By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage, and assist in our marketing efforts. View our Privacy Policy for more information.
Read

Why A Legacy ERP Is Not Enough For Modern Procurement Teams

Mohammed Ridwan

November 2, 2023

5

In today's fast-paced business environment, most organisations rely on Enterprise Resource Planning (ERP) systems as foundational tools to manage and integrate various business processes. ERPs traditionally offer a broad spectrum of functionalities, assisting in handling essential operations such as procurement, data management, accounting, and supply chain management.

ERP systems provide a comprehensive suite of software functionalities to enhance and optimise various aspects of business operations. Over time, these systems have evolved, shifting from on-premises solutions to cloud-based platforms. However, organisations still face challenges when implementing ERP solutions across their enterprise.

One significant aspect often overlooked in ERP systems is their limitation regarding financial operations & intelligence. ERP solutions primarily focus on improving business processes and management but do not directly handle monetary transactions or provide financial products. This necessitates the integration of external financial institutions and banks with ERP systems.

Moreover, traditional ERP systems struggle to keep pace with the dynamic demands of modern procurement, particularly in the ever-evolving supply chain environment. Today, ERP systems need to be more proactive, incorporating features like real-time analytics and flexible processes to meet the ever-shifting requirements of procurement. Adapting to these changes is essential for businesses aiming to enhance their procurement efficiency and agility.

ERP Systems vs Procurement Solutions: How Are They Different?

ERP systems were initially designed to automate business processes and offer insights for internal controls, while procurement solutions comprehensively manage the ecosystem.

A P2P or a procurement solution is primarily built to meet an organisation's procurement and supply chain needs, an arena always problematic for traditional ERP.

Innovative organisations are now adopting leaner and cheaper solutions for their procurement processes. These tools can deftly handle specialised tasks and yield instant results.

Limitations of ERP

Factors like market volatility, evolving work dynamics, and shifting supply chains have made it challenging for businesses to integrate their procurement processes into their current ERP systems. Hence, it is vital to use specialised solutions to cater to dynamic business processes.

But before exploring the benefits of specialised solutions, let us consider the limitations of ERP:

Long Implementation Duration that Impedes ROI

Customising legacy ERP to meet procurement or supply needs is a hassle. It contributes to a longer implementation duration lasting several months. Customisation projects are resource-intensive. That makes a fast ROI virtually impossible to achieve.

Moreover, businesses must hire ERP consultants or trained partners for the implementation. The success rate and the implementation duration heavily depend on the expertise of such third parties.

With many companies already strung tight regarding capital, implementing legacy ERP to function as procurement systems may prove counterproductive.

Expensive Implementation and Maintenance

Legacy ERP licenses come at a high price. Depending on your software, ERP implementation costs can range from $150,000 to $750,000.

Moreover, procurement processes almost always require extra modules that can further increase costs. It also includes the additional burden of maintenance costs and training employees to use the software.

Failures To Meet Business Goals

The success rate of ERP implementation is dwindling. Recent studies from Gartner indicate that the failure rates of ERP implementations can exceed 75%. McKinsey, a reputed global consultancy, supports this claim as it quantifies the failure rate of all digital transformations to be higher than 70%.

One famous example is Hershey's ERP implementation failure in 1996 as they set out to replace their legacy IT systems with an integrated ERP environment. They chose SAP's R/3 ERP software, and an implementation time of 48 months was recommended, which was later cut down to 30 months. The result - a $10 million investment leading to a loss of $150 million in revenue, a 19% reduction in share price, and a 12% loss in international market share.

With such massive costs and periods involved in achieving numbers from legacy ERP solutions, using specialized procurement systems can make achieving business objectives far easier.

Lack of analytics and insights

ERP systems often fail to deliver the necessary analytics and data for effective operations. Managing vast volumes of data within these systems can be daunting. Challenges include ensuring data quality, the lack of real-time insights, limited data analysis capabilities, and integration issues with other software applications.

Poor User Experience

Many ERP systems require makeshift solutions to modify their functionality according to user demands, leading to frustration with end-users.

Legacy ERP systems are notoriously complex, making them challenging for end-users. Frequently, users must navigate between multiple interfaces, hindering productivity and adoption.

