How ERP System (Oracle) Facilitates Companies in Auditing Process

How ERP System (Oracle) Facilitates Companies in Auditing Process

Technology is now playing a pivotal role in our day to day life matters. There is no doubt in it that usage of technology makes our life not only easy but more productive too. We can now handle multiple tasks at the same time which were not possible in the past. If we talk about oracle software (ERP system) then it’s also one of those inventions which gave us relieve and productivity in our daily work life. An oracle software is extensively using in most of the manufacturing and services industries.

The textile industry is also one of those industries which are getting multiple benefits from this technology. As it’s not only fulfilling the needs of finance but along-with that it’s also performing productive functions of accounting too. In general, if we closely look into the broader prospects of ERP system. Then it covers recording, summarizing and interpreting of accounting and finance data into more precise and efficient manner.

Why We Need ERP System (Oracle)?

The beauty of ERP system is that even an ordinary user can easily understand it within no time. And if we talk about the cost of ERP system then there is no doubt in it that it’s a bit high. But when we compare it with its benefits then it outweigh the cost from all aspects. Most of the big textile firms have their own internal audit functions due to the magnitude of financial transactions. Internal audit department uses different tools to carries out the audit of finance and accounting function. And this could only be fruitful if company uses highly integrated software system. The technology which is not only helps to summarize the data within no time. Along with that the authenticity of the summary/result could not be challenged anywhere.

ERP system makes life easier for auditors as it provides the best solution for auditing of financial and accounting transaction. Since the big organization’s transaction magnitude is so huge. So, the small or less integrated software cannot give the ultimate results in terms of speed and accuracy.

The usage and importance of technology varies company to company. In public limited companies, where people have invested their life savings in shape of investment in shares. So, being investors, they expect accurate, transparent financial position of the company time by time. The external auditors are normally hired by the shareholders to know the exact position of the company. These auditors have task to provide their opinion on the financial data of the company. If the company uses oracle then it makes it easier for external auditor to form their opinion on the financial data. Since there is no question about the accuracy and functionality of this highly sophisticated technology. So, the required outcome is normally obtained without any hassle.

Internal Audit of Purchases through ERP System:

The progress of company normally matters on different factors. A good marketing and production team cannot assure this thing that a company will progress. The financial and purchasing departments are also equally responsible for getting positive outcome. And for a company, the outflow of money equally concern as inflow of money. Because if you don’t have any appropriate check and balance on your financial activities. Then the efficiency of your sales and production teams couldn’t drag the organization on the way of progress. The ERP system didn’t ignore this important aspect too and it also efficiently manages the outflow payables of the organization.

Purchases Audit in Textile Company:

In order to know the in-depth of ERP system, we have to review the complete procedure that how it works in an organization. Let’s take the example of  Textile Company where most of expenses are on material requisition. When an audit of purchases carries out, you need to make sure that you have access to all modules in ERP. And it includes: Purchase requisition (PR), Purchase order (PO), Inward gate pass (IGP), Goods receipt note (GRN), Purchase Invoice (PI) and Purchase invoice voucher (PIV). Once you have complete access on these modules then it will really helpful to view the whole trail of transactions. Auditing these modules shall help to make opinion whether the purchases acquired through systematic procedure.

The purpose of purchase audit is to ensure that expenditures on purchases are actually for the use of the business. Further, we need to check this thing that all the materials are purchased according to agreed cost and units. In some firms, this audit is also called as reverse costing which gives the management about the clear picture of order after dispatch.

Where to Start?

The auditor normally starts with purchase order which is actually a main reason of every activity of order processing. After having the purchase order, he needs to the see all the purchase requisitions which were raised during order processing. And these are mainly includes; fabric requisition, accessories and trims requisitions etc. The purchase requisitions (PR) normally issued by marketing department who is responsible for delivery of goods to Customer. All the PRs normally signed by authorize person of department. The main motive for auditing the PRs is to check whether quantity and cost is in accordance with agreed value.

Purchase Order:

Once purchase requisitions are audited then the auditor normally moves on to Purchase department’s purchase orders. These purchase orders are normally issued against the purchase requisitions by the marketing department. While auditing purchase orders, the auditor is more curious about the quantity and unit price of the material. As these two things must be approved by the authorized person of the top management. All the purchase orders normally have an authorization person’s name on it. The good thing about ERP is that Purchase department’s POs fetches data from PRs. If there is no purchase requisition then no purchase order can be generated. So, the probability of extra or useless buying is not possible if you are using ERP system. But here the auditor normally reconfirms the quantities which are fetches from purchase requisitions.

