Calculated Accrual Figures for Finance Department of a Technology Giant which Provides an Accurate View on Financial Liabilities of the Client
The client is a technology giant and the worldwide leader in software, services and solutions. It relies on its partner organizations across the globe to promote, expand and retains its business. The client runs a skills Initiative program to promote the sales of their cloud-based products by providing training to customers across the globe through partners. It pays subsidies to partners every month based on the volume of training activities reported.
Training activities reported by partners go through a series of validation checks before approval for payment. Successfully validated trainings are processed for payment. Partners resubmit unapproved trainings with corrected data in subsequent weeks for the payment. The client’s financial department needs to accrue for unapproved trainings to get an accurate view of actual financial liabilities.
Following approaches were used:
- We created a master file by consolidating the training data reported individually by all partners in a week to a single file using an algorithm developed in python.
- Identified the net new trainings reported in the consolidated file and added these to already submitted trainings through last week to create the master consolidated file.
- Listed down all the business rules related to subsidy calculation such as type of training, course, the country where the training is conducted, and special SOWs. We devised an algorithm to calculate subsidy for reported trainings covering all these business rules.
- Computed subsidy for all trainings reported by partners using devised logic.
- Identified all the paid transactions from the client’s internal data and calculated the already paid subsidy amount.
- Estimated accruals by reducing already paid amount from the total computed subsidy.
Following were the outcomes:
- Monthly updated accrual files provided an accurate representation of the actual financial liabilities of the client.
- Partner, country and region level views of accruals catered to different stakeholders of the client.
- Accrual figures for scheduled trainings helped the finance team in budgeting and forecasting related activities.