indicates the ledger is part of a group of ledgers that will all be reported in Australian dollars (a similar ledger would be set up for other locations part of this group).
Different types of Ledgers in Sage Enterprise Management (Sage X3) for multinational organisations

Different types of Ledgers in Sage Enterprise Management (Sage X3) for multinational organisations

 

The drop-down menu on each ledger allows you to set the rate type: this is how your foreign currency exchange rate is updated. It could be daily, monthly, or an average rate.

Set the rate type to determine how often your foreign currency exchange rate is updated in Sage Enterprise Management (Sage X3)

Set the rate type to determine how often your foreign currency exchange rate is updated in Sage Enterprise Management (Sage X3)

 

Philip asks: “With the Group ledger in AUD, do I have to update this myself at the month’s end to populate it?”

Sue advises that this ledger will be constantly updated as transactions occur, so as soon as a transaction occurs in CNY it is mirrored in the Australian Group ledger—there’s nothing Philip needs to manually run.

She adds that the system is able to accurately manage multiple currencies because of the mapping that sits behind each ledger within Sage Enterprise Management.

 

Multi-language is a breeze with Sage Enterprise Management

Sue moves on to demonstrate how easy it is for Philip to ensure non-English speaking members of his finance team can use the ERP. She demonstrates how administrative users can apply different language views for different locations.

Sage Enterprise Management (Sage X3) lets you change language settings for users in different countries

Sage Enterprise Management (Sage X3) lets you change language settings for users in different countries

 

Again, using the example of the China-based branch of the business, Sue shows that once a language pack is applied users are presented with information in their language including tabs, product detail and descriptions.

Display Sage Enterprise management (Sage X3) in Chinese or in any other language for your international users

Display Sage Enterprise management (Sage X3) in Chinese or in any other language for your international users

 

Purchasing double-handling eliminated with Sage

 

Philip asks: “I’ve got a very large Japanese supplier and they want to deal with my office in Singapore, but payment is coming out of Australia, yet all the POs and invoices need to come out of Singapore. How can we reduce the double-handling internally?”

Sage Enterprise Management (Sage X3) helps you reduce double handling between branches, suppliers and customers internationally

Sage Enterprise Management (Sage X3) helps you reduce double handling between branches, suppliers and customers internationally

 

Sue explains it’s possible to automate inter-company transactions to reduce double-handling.

She demonstrates by bringing up a purchase order where the ‘order site’ is Singapore and the ‘supplier’ is Australia (the Singapore branch is placing an inter-company order on Australia). Note that the boxes for ‘inter-site’ and ‘inter-company’ are both ticked.

Placing intercompany orders within branches around the world with Sage Enterprise Management (Sage X3)

Placing intercompany orders within branches around the world with Sage Enterprise Management (Sage X3)

 

Sue switches to the Total tab to reveal that this PO now includes a link to an automatically generated Sales Order.

The new Purchase Order includes a link to an automatically generated Sales Order

The new Purchase Order includes a link to an automatically generated Sales Order

 

By clicking the link she opens the Sales Order, which shows the sales site as Quantic Perth office, with goods sold to the Singapore office.

Sales Order containing more information about the automated intercompany operation

Sales Order containing more information about the automated intercompany operation

 

Sue explains that from this Sales Order, Sage Enterprise Management will also automatically create a ‘back-to-back’ PO so that the Australian team doesn’t have to re-create the PO on the Japanese supplier.

Additionally, the system will automatically create the Accounts Payable invoice in Singapore’s books to match the original purchase order. These features all take a lot of extra work out of the process.

 

Managing suppliers and customers across multiple entities

Philip asks: “Still on purchasing, the rest of my operation in Europe and Australia place orders with my Japanese supplier too. And at the moment, I’ve got a record of my Japanese supplier in my German system, and my Australian system. It’s the same with customers – some are ordering from several different subsidiaries. Do I have to create multiple entries?”

Sue explains that the beauty of a system like Sage Enterprise Management is that information exist in one single database, so you only need to set up one customer or supplier, no matter how many countries you work in.

On the screen for a specific Quantic customer, she selects an option called ‘Business Partner situation’ which enables you to search all transactions for that supplier/customer across multiple entities.