Inward Gate Pass: 

Inward gate pass (IGP) is normally formed when goods arrived into production facility.  The IGP only signifies the date and time of arrival of goods against specific purchase order. It also shows the total quantity received against PO though. IGP is a proof of a delivery arrival which normally confirms that goods are delivered against specific PO. As the purchase order number is normally mentioned on the IGP. The Auditor normally needs to cross check the quantities of IGP with respect to its generated purchase order. In ERP system, IGP fetches data from purchase order so that each every received unit is checked under the light of demand paper.

Goods Receipt Note:

Goods receipt note is normally created when store & inventory department counted the material quantity. During Audit, the auditor checks the GRN to ensure that it has relevant PO, Quantity, Unit price. Further, he also checks this thing that all the documents are duly signed by the authority that controls the Store & inventory department. ERP integrates GRN with PO and IGP. So, GRN cannot be prepared until or unless the approvals of purchase order.

Invoice Posting:

The auditor needs to reconfirm whether the invoice posting against the PI is correct. Whether, it has proper tax rates, net values traces back to GRN and PO? If these are correct then make sure that PIV prepared on the basis of the whole data correct also. PIV had the correct nominal account in debit side with corresponding credit side. i.e. Purchases and Trade creditors. All these checks is normally performs within no time while using ERP system. Since, the integration of all document into one system can make this thing possible to compare and check value easily.

Opinion: 

An appropriate opinion can be made when an efficient audit is carried out through ERP which integrates each purchasing activity from purchase requisition to stock stacking. Although cost of implementation and maintenance of Oracle is high but the benefits are long lasting from every aspect.

 

ERP system

Why Blockchain Technology is Essential for Sustainable Fashion Industry

Blockchain Technology

The blockchain technology is not new for us. Whenever you talk about this technology the first thing which comes into mind is “Bitcoin”. As this technology is supporting all financial transaction of this virtual currency which became hot in past few years. Due to its exclusive feature of virtual payments, the blockchain technology became equally popular in other sectors too. As the said feature of payment overcome the lots of hassle of the businessmen, financial institutions etc.

What is Blockchain Technology?

The blockchain technology was invented by Satoshi Nakamoto in year 2009. As described earlier, it was made to facilitate the users of Bitcoin to make and receive payments through this technology. By using this technology, the users can make payments without involving any central bank or other financial intuition. With the passage of time, the blockchain technology is also using for other businesses and cryptocurrencies for virtual payments purpose.

In simple language, we can say it’s a set of databases which are connected with each other. And whenever, the user enters information in any database. It will update rest of the connected relevant databases automatically which are stored in different hard drives around the globe. There is no centralized storage in blockchain technology. And the data normally stores into different hard drives and servers of different countries or cities. So, the probability of data hacking is almost zero in this case of data storage. The synchronization process of the databases normally works through internet. The set of databases are called blocks and the link between these blocks is called chain. So, this is how the blockchain technology works and facilitating its users all over the world.

The scope and usage of blockchain technology is spreading in other industries too. There are so many industries like food, transportation, manufacturing and services where you can see successful implementation of this technology. This flexible technology not only improves the way of working in the said industries. Along with that it is also eliminated so many steps of documentations or complex file system through unique digitizing system. As the usage of digital identification of product/services, shipment tracking and smart contracts are proves of success of this technology.

Blockchain Technology in Fashion Industry:

As we discussed in our number of previous articles that sustainable practices are the need of present era. And the transparency of manufacturing and supply chain in fashion industry is a main ingredient for sustainable process. The blockchain technology also supports the fashion players in their sustainable product or service goal. Through this technology, the retailer can easily track its goods any time from manufacturing facility to the warehouse. Not only this, they can also track it further distribution means from warehouse to their point of sale. And the same information is also available for the end consumer to know better about life-story of their favorite brand.

There is no doubt that most of the famous brands are really worried about the counterfeiting of their hot articles. There are number of organized set ups which are totally dependent upon these type of illegal activities. They keep an eye on the upcoming range of the famous brands. And share the same material with their manufacturers for copy purpose. Their manufacturing counterpart copies the sent articles and dispatches the bulk quantity to them through swift means (by air). As these products are not only unethical but also not conforms the optimum quality standards. Besides brands, even consumer are also confuse during purchase that whether they are buying original or not? In blockchain technology, a consumer can easily access the complete information about the selected garment. So, it gives them a confident and proper verification that they are buying original brand owned product.

Why Blockchain Technology in Fashion Industry?

