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ASUG Illinois-Chicago Chapter Meeting

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1 ASUG Illinois-Chicago Chapter Meeting
Kraft Foods Gains Payback with Improved Journal Entry Process July 24, 2014 Presenters: Dan Vierneisel Eric Frisvold Associate Director, Kraft Foods Consultant, Salo LLC

2 Kraft Foods Overview Kraft Foods Group is one of the largest food and beverage companies in North America. Launched as a public and independent company on Oct. 1, 2012, the new Kraft has the spirit of a startup and the soul of a powerhouse; we are on a mission to be the best food and beverage company in North America We have a deep portfolio of beloved food and beverage brands in the beverage, cheese, refrigerated meals and grocery categories. Our products can be found in the pantries and refrigerators of nearly every household in the United States and Canada

3 Introduction Kraft Foods had three challenges to improve our Journal Entry process. Resolve an audit concern regarding controls for manual journal entries. Improve efficiency and reduce costs. Provide a more robust, flexible tool for our users and auditors. Kraft addressed these challenges by reengineering the journal entry process, implementing GLSU and executing a robust change management plan. Deployed a universal template for every journal entry. Eliminated offline file management by attaching supporting documentation to the document in SAP. Built tools for qualitative analytics. Simplified security maintenance for Park and Post. Provided comprehensive training to ensure process continuity and sustainability. Validates journal entries in Excel before submission. Captures upfront approvals via park and post. Processes accruals via park and post. Uses SAP workflow with notification. Enforces segregation of duties. Systematically controls journal entry postings/cutoffs by business unit during the close. Software Solution: GLSU, a flexible and intuitive spreadsheet interface for collecting and posting transactions to SAP. Solution Provider: Z Option Inc., provider of ready-to-use software that reduces the cost of using and implementing SAP by integrating common SAP functions with Microsoft Excel®.

4 JE Business Process Reengineering
Not just a technology swap! Primarily a business led initiative, not IT. Kraft did a complete process review. Identified deficiencies with the existing process and tools. Analyzed production stats (# of users, # of lines/JE, fields used, timing, materiality, etc.). Process changes included: Front-end approvals captured via park and post with automatic notification (including accruals). Supporting documentation attached to the document in SAP. Decentralized workflow. New posting control process during the month end close. Use of custom controls in SAP to facilitate staggered posting cutoff. Control over both parking (FVB1) and posting (FBV0) transactions. Controls are based on Account Type and Cost Objects.

5 Implementation of Z Option’s GLSU
Spectrum of GLSU implementation options: Out-of-the-box: Gives users freedom to build ad hoc JE documents. Locked-down template: Extensive controls in both Excel and SAP. Kraft chose to build a tightly controlled process: Use of one template for all JE’s. Template structure is locked to maintain controls. Metric-gathering capabilities are built into the template. Custom VBA is embedded into the template to control the process. SAP validation rules and user exits ensure compliance. Park and post with workflow ensures proper approvals.

6 Park and Post Workflow at Kraft Foods
An SAP workflow table is maintained for every user, identifying primary and secondary approvers. There are a small number of “Emergency Approvers” in HQ Accounting who can approve any parked document (other than their own). Alex Anderson Barbara Bentley Craig Carter Parked Document Primary Approver Notification Park doc in SAP from Excel Workflow notifies primary approver JE Produced in Excel with GLSU If not approved within time limit, secondary approver is notified Posted Document Either approver can post the doc Secondary Approver Notification

7 Change Management Target Audience:
Kraft had more than 500 users posting more than 2,000 JE’s/month. (As a result of this initiative, those numbers have been reduced to under 250 users posting fewer than 1,500 JE’s per month.) Change management influence on design, build & test phases: Engaged wide audience in formal and informal design reviews. Design objectives included minimizing GLSU-specific training for users. Followed an iterative design/build methodology. Engaged focus groups to evaluate the solution throughout development. Engaged a large testing team with detailed unit and integration test scripts. Rollout strategy: Branded the new process “JET” (Journal Entry Tool). Optional lunch-and-learn educational sessions prior to go-live. Mandatory training for all Submitters/Approvers before being added to workflow. Ongoing lunch-and-learn sessions offered since go-live. Rolled out one year ago and no enhancements or fixes have been required.

8 GLSU “Out-of-the-Box”
An Excel Add-In menu will appear when GLSU is installed on the PC. Users can select SAP fields to include in the header and detail records of their GLSU template.

9 GLSU “Out-of-the-Box”
A standard “out-of-the-box” GLSU JE template: The user will enter all data in the Header and Line Item records. All GLSU functions will be executed from the GLSU Add-In menu. Ad hoc flexibility is great for conversion or special posting needs. With the newest version of GLSU (which we are not using at Kraft) the Add-In menu is replaced with a ribbon menu.

10 Kraft’s JET template Excel buttons are used to execute all GLSU functions (users do not see the GLSU Add-In menu). Document header fields use drop-down selections, where possible. Required document header fields are later parsed for metrics analysis. GLSU populates the “Description” fields in the Line Items during validation. A running balance of line item amounts is shown in the “Dollar Amount” column header. “Parked Doc #” is populated when the document is successfully parked.

11 Kraft’s JET template For less commonly used data, users click the appropriate button to display additional fields. The hidden rows show technical names and header data that will be passed to SAP. Excel generated header data ensures accuracy and simplifies the process.

12 Kraft’s JET template Four groups of columns can be exposed or hidden as needed. A total of 31 columns are available. Users can build formulas in the template using data in the work area or on other worksheets. The support team would have to modify the template if additional fields are required.

13 Standard features of GLSU
For certain master data fields, GLSU offers “Pick Values” functionality with searchable pick lists. This function can also be initiated from the right-click pop-up menu or with the <F4> key. When the document is validated against SAP, all error messages are returned to the screen in a single message box, identifying cell locations where hard or soft errors were found. The document cannot be parked or posted until all hard errors have been corrected.

14 Kraft’s JET template Any number of supporting documents can be embedded into the JET template. The template, along with embedded docs, is attached to the SAP document.

15 Excel attachment in SAP
TestID The Excel template and embedded supporting document can be found on the “Attachment list” for parked or posted documents. Approvers and auditors no longer need to hunt down these critical documents!

16 Assessment of the Kraft project…
The original goals: Resolve an audit concern regarding controls for manual journal entries. Improve efficiency and reduce costs. Provide a more robust, flexible tool for our users and auditors. The results: - Audit issue closed. - Front end approvals in place. - Segregation of duties enforced. - Consistent process for all JEs. - Supporting documentation in SAP. - Streamlined process (nine steps to four). - One template used for all JE’s. - Elimination of manual JE log. - Staggered posting cutoff enabled. - Reduction of five FTEs. - Very flexible Excel template. - Pick Lists for selecting data. - Master data description displayed. - Front end validation of entire doc. - Elimination of paper support files. - SAP Workflow manages approvals.

17 Kraft Foods Gains Payback with Improved Journal Entry Process
Questions? Contact Information: Dan Vierneisel - Eric Frisvold (Salo LLC) -

18 Session Evaluations & Meeting Survey
Evaluate the education sessions immediately Provide event feedback in the same survey

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