SAP Business Process: Sales & Customer Service

Ref #

Process

Sub Process

Process Objective

Risk
(Prior to establishing control)

Control

Sales

Sales & Marketing

Pricing information is accurate.

Data may be entered incorrectly, resulting

in delays or errors in sales order
information.

Pricing database has been created to provide

customer service with price information
developed and approved by management.

Sales

Sales & Marketing

Pricing information is accurate.

Data may be entered incorrectly, resulting

in delays or errors in sales order
information.

Standard price forms are used internally to

provide relevant information about prices,
rebates, and payment conditions.

Sales

Sales & Marketing

Pricing information is accurate.

Data may be entered incorrectly, resulting

in delays or errors in sales order
information.

Standard forms are used internally to capture

relevant information regarding rebates and
payment conditions.

Sales

Sales & Marketing

Pricing information is accurate.

Data may be entered incorrectly, resulting

in delays or errors in sales order
information.

Written confirmation of commercial and

financial contract conditions, whether by
specific notification or communicated
through invoice terms and conditions, is sent
to the customer.

Pricing set up/adjustments, instructions for

rebates and cash discount conditions
decided by local sales/account managers are
supported by written evidence or
authorization from a higher level.

Sales

Sales & Marketing

Pricing information is accurate.

Data may be entered incorrectly, resulting

in delays or errors in sales order
information.

Sales

Sales & Marketing

Supply Agreements

Locked into an unfavorable agreement.

Agency contracts with third parties or other

Huntsman entities exist and are reviewed
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
before execution or a pre-approved master
legal contract form is utilized for the
arrangements.

Sales

Sales & Marketing

Supply Agreements

Locked into an unfavorable agreement.

Sales

Sales & Marketing

Sales margins are reasonable.

Sales margins are not regularly reviewed by

Management reviews sales margins on a
management for reasonableness and
regular basis.
accuracy.

Sales

Order Entry

Sales data is complete.

Data may be entered incorrectly, resulting

in delays or errors in sales order
information.

Data integrity and completeness is ensured

by utilizing consistent forms with
sequentially assigned order numbers.

Sales

Order Entry

Sales data is complete.

Data may be entered incorrectly, resulting

in delays or errors in sales order
information.

Financial information contained within

customer master file cannot be
changed/overridden by employees entering
order information.

SAP Business Process: Sales & Customer Service

Ref #

Process

Sub Process

Process Objective

Risk
(Prior to establishing control)

Control

Sales

Order Entry

Sales data is complete.

Data may be entered incorrectly, resulting

in delays or errors in sales order
information.

Customer terms and credit information

contained within customer master file cannot
be changed/overridden by employees
through the order entry function.

Sales

Order Entry

Credit Review

Customer's ability to pay.

Proper credit review and authorization is

required from credit organization. Order
acceptance is adequately authorized.

Sales

Order Entry

Credit Review

Customer's ability to pay.

Customer credit limits have been

appropriately established. Blocking facility
exists before accepting new orders above
customer's credit limit.

Sales

Order Entry

Credit Review

Customer's ability to pay.

Delivery block is placed on orders for

overdue customers.

Sales

Order Entry

Credit Review

Customer's ability to pay.

Sales or Delivery block is placed on orders

from customers that are considered a 'high
risk' and have an overdue balance. Credit
notification occurs for 'medium' or 'low' risk
customers with an overdue balance.

Sales

Order Entry

Free of charge' Sale order

Free of Charge sales orders are not subject

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

Sales

Order Entry

Inventory availability / Production plan Stock outs, inability to fill customer order

Sales

Order Entry

Issue Shipping/Delivery
Notification/Bill of Lading

Sales

Order Entry

Product Returns / Claims

Customer returns may be not be recorded

accurately or completely. The balance of
Proper authorization is required to resolve
inventory and sales may be misstated in the customer claims.
financial statements.

Product Returns / Claims

Customer returns may be not be recorded

accurately or completely. The balance of
inventory and sales may be misstated in the
financial statements.

Sales

Order Entry

Improper documentation may violate local

statutory requirements. Potential fines.

Customer Service/Sales representative has

read only access to inventory management
system.

Adequately trained customer service

representatives are familiar with necessary
documentation and statutory requirements.
Adequate checklist has been established to
prompt customer service to follow document
requirements.

Return order types are configured and are

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

Ref #

Process

Sub Process

Process Objective

Risk
(Prior to establishing control)

Control

Reconciliation of ledgers and sub ledgers is

performed to ensure that all inventory
shipped was properly invoiced and recorded.
Open orders are appropriate monitored.