There some other tracking systems too exist into the market which can do the same job effectively. So, the question is why we need another new technology for the same purpose? Actually, the distinguish thing in blockchain technology is that the data can’t be altered or changed later on. Once the information is entered and stored then it would remain intact for end consumer in its original form. Like we described earlier, the information is stored in different block forms which are linked and stored in different locations. Since there is no central body involves into this so no one has the rights to alter the original information. So, the supplier or retailer can’t change the same later on. Further, the history log of all entries is also generating automatically and normally accessible to relevant entities for review.

Furthermore, the companies are also more curious to know the after buying feedback or experience of their loyal consumers. The surveys and researches are not the only medium to make decision of new or customized products. So, the fashion companies are now making contracts with tech companies to help them in this category. The famous outdoor apparel company “L.L.Bean” is taking help from Loomia’s blockchain technology for this. As Loomia will share the client’s data to L.L.Bean so that they could develop a better product for its clients. Here, we can’t ignore Martine Jarlgaard and Babyghost who considered and adopted this technology in year 2017. And the main motive behind this adoption was just to educate their consumer about the product manufacturing and its transportation. And there is no doubt; such transparency initiative through technology by these brands gives more confidence/loyalty in their consumers.

Our Input and Analysis:

The blockchain technology was originally made for virtual currency (Bitcoin). Till to date, the most of the countries of the world didn’t regulate this type of virtual currency. There is still need to do so many steps like how to certify the providers and platforms of this currency. If we see its application in fashion industry then it’s not fully conform the requirements of this industry. This is why, the apparel companies were just attracted and adopted this technology a few before (year 2017). And there are so many things which need to transform in the current technology according to their own industry. And for this the companies have to hire the developers to make the application according to their process. So, the main element is cost, which is really important when you are going to adopt this new technology.

Furthermore, if this technology is adopt by the most of the organizations. Then the other challenges would also arise of data protections, secrecy etc. Although, theoretically it is proved that the data hacking is not possible. Even then there is need to do certain steps and define protocols about the data protections. Because, before going into massive usage of this technology, the question regarding data protection may be arise. As there should be any organization who could take the responsibility of data protection. Secondly, the cost element will also be a main barrier in successful adoption. If this technology is not cost effective then chances of success or overall potential may be less than expectations. So, the transformation process and especially the running-cost of blockchain technology should be as cheap as possible. And after this, there is a chance that the scope and potential of this technology would be enhanced.

SuperEasy Way To Learn Everything About Technical Textile

SuperEasy Way To Learn Everything About Technical Textile

The traditional textile sector of the world is undoubtedly delivering its best for the needs and demand of its consumers. But with the passage of time, the consumers of this industry were expecting more from this industry. So, the creation of technical textile came into being for meeting the new and upcoming requirements of customers. As we know that in traditional textile, the manufacturers are more concern about the aesthetic aspects of the product. Whereas, in technical textile the main focus is on the function of the product. And there is a least concern about aesthetic features of the products. So, in simple words, technical textile product/item is normally make for non-aesthetic purpose. And only function of the product is more considerable in this textile category.

Technical Textile History:

The inception and motive for the development of technical textile was to fill the lacking features of traditional textile products. And the consumer of the traditional textile industry wants to keep the same product’s aesthetic but with some added features. So, the new textile form has been introduced which also have additional attributes of recent needs and demands of consumers. As the most of the technical textile products are based on synthetic fibers. So, this category of textile demand has boosted up in year 1799 when first synthetic fiber “acetate” was invented. With the passage of time it transformed into “Viscose” in year 1894. And later-on in year 1924 it was made more refine and called “Rayon”. But the remarkable thing is that all the above narrated types of fiber are not fully synthetic. Because, all the above three types are mainly made with wood-pulp which is a natural ingredient.

The first 100% synthetic fiber named “Nylon” was invented by US experts team in year 1939. And this progress went on into its peak when most useful synthetic fiber “polyester” was invented in year 1953. As it was milestone in the invented list of synthetic fibers due to its useful characteristics and attributes. The technical textile sector was continuously taking benefits from synthetic fibers according to its usage and benefits. But the trend has changed when man-made natural fibers was invented and rapidly captured market share under technical textile sector. Although there are number of man-made fibers are available now in the market. Yet “cotton”, “wool”, “linen” and “jute” are most likely used natural fibers in technical textile industry.

Technical Textile: A Growing Industry

Currently, we can see number of categories in technical textile which are using in different field of life. It applies not only in textile sector but you can also observe its application in other sectors too. And the prominent sectors which are getting beneficial from it are civil, engineering and medical industry. And if we overall check the usage and growth rate of this category then it’s quite amazing. The overall growth rate is of this textile sub-category is around 4% per year which is more than the main category.

