Sama Audit Systems &

Softwares Pvt Ltd

Over the years, we have developed sound capabilities in training and consulting. Sama provides a suite of specialized expert training services ranging from Introductory Training to Customized In - house Training.

Distributor Product UsefulnessCaseWare Inc.www.caseware.com

IDEA, IDEA Server

CAAT's - Data Analysis Software

Caseware Monitor

Continues Control Monitoring

Methodware Ltd.www.methodware.com

ERA Kairos Risk Management, IT Audit and Internal Audit processes

Audicon - www.audicon.net

SmartExporter Data Extraction from SAP

About Sama Audit Systems & Softwares Pvt. Ltd.

Sama was formed in 1998 with an Objective to enable business excellence through the use of world class Softwares, more competent Audit and Risk Professionals and stronger processes and assurance structures.

They took a lead in promoting audit tools in India. They have actively promoted the learning on Risk Management and Internal Audit activities by conducting a number of workshops from 1999.

Introduction

In these difficult times for the Transport & Logistic Industry where companies are under intense pressure following the economic downturn, most business cases are undergoing intense scrutiny and very often have to show evidence of very early returns on investment.

Within the T & L arena where most projects are often multi million rupees of investments over a period, it is unusual to have an opportunity to produce fast business benefits to the bottom line with a relatively small investment.

Revenue Assurance or Revenue Management has proved to be one of those.

What is Revenue Assurance

The Revenue Issue…..

Revenue Assurance and Revenue Management have become essential business drivers in achieving sound financial performance and ensuring continuity.

Possible threats that can impact optimal (maximised) revenue or the integrity of the booked revenue can broadly be distinguished in the following classes:

● Accidental revenue abuse from badly trained Staff● Unintentional creation of various problems due to design deficiencies or operating issues in controls● Deliberate revenue system abuse from creative ‘sales staff’ and the like

What is Revenue Assurance

The Business problem

Any event that has the potential to impact an organization's revenue, impacts the organization’s ability to meet its objectives.

Consequences include:

● Reduced customer confidence● Decline in revenues● Decline in market share● Regulatory / Analyst scrutiny

What is Revenue Management

Facts about revenue leakage

● Represents unbilled and under billed charges, written off revenues, missed revenue opportunities and delayed cash flow● Revenue leakage levels of 2-5 % are common● Leaks typically occur within many different functions that are part of the end to end revenue stream (see chart to the right)● Leaks don’t always mean mistakes (eg, the need to act quickly to take advantage of a business opportunity may not give time for systems and controls to catch up)● Capturing leaks increases revenue in terms of back-billing and go-forward billing. Numerous procedures are typically performed to capture revenue, esp. back- billing (eg, regulatory approval, customer notification, etc)● Stopping the leaks (i.e., fixing the root causes) provides sustainable incremental revenue● Revenue leaks are often interwoven with cost issues

What is Revenue Management

Warning signs / trigger questions / opportunity indicators

Are you experiencing:

● Credit Monitoring● Reconciliation issues● Unexpected financial corrections● Investigation requires significant manual efforts● Inconsistencies between the G/L and sub-ledger● Limited / inaccurate reporting to analyze operations● Number of adjusted contracts due to non-performance ● Increase in contracts submitted below CEC (Contract Entry Conditions)● Increase in the number and monetary amounts of credits and adjustments● Escalated consignments / shipments which are below SEC (Shipment Entry Conditions)

Problem drivers:● Accidental revenue abuse● Deliberate revenue abuse from creative staff● Various problems in systems, procedures & Controls

What is Revenue Management

Possible causes of revenue leakage

● Sale at ‘any cost’● Limited interface between systems● Weak internal control over revenue● Limited or inexperienced resources● Complex rating / discounting structure● Significant number of manual procedures● Clients with networks and multiple locations● Rapid adoption of new technologies / systems● Decentralized and autonomous sales processes

Objective TestCompleteness of invoicing

•Accuracy of Service Tax Levy•TDS not deducted

Completeness of revenue with regards to weight & volume

Consignments not measured for weight and / or volume

Data integrity •Duplicate in the Operational data•Duplicate in the Sales data•Duplicate in the Commercial data•Duplicate in Masters Data

End - to - end reconciliation of Operational and Financial data

The first test performed was an end to end reconciliation to validate that transactions test properly flow through the entire revenue lifecycle (e.g. from consignment order to cash)

Misusing of accounts with high discounts

•Same customer account number has different address lines•Same customer account number has different company name

Rationality of data Same client, same source & destination and Different rates

Timeliness of invoicing Stratification of DSO was made & high DSO sources were identified

Unusual discounts Discount given on judgemental basis instead of volume basis

Unusual weights (extremely low, high or rounded)

Consignments not measured for weight and / or volume

List of Billable Items verified using CAAT'sImportCargo Handling ChargesCargo StorageContainer Weighment ChargesCustoms Examination ChargesDe-stuff Delivery ChargesDocumentation ChargesEIR ChargesFuel and Energy SurchargeHazardous ChargesHousing Keeping ChargesLoaded Delivery ChargesLoaded Ground Rent ChargesOver Weight ChargesPlug In and Plug Out ChargesReefer Monitoring ChargesScanning ChargesSurvey Charges

ExportBack to Town Handling ChargesBack to Town Storage ChargesCargo Storage ChargesContainer Handling ChargesContainer Weighment ChargesDocumentation ChargesEIR ChargesEmpty - Lift off / Lift on ChargesEmpty Ground Rent ChargesFuel and Energy SurchargeHazardous ChargesHousing Keeping ChargesLashing Choking ChargesLift off / Lift on ChargesLoaded Ground Rent ChargesLoaded TransportationPlug In and Plug Out ChargesReefer Monitoring ChargesSurvey Charges