QAD Enterprise Financials From Planning to Compliance Ren

QAD Enterprise Financials From Planning to Compliance René Bergkamp – Director, Research and Development, QAD

QAD Enterprise Financials – From Planning to Compliance Safe Harbor Statement The following is intended to outline QAD’s general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, functional capabilities, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features or functional capabilities described for QAD’s products remains at the sole discretion of QAD. 2

QAD Enterprise Financials – From Planning to Compliance Agenda • CFO challenges - IFRS - XBRL - Global Roll-out while meeting local requirements • QAD Enterprise Financials 3

QAD Enterprise Financials – From Planning to Compliance CFO Challenges 4

QAD Enterprise Financials – CFO Challenges IFRS U. S. • Duke's Fuqua School of Business / CFO Magazine Business Outlook March 2011 (472 US Firms) - 34% of CFOs say that convergence to IFRS accounting is one of their biggest accounting concerns - 83% of firms have not started to convert to IFRS or are far from ready to convert 5

QAD Enterprise Financials – CFO Challenges IFRS U. S. • 2011 important year - Completion IFRS/US GAAP convergence program - SEC plan to make a decision whether U. S. companies are required to use IFRS rather than U. S. GAAP - Canada and Mexico requiring use of IFRS • Earliest US implementation 2015/2016 6

QAD Enterprise Financials – CFO Challenges IFRS U. S. • Both Standard and Enterprise Edition fully support implementation of IFRS • Enterprise Edition is designed for Multi-GAAP and embeds IFRS compliance in the core accounting processes - Accounting layers, allocation module, …. • Start preparation early - www. qad. com/IFRS - QAD IFRS Q-Scan ! 7

QAD Enterprise Financials – CFO Challenges Reporting in XBRL format • XBRL: What is it? - e. Xtensible Business Reporting Language - Language for electronic communication of business and financial data - Common language: XBRL provides identifying electronic readable tags for each individual item of data 8

QAD Enterprise Financials – CFO Challenges XBRL – Key terms to know • Tag - Machine readable label that gives a standard definition for topic in a document. • Taxonomy - A dictionary of tags for • Specific accounting standards(US GAAP, IFRS) • Industry segments • Company specific tags • Instance Document - Collection of tags that is the building block to viewing and analyzing data <Asset>1000</Asset> <element name=”Assets” id=”Assets” period. Type=”instant” balance=”debit” abstract=”false” substitution. Group=”item” type=”monetary. Item. Type”/> 9

QAD Enterprise Financials – CFO Challenges XBRL - Sample Source: http: //xbrl. squarespace. com 10

QAD Enterprise Financials – CFO Challenges XBRL – Why? • Regulatory reasons - SEC requires public companies to use XBRL (US) - Mandatory for filing company accounts (UK) - Format within its e-Tax filing system (Japan) • Business reasons - Facilitates paper-less financial reporting Conforms to industry-accepted methods Cuts time required for accounting tasks Easily compare company information 11

QAD Enterprise Financials – CFO Challenges XBRL – Why? Processes Internal Financial Reporting Business Operations XBRL Participants XBRL Companies Trading Partners External Financial Reporting Management Accountants Investment Lending Regulation XBRL Financial Publishers & Data Aggregators Auditors Economic Policymaking XBRL Investors Central Banks Regulators Software Vendors 12

QAD Enterprise Financials – CFO Challenges XBRL U. S. • SEC requires public companies to submit financial statements in XBRL - Large filers, all remaining public companies for their first quarter ending after June 15, 2011 • Phase 1 detailed tagging of financials, block tagging of notes and schedules • June 30, 2012 detailed tagging of notes and schedules • Options - Outsourcing to an EDGAR filing agency Perform tagging process in-house using XBRL tagging tool Embedding XBRL tags in consolidation tool Embedding XBRL tags in financial reporting process in ERP software 13

QAD Enterprise Financials – CFO Challenges XBRL Enterprise Financials 14

QAD Enterprise Financials – CFO Challenges XBRL Customer Work Group • • Discuss practical implementation of XBRL Learn from other companies Help define QAD’s roadmap for XBRL Join by contacting QAD: xbrl@qad. com 15

QAD Enterprise Financials – CFO Challenges Global Roll-out, Local Requirements • How to centralize and still meet local requirements? • How to keep up to date with new legislation and new business practices across the world? • How to run a shared services center supporting multiple countries? 16

QAD Enterprise Financials – CFO Challenges Global Roll-out, Local requirements • QAD Internationalization offers generic solutions for country specific requirements - Enterprise Edition solution replacing prior localizations • Advantages - Single code base to support the world Supports shared services Global benefit from specific capabilities Keep up to date with downloadable content 17

Recently Released QAD Internationalization Functionality Periodic Costing • Cost method for inventory valuation that calculates periodic item unit costs based on inventory and shop floor transactions. • Supports Weighted Average, FIFO and LIFO • Required for - Legal requirements (IFRS, Brazil, Turkey, Italy) - Business practices in certain corporations 18

Recently Released QAD Internationalization Functionality Legal Documents • Some countries require inventory movements to be accompanied with a legally required shipping document Brazil : Argentina: Chile: Argentina Nota Fiscal Remito Guia de Despacho Chile Turkey: Poland: Thailand: Irsaliye Dokumenty magazynowe “Stock Card” Brazil 19