For this customer, Sue changes the field for ‘Company’ to one arm of the Quantic business identified as NA20. She leaves the ‘Site’ field blank so that all sites for that division will be included, and hits ‘search’.

Search all the transactions for a specific supplier/customer across your business entities

Search all the transactions for a specific supplier/customer across your business entities

 

This reveals two sites for that company where this customer has orders placed, and how much is owing. Sue explains that credit limit rules can be set-up within the system so that you know when customers have exceeded credit limits, and if a customer tries to purchase again from another part of the business users will be alerted. This way you reduce your company’s risk.

Monitor customer orders placed from different branches of your company to see if credit limits have been exceeded

Monitor customer orders placed from different branches of your company to see if credit limits have been exceeded

 

Consolidated financial reporting with Sage across multiple countries

Philip describes his reporting challenges:Of course I’ll need to be able to report by company, but I have another style of reporting that I really need which is based on the location of my customers, so for all of Europe, and all of Asia-pacific. I’d also like to report by product group. Also, sometimes large organisations in the medical field that operate hospitals and facilities across different countries give us a contract to implement imaging equipment across those countries and I’d like to be able to track that as a project, and see all expenses and all revenue for each contracted piece of work.”

Sage Enterprise Management (Sage X3) lets you report by geography and product group

Sage Enterprise Management (Sage X3) lets you report by geography and product group

 

Analytical dimensions for flexible reporting in Sage

Sue explains that flexibility in reporting can be managed within Sage Enterprise Management using analytical dimensions. Dimensions are designed to aggregate accounting information for analytical and budgetary purposes.

To meet Philip’s reporting needs, Sue says the system would be set-up to include a dimension for geography; product group; and contract.

Within Sage, Sue navigates to the details of a specific customer, and by clicking on the ‘Financial’ tab, reveals the analytical dimensions that apply to that customer, which include:

  • Cost centre
  • Project contract
  • Product group
  • Market
  • Sales region
Apply different analytical dimensions for better customer reporting in Sage Enterprise Management (Sage X3)

Apply different analytical dimensions for better customer reporting in Sage Enterprise Management (Sage X3)

 

Importantly, any transactions that are posted for this customer are captured in the SR (Sales Region) dimension type, which has been set up in the system as the United States—but can be customised for any region around the world. This is an extra piece of information available within the GL for CFOs to use in reporting at a later stage.

Sue then navigates within Sage Enterprise Management to show how the hierarchy of analytical dimensions is set-up, known as analytical pyramids.  

For the SR (Sale Region) dimension, the pyramid shows all the countries where the company has customers, which reporting regions each country’s customers feed into (Europe and AsiaPac), which all feed into the total.

Sage Enterprise Management (Sage X3) lets you report by Sales Region

Sage Enterprise Management (Sage X3) lets you report by Sales Region

 

Sue explains that you can have multiple levels in each dimension, depending on your needs, and can be set-up and modified using a simple drag-and-drop interface.

She shows how you can use dimension to capture information for a Sales Manager, in this case, the hypothetical ‘Hans Mueller’, who is responsible for sales across Germany and China.

Report by Sales Manager across countries

Report by Sales Manager across countries

 

Inquiries on dimensions are straightforward

In terms of reporting Sue explains that you can use standard reporting tools, use business intelligence reporting, and also run specific inquiries on analytical dimensions.

She shows how you save search filters as a ‘memo’ that can be quickly recalled whenever you want to run an inquiry. She shows how to recall a memo she created previously called ‘Financials’.

Save search filters as memos to run searches across Sage Enterprise Management (sage X3)

Save search filters as ‘memos’ to run searches across Sage Enterprise Management (sage X3)

 

Because she set the information up as a memo and recalled it, the data is automatically captured. You can have any number of memos set-up for quick and easy inquiries.

Recall data within Sage Enterprise Management using 'memos'

Recall data within Sage Enterprise Management using ‘memos’

 

Sue shows another example of an inquiry, this time for the sales account. It shows the sales figures within the set date range for both the Europe and AsiaPac dimensions. By selecting Europe and clicking on ‘details’, Sue reveals the balances for each specific country that feeds into that dimension.

