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Sarbanes-Oxley and Trade Promotion Management for CPG

The recent Sarbanes-Oxley legislation stemming from the fraudulent accounting practices employed by the likes of Enron, WorldCom, HealthSouth and Ahold is just one more area where the government has heightened their focus on accurate financial reporting. Section 404 requires the SEC to adopt rules requiring a company's management to present an internal control report containing:
 
(1) a statement of the responsibility of management for establishing and maintaining an adequate internal control structure and procedures for financial reporting, and
(2) an assessment, as of the end of the fiscal year, of the effectiveness of the company's internal control structure and procedures for financial reporting. Section 404 also requires the company's registered public accounting firm to attest to and report on, management's assessment.
CIO magazine was quoted as saying that the current state of internal controls within American businesses is surprisingly lax. Most companies have not installed the kind of systems that can track changes to financial data as it moves around internally. ERP and CRM systems that collect data in real time feed that data in most instances to an unlinked spreadsheet. A 2003 survey from the Hackett group bears out this conclusion, 47% of the companies surveyed utilized standalone spreadsheets for budgeting and planning. These same companies on average pulled data from 3 different ERP systems.
 
  Sarbanes-OxleyAlthough the Sarbanes-Oxley legislation only applies to public companies today, you can rest assure that the trickle down effect will eventually find its way to future tax return audits of privately held companies. Companies in the CPG sector need to incorporate systems with the capability to link the fluid and rapidly changing trade promotion investment to their internal financial systems in real time. A proven closed-loop trade promotion system is an integral part of this capability.

When exploring the various options in this area it is critical to do the proper due diligence towards ensuring that the system being evaluated is truly closed-loop TPM, has a proven track record of over 5 years accurately linking this financial data in real time to all of the appropriate financial systems in at least 5 reference-able CPG clients.

Our many client references will confirm that Synectics Group's Account Review closed-loop TPM solution meets these criteria with over years of CPG trade promotion management and years of accurate financial linkage capability to all appropriate internal client systems.

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