Technical Textile: Types

There are multiple types of technical textile products which we can see into the market. But the main famous categories which are enormously using in different products are as follows:

Meditech:

The application of textile into medical field with some additional function is knows as  “Meditech”. It serves and produces different type of products like surgical disposable components, Diapers, artificial lungs, artificial cornea/joints/heart valve etc. As there are number of medical instruments and wearables which are making under technical textile category. So, the “Meditech” sector is estimating really healthy growth in coming future. This category was valued approximately US$ 12 billion in year 2016. And as per the expert’s findings, it would reach around US$ 20 billion till year 2026.

Indutech:

The technical textile is serving really health in industry. And for industrial products, it is offering extensive products  like conveyer belts, industrial brushes, bolting clothes, Printer’s Ribbon, Circuit Boards, Filters etc.

Mobiltech:

The technical textile is participating vigorously role in mobiltech. As it is producing Helmets, Car Upholstery, Auto safety Airbags, Auto Carpets, Seat Belts etc.

Hometech:

You can see multiple products which are producing under this category. It include Vacuum cleaner filters, Window Blinds, Furniture Fabrics, HVAC filters, Stuffed Toys, Fiberfill, Net clothes etc.

Clothtech:

In clothtech, you can have multiple items in market which falls under this category. It includes  shoe laces, umbrella fabrics, zip fasteners, interlining, Hook tape, Elastic fabrics etc.

Buildtech:

The textile which applies in construction and building calls as buildtech. It include Hoardings, Architectural membrane, Canvas Tarpaulin, Concrete Wraps, Pipe etc. As per the study findings, this category was valued in 2016 around US$ 13 billion. And it is forecasting that it would reach up to US$ 22 billion till year 2027.

Oekotech:

Now days, environmental sustainability is big and hot issue. So, the textile which applies towards environment protection from toxic and hazardous material or wasted products calls as Oekotech. The word Oekotech also knows as ecological protection environment textile. The key examples of this type of technical textile are domestic water sewerage and waste  recycling plants, corrosion safety etc.

Other than this you can find number of useful products under Geotech, Packtech and Agrotech textile category. And there are also some other categories in which you would find landmark products of technical textile.

Key Players and Market Analysis:

If we analyze the key market for the technical textile then we observes massive demand in developed as well as in under-developed regions. You will find it equally popular in North and Latin America, Eastern/Western Europe, Middle East and Asia Pacific region. Since most of the Asia Pacific region is under developed so the requirement of new infrastructure is needed. So, the demand of technical textile over this region is normally high. This is why, if we analyze the overall earning of technical textile sector of previous year. Then you would amaze to know that approximately 50% of the technical textile earning is derived from Asia Pacific region. Moreover, the analysts are forecasting that the projected future growth rate of the category would be around 6.8% in coming years.

Market Key Players:

There are number of giant companies of different countries which are aggressively dealing in technical textile sector. The main players are like 3M Co, Dickson-Constant, E.I. DuPont de Nemours & Co, Low & Boar PLC, International Textile Group (United State), Avintiv, Berry Global Group (United State), Milliken & Co, Kimberly Clarke (United State), DuPont (United State), Mitsui Chemicals (Japan), Ahlstrom Corporation,  Arville Tex Ltd, Huntsman (United State), Koninklijke Ten Cate (Netherlands), Toyobo Co. (Japan), SRF Limited (India), Lanxess (German), Freudenberg & Co. (German), Milliken & Company (United State), Low & Bonar (United Kingdom).

Other than the above described leading companies in technical textile category. There are also many other firms which are doing amazingly in this product category. And in order to dominate into the market, these companies are following various growth strategies. And it includes mergers, acquisitions, expansions and partnerships under particular product categories. Along with that heavy investment in new product development is also the part of these strategies. The main motive behind all above steps is to make themselves more dominant into that market. Since the market is at upward trend that’s why everyone is striving its best to grab the maximum market share. And for this, extensive research studies and surveys are done so that companies could understand the actual requirements of their clients. So that they could offer such customized products which could not only conform their needs. But it could also distinguish them from the existing competitors.

Conclusion:  

There is no doubt that the demand for technical textile is increasing tremendously. But cost effectiveness element is normally missing in this type of textile category. This is why; we can have a massive price difference if we compare it with the conventional textile product. Although the value or benefits which we are getting from the technical textile products is great. But the high prices and lack of proper knowledge sharing about the technical attributes of the product is missing. That’s why, most of the high feature products couldn’t survive or give the expected results.