Furthermore, the lack of mobile apps and scattered functionalities exacerbate the issue—problems that a dedicated procurement solution can readily address.

Complex User Interfaces

ERP systems offer enterprise-grade capabilities, yet their inherent complexity and poor user experience pose significant challenges. Users often struggle with confusion, as traditional ERPs are overly intricate. The need for add-ons further exacerbates the complexity, as these additions must seamlessly integrate with the existing ERP system. This constant juggling of different user interfaces not only hampers productivity but also hinders widespread adoption.

Compromised Collaboration

One of the most disappointing aspects of legacy ERP systems is the lack of in-built communication channels. ERP systems struggle with establishing themselves as a medium of dialogue between internal business users and external suppliers, as they are not accessible from outside the business network. It tangles communication channels through unnecessary phone calls and scattered information exchange lines.  

They are also severely limited in their capacity to maintain supplier pipelines, requiring most data to be entered and managed through several spreadsheets.  

Urgent reports, design changes, and other important information cannot be communicated promptly, which may lead to losses. It leads to unnecessary time consumption and inaccuracies.

Solving ERP Issues with Dedicated Procurement Solutions

Addressing the limitations of ERP systems, organisations are increasingly turning to dedicated procurement solutions to streamline their purchasing processes and enhance efficiency. These specialised solutions offer advanced analytics, real-time insights, and improved data quality, making it easier for businesses to manage their procurement operations effectively.

By integrating dedicated procurement solutions with their ERP systems, organisations can bridge the gap between data management challenges and their need for comprehensive procurement intelligence, ultimately driving better decision-making and cost savings.

Addresses Overspending Issues

Integrating P2P software with ERP can prevent overspending in procurement. By harnessing ERP with eProcurement solutions, you can efficiently assess expenses across purchasing categories.

It allows you to manage budgets and increase savings. Moreover, integrating procurement solutions with ERP simplifies procurement management by automating approval processes.

Boosts Vendor Collaboration

Vendor collaboration is one of the most essential aspects of procurement. Keeping them informed of the relevant business operations helps avoid miscommunication.

By integrating procurement solutions with ERP systems, buyers and suppliers can access real-time data, empowering them to make informed decisions. This integration brings advantages such as:

  • Enhanced collaboration: Seamless collaboration between buyers and sellers, achieved through transparent access to purchase orders, invoices, and receipts.
  • Supplier empowerment: Suppliers are empowered with real-time insights into payment statuses via a supplier portal, which enables sound financial planning.
  • Stronger buyer-supplier relationship: Heightened transparency nurtures and strengthens the critical relationships between buyers and suppliers, a fundamental cornerstone for any successful business.
  • Improves Scalability and Flexibility

As businesses expand, stakeholders must seek platforms that can swiftly adapt to increased operational demands and changes in the operational cycle.

Procurement software provides essential features like mobile and remote access that most businesses require to scale operations. It also allows businesses to create highly specialised and efficient platforms, saving money, time, and human resources.

Helps Eradicate Duplication Issues

Procurement solutions can help connect all departments to ensure office supply orders are placed through a centralised system. They help share real-time data across tech, IT, finance and accounting, HR, sales, and marketing teams. It helps prevent duplicate purchases by coordinating buying across departments. Improved coordination also allows teams to maximise discounts and negotiation opportunities while saving time, money, and effort.

Reduces Procurement Errors Through Automation

Specialised software can help organisations optimise deals, accelerate processes, and reduce errors through automation. It helps allocate repetitive and simple tasks to the system rather than to users.

For example, businesses can automate their supply ordering with this technology. Automation helps set limits to ensure timely orders, prevent shortages, and follow any restrictions they have in place.

Handles Compliance and Risk Management Issues

Managing procurement-related risks and complying with regulations can be pretty challenging. An ERP-procurement integration empowers the software to handle compliance matters and mitigate risks during procurement processes, even involving multi-currency transactions.

Supplier Performance Management

Managing supplier performance during the procurement process can be quite challenging without the right tools at your disposal. However, by integrating procurement software with an ERP system, you can simplify collecting and analysing data related to supplier performance.