 

 

Finding more details about the history of a specific account in a set country

Finding more details about the history of a specific account in a specific sales region

 

Finding more details about the history of a specific account in a specific countries of a sales region

Finding more details about the history of a specific account in a specific country of a sales region

 

Sue explains that if there were additional levels set-up within the analytical pyramid, you could continue to drill-down into the detail for each level. All of the information available within these inquiries can also be exported out to Excel.

 

Business intelligence dashboards come as standard

Sue demonstrates the business intelligence reporting tool available in Sage Enterprise Management, called Sage Data Management Analytics (SDMA). It provides in-built dashboard reporting functionality that enables you to report at group level, with easy drill-down into individual companies.  

Sage Data Management Analytics (SDMA) report at group level with drill down into specific companies

Sage Data Management Analytics (SDMA) report at group level with drill down into specific companies

 

She demonstrates how to select one specific company, which instantly refreshes the information on the dashboard. The information for that specific company can then be filtered by specific sites, dates, ledger types, etc.

Company drill-down reporting in Sage Data Management Analytics (SDMA)

Company drill-down reporting in Sage Data Management Analytics (SDMA)

 

Each dashboard item allows you to drill-down into the data sitting behind. For example, you can click through to see the income statement, balance sheet, Accounts Receivable manager, sales dashboards and more.  

With SDMA you can visualise income statement, balance sheet, Accounts Receivable manager, sales dashboards and more

With SDMA you can visualise income statement, balance sheet, Accounts Receivable manager, sales dashboards and more

 

Apply filters to your reports to drilldown and segment your data in real time

Apply filters to your reports to drill down and segment your data in real time

 

Fast and easy monthly Board packs

Sue recalls that Philip mentioned he was prepping the company for a float and asks him how long it takes to create Board packs?

Philip replies: “As you can imagine it’s not the most fun part of my job, with all parts of the business running on different systems I do a lot of it in Excel. I have to get an extract from every subsidiary and I give that to my team and we have to do a lot of work to make that presentable for our Board.”

Sue describes how Sage Enterprise Management makes it simpler within SDMA to create Board packs that also enable you to add logos, graphics and dashboard screens.

Once you design your Board pack the first time, you can simply run it in subsequent months and it updates the data/graphs included. You can also schedule the pack to be automatically sent out to Board members at a specific date and time.

She shows Philip an example Board pack created for Quantic Medical Imaging.

With Sage Enterprise Management (Sage X3) you can create a board pack in just a few clicks - export directly from the system in pdf

With Sage Enterprise Management (Sage X3) you can create a board pack in just a few clicks – export directly from the system in pdf

 

Sample Board pack report from Sage Enterprise Management (Sage X3)

Sample Board pack report from Sage Enterprise Management (Sage X3)

 

Philip says: “That’s great. So rather than assembling all that, this is set and forget. We can focus on analysing the results and putting in the commentary for the Board, and this is ready within a matter of minutes or hours as opposed to days and days as we do at the moment. I wish I could take this Board pack with me today!”

 

Q&A with our webinar audience

These are some follow up questions Sue and Philip fielded from our webinar audience:

 

Q: Can the system handle realised and unrealised foreign exchange gain and loss?

A:  As you trade in foreign currencies obviously there’s a difference between the time you incur the expense and the time you pay it: a currency fluctuation. The system will track that realised foreign exchange gain or loss. The system is also geared to handle unrealised gains and losses by performing re-valuations at month’s end—looking at all your receivables and all you payables and doing a re-valuation at that time at the rate of your choice.

 

Q: Can the system handle accounts that are not written the same ways in different countries?

A:  Some countries have a slightly different interpretation of accounting. For instance, good will is not always treated the same way: in some countries, it can be depreciated, in others not. So because of the multi-ledger set-up in Sage Enterprise Management, it is possible to map accounts into different accounts. For example, you can map multiple accounts into one other account, or into different areas within the chart of accounts.  

That was the conclusion of the webinar. You can always contact us if you have more questions.

You can learn more by downloading our White Paper: From complexity to a connected enterprise: a complete solution for CFOs.

Leverage Technologies is a Sage Platinum Partner. Our ERP solution built on Sage Enterprise Management helps CFOs address their biggest problems: data consolidation, real-time access to analytics, multi-company and multi-country management and more.

Talk to us today about streamlining complex financial management in your business. Phone us on 1300 045 046 or email info@leveragetech.com.au.

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