In my previous posts, I talk about how to prepare your ERP data master list, forms and reports templates. In this post, I am going to breakdown how to setup ERP control by defining roles or responsibilities and approval process.
In a typical ERP software or any other related system, there’s a feature where you can define user roles that correspond to user access rights. Those roles can then be assigned to a particular person depending on the actual responsibility of that employee. For instance, an AP clerk should only be able to access accounts payable functions while an inventory clerk typically has access to inventory-related transactions and reports. These things vary depending on your organizational structure.
Below is a sample data structure to define user roles for you ERP implementation:
Role Name: AP Clerk
Assigned To: Juan dela Cruz, Michael Scott
Functions/Access:
- Voucher Entry / Find / Print
- Debit Memo Entry / Find /Print
- Supplier Maintenance
- A/P Register Report
- A/P Aging Report
Role Name: AP Supervisor
Assigned To: Rose Garcia
Functions/Access:
- Voucher Entry / Find / Print / Edit List
- Debit Memo Entry / Find /Print / Edit List
- A/P Approval
- A/P Register Report
- A/P Aging Report
Another special feature of an ERP system is the approval workflow. This refers to the process of preparation, review, approval and posting of each transaction. It is also important to assess if this is feasible to implement in your organization depending on the size, complexity, resource and control discipline. Should you allow online approval outside office premises and/or digital signature of the forms.
Here’s the data structure template for your approval workflow:
Document/Transaction: Purchase Order
Amount Limit: 0.00 to 99,999.99
Requester: User 1, User 2
Approver: User 3 (Level 1)
Amount Limit: P100,000 and above
Requester: User 3
Approver: User 4 (Level 1), User 5 (Level 2)
In the example above, only users 1 and 2 can prepare a purchase order with amount of 99,999.99 and below and the approver will be user 3. For purchase orders with amount of P100,000 and above, then only user 3 can prepare them and there will be two approvers. First approver is user 4 and then forwarded next to user 5 upon approval of user 4.
Take note that not all ERP software has multi-approver or multi-level approvers hence you will either adjust here or look for an ERP with this feature.
Same with role definition, this varies depending on the control level you would like to implement in your organization. In any case, this is an important aspect in ERP implementation that promotes strong control procedures to avoid posting errors and stimulate accountability.