Sales

Order Entry

Maintenance of Customer balance,

Accounts Receivable, and Inventory
records.

Loss of revenue from unbilled shipments.

Under/Overstatement of inventory and
accounts receivable balances.

Sales

Order Entry

Maintenance of Customer balance,

Accounts Receivable, and Inventory
records.

Loss of revenue from unbilled shipments.

Under/Overstatement of inventory and
accounts receivable balances.

Open orders and missed shipments are

appropriately monitored.

Sales

Pricing, Rebates &

Commission Master Payment terms
File

Negative impact on working capital

Authorization to establish/change payment

terms is appropriately restricted.
Management review and approval of change
is required.

Sales

Pricing, Rebates &

Commission Master Maintenance of Customer Master File
File

Customer credit limits or banking

information could be changed or
compromised.

Access to customer master file is restricted

to authorized individuals. Sufficient audit trail
of changes to database is maintained.
Review of exception reports showing any
deviation from the master file profile is
performed.

Sales

Pricing, Rebates &

Commission Master Maintenance of Pricing Database
File

Loss of revenue due to unauthorized price

changes

Authorization lists for additions / updates /

exceptions to pricing database. Access to
pricing tables is appropriately restricted.

Failure to invoice customer for all

shipments that occurred in the month.
Potential loss of revenue from: inaccurate
billing, exchange rate conversion

Reconciliation of customer accounts to

customer shipments are performed. Sales
order information is reconciled with invoices.
Billing document types are configured to
automatically generate and post the
associated accounting document.
Sequentially numb

Sales

Invoicing

Invoicing for single order or monthly

billing

Sales

Invoicing

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,
is appropriately assigned within the
authorized.
authorized, and/or issued.
organization. Administrative controls are in
place to monitor credit notes issued.

Sales

Invoicing

Distributors

Balance of inventory and sales may be

misstated in the financial statements.

Regular physical inventory occurs of

distributor if inventory is housed at
distributor location. Monthly reconciliation of
inventory balance with Distributor's records
is performed.

SAP Business Process: Sales & Customer Service

Ref #

Process

Sub Process

Process Objective

Risk
(Prior to establishing control)

Control

Sales

Invoicing

Distributors

Balance of inventory and sales may be

misstated in the financial statements.

Monthly reconciliation of inventory balance

with Distributor's records is performed.

Sales

Invoicing

Consignment Sales

Balance of inventory and sales may be

misstated in the financial statements.

Ensure regular physical inventory occurs at

customer's location. Monthly reconciliation
of inventory balance with location records is
performed.

Sales

Invoicing

Consignment Sales

Balance of inventory and sales may be

misstated in the financial statements.

Sales

Invoicing

Consignment Sales

Balance of inventory and sales may be

misstated in the financial statements.

Customers are invoiced on a regular basis

(daily, monthly) for product consumed.

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.

Monthly reconciliation of inventory balance

with location records is performed.

Sales

Invoicing

Partial deliveries are appropriately

monitored and controlled.

Partial deliveries are not appropriately

monitored; resulting invoices may be based
on the full delivery rather than the quantity
actually delivered. The remaining portion of
the delivery is not completed on a timely
basis and/or invoiced accurately.

Sales

Segregation of
Duties

Adequate segregation of duties may

not exist between the maintenance of
customer master files and the
issuance of credit notes / rebates.

Employees may be able to inappropriately

change customer master files and issue
customer rebates / credits without proper
authorization.

Adequate segregation of duties exists

between day-to-day order processing and
pricing, rebates/credit notes and commission
master file maintenance.

Sales

Segregation of
Duties

Order entry personnel may override credit

Maintain separate job responsibilities
limits established by the finance
among employees to reduce the
organization which would result in selling
opportunity of defalcations or override
to customers that have a higher risk of
management objectives.
defaulting on payment.

Responsibility to perform order entry and the

ability to add/update credit limits is
performed by separate individuals.

Sales

Segregation of
Duties

Maintain separate job responsibilities

among employees to reduce the
opportunity of defalcations or override
management objectives.

Responsibility to perform the setup of

rebates and authorize payment of rebates is
performed by separate individuals.

Sales

Segregation of
Duties

Maintain separate job responsibilities

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

Sales

Revenue
Recognition Policy

US GAAP Compliance

Personnel that have the ability to set-up a

rebate and authorize the payment of
rebates may misallocate corporate
resources.

Sales revenue is posted to the financials

before the revenue cycle is comple.

Specific criteria is met before a product

movement is classified as a sale: (1)
Documented customer arrangement exists
(2) Title has transferred to the purchaser (3)
Seller's price is fixed or determinable (4)
Customer collectibility is reasonably assure