This valuable information encompasses delivery times, product quality, and responsiveness, enabling you to decide whether to maintain or end supplier relationships.

Inventory Management

Inadequate inventory management can result in too much or too little stock. These outcomes affect working capital and operational efficiency. One practical approach to tackle this problem is integrating procurement solutions with ERP systems. Such integration offers benefits like:

  • Real-time visibility into inventory levels, allowing for monitoring.
  • Automated reordering process, reducing the burden on manual efforts.

For example, a supermarket chain can leverage sales data to automate the reordering of items, minimising waste and ensuring the availability of products.

Provides Analytics for Better Insights

By integrating procurement solutions with ERP, businesses gain a flexible data model capable of handling big data. It manages the data and offers valuable insights to enhance information generation, storage, and decision-making. Procurement software encompasses advanced spend analytics, supplier benchmarks, and comprehensive performance management.

Drastically Improves End-User Experience

Procurement solutions are built from the ground up, keeping procurement operations as the top priority. It helps avoid a cluttered, mismanaged UI that comes with legacy ERPs, enabling users to be more productive.

End-users can adapt to changes in the software much quicker, increasing efficiency.

Conclusion

Procurement and sourcing processes require a dedicated platform in 2023. Unlike legacy ERP, such dedicated solutions can handle complex sourcing and procurement operations. They ensure a streamlined and seamless flow of relevant information between internal business organisations and external suppliers, allowing all stakeholders to have complete project visibility.

The outcome of implementing a smaller yet far more efficient tool will facilitate faster time to market, subsequently letting you achieve your ROI at an expedited rate.

While customising an ERP may sound enticing, opting for an eProcurement solution is smarter.

Find out how much your business can save with Pluto

Discover your savings with Pluto's Cost Saving Calculator and take control of your expenses. Unlock cost-efficiency now!

Calculate Now

Learn how Pluto is helping Keyper        to eliminate petty cash spending and optimize spend management

Read More

At Pluto Card, our mission is to assist businesses of all scales make well-informed choices. To uphold our standards, we follow editorial guidelines to guarantee that our content consistently aligns with our high-quality benchmarks.

You may also be interested

5
All
Corporate Cards
October 5, 2022

Vlad Falin

Corporate Card Management: Guide for 2024

The realities of the modern business world require companies to keep a tight hold on their spend management.

We’re not just talking about how you track expenses or reconcile your debts; that’s basic stuff. No, we’re talking about the entire process, from deciding who has the spend rights to analyzing how business spending affects your cash flow and taxes.

The more your business expands, the more crucial (and complex) your expense management process becomes. Spending analysis allows you to correct imbalances, watch for fraud and employee theft, and prepare for regulatory filings.

However, it’s also a cumbersome, time-consuming process that, without the use of the proper platform, requires quite a bit of man-hours to complete.

Modern spend and card management needs to be more sophisticated, intuitive, and built on the needs of finance teams, accountants, CFOs, owners, and employees!

That’s why, at Pluto, we firmly believe in the power of proper corporate card management. Establishing clear policies, outlining appropriate spending limits, and designing airtight analysis protocols can keep your finances in check.

{{gain-control-banner="/components"}}

Modern Corporate Credit Card Programs

Traditionally, businesses relied on employee reimbursement for out-of-pocket expenses to facilitate team and department spending. While using employees to frontload business costs helps with float, it also creates potential hardships and liabilities.

Moreover, the process of submitting, reimbursing, and properly cataloging expenses is grotesquely time-consuming for your finance team.

In part, corporate credit cards were designed to take the pressure off corporate finance teams. They make expense management easier, simplify spending procedures, and digitize the bulk of your spending.

Managing corporate credit cards can get quite complex. Adding new cardholders, suspending or closing accounts, or untangling business and personal expenses could take hours of paperwork and phone calls.

But it does not have to be like that. At Pluto, we leveraged our corporate experience, had countless talks with our users, and came up with solutions to every bottleneck of card management.

On-demand corporate cards

For employees to be able to make business expenses, they will need a corporate p card. In our day and age, most of their spending will be online.

Pluto provides you with an unlimited number of virtual cards that can be easily issued right from