Recently Released QAD Internationalization Functionality Taxation • Suspended Tax on Customers Invoices (Mexico, France, Thailand) • Delayed Tax on Supplier Invoices (Mexico, France) • Withholding Tax on Accounts Payable (US, Columbia, Venezuela, Italy, Thailand) • Tax calculation extended to non-sales inventory transactions (Brazil) • Golden Tax On Customer Invoices (China) • Gross Income Accounting (Brazil) 20

QAD Enterprise Financials 21

QAD Enterprise Financials – Refresher • New Financial solution introduced with QAD Enterprise Edition - Multi-Layer, Multi-GAAP, Multi-Currency Additional accounting dimensions Allocation module Great for financial shared services From single site to very large global manufacturing company - State of the art technology - Extensive support for Excel 22

QAD Enterprise Financials – Refresher Continued Roll-Out 23

QAD Enterprise Financials – Planned Developments • • • Backwards Compatibility Customer requested enhancements Internationalization Group Reporting Automation of Consolidation 24

QAD Enterprise Financials – Planned Developments Backwards Compatibility • Ability to implement newer versions of Enterprise Financials without having to upgrade the complete QAD application suite - For example implement QAD 2011. 1 Enterprise Financials while running QAD 2009. 1 Enterprise Edition • Available for customers QAD 2009. 1 EE and upwards 25

QAD Enterprise Financials – Planned Developments Backwards Compatibility • Advantages - Allows companies to benefit from new Enterprise Financials capabilities without doing a full upgrade - Delivery mechanism for Internationalization updates that require new business logic - Benefit from experiences and support fixes of other implementations - Remain current and on a supported version • Starting roll-out middle of this year 26

QAD Enterprise Financials – Planned Developments Customer Requested Enhancements • Selection of enhancement requests • Example of enhancements added in QAD 2011 - Add description field to Open Item Adjustment - Usability enhancements Customer/Supplier Payment Mass Change - Creation of end-users for existing addresses or inactive customers in Invoice Post/Print - Implement validation for duplicates earlier in Supplier Invoice Create activity - In Supplier Invoice Create add Supplier Name and PO cost to the lookup on PO Number - Print aging report by sales person or payment group 27

QAD Enterprise Financials – Planned Developments Internationalization • Invoice Certification (Portugal) - Decree 363/2010: Software certification for invoice program - QAD is certifying QAD Enterprise Financials 2011. 1 • Electronic Invoice (Brazil) • Invoice Print converted to Report Framework • Advanced Banking System (Brazil) • Delayed Taxes Exchange Rate (Mexico) - Government issued exchange rates 28

QAD Enterprise Financials – Planned Developments Group Reporting Objectives • Domain and Group level financial statements • XBRL support • Source for BI Financial data 29

QAD Enterprise Financials – Planned Developments Group Reporting Overview Source Domains Chart translation Account Sub-Account Cost Center Project SAF Intercompany Base Currency GL Calendar Report Chart COA Cross Reference Entities GL Sub-Account Cost Center Project Cube Generate Report Cube Definition Currency Calendar Entities Report Cube Common Report Chart -GL -Sub-Account -Cost Center -Project -SAF Presentation Currency Report Calendar 30

QAD Enterprise Financials – Planned Developments Report Chart Maintenance: Cross Reference 31

QAD Enterprise Financials – Planned Developments Report Cube Definition 32

QAD Enterprise Financials – Planned Developments Group Reporting - Financial Report Writer Presentation Currency mns Common Report Chart -GL -Sub-Account -Cost Center -Project -SAF Report Hierarchy Report Analysis Codes Colu Report Cube Europe Rows Sales Automotive Americas Sales Packaging Asia Tree Report Calendar Report Analysis codes are the building blocks of the Report Hierarchy Tree 33

QAD Enterprise Financials – Planned Developments Drill down to the source entity 34

QAD Enterprise Financials – Planned Developments Report Tree • Tree structure - Represent the hierarchy of the report - Nodes build with Report Analysis Codes - Tree structures are reusable in multiple layouts • Build recursively from smaller trees 35

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QAD Enterprise Financials – Planned developments Automation of Consolidation • Ability to process multiple consolidation levels in a single run • Automatic eliminations • Multi-database consolidations • Consolidation dashboard 37

QAD Enterprise Financials – From Planning to Compliance Summary • CFO challenges - IFRS - XBRL - Global Roll-out while meeting local requirements • QAD Enterprise Financials - Backwards Compatibility Customer requested enhancements Internationalization Group Reporting Automation of Consolidation 38

QAD Enterprise Financials – From Planning to Compliance Metrics Affected Process Benefit Value Period/Year end reporting • Faster closure and reporting to market • By automating translations to other COA/GAAP fewer errors and more reliable results • Improved compliance to corporate governance standards such as Sarbanes. Oxley • Improved compliance at lower costs Meeting local legal and business requirements • Single solution for global compliance • Keep up to date by downloading Internationalization updates • Improved compliance at lower costs 39

QAD Enterprise Financials – From Planning to Compliance Next Steps • Attend Architecting and Managing a Global Enterprise Solution - Thursday at 11: 00 am - Speakers: • Trevor Steel, Solutions Consultant, QAD • Cliff Markell, Director of IT, Watts Water Technologies • Stop by the EXPO and learn what Enterprise Financials can do for your organization 40

QAD Enterprise Financials – From Planning to Compliance Questions & Answers • René Bergkamp: rbe@qad. com 41

www. qad. com © QAD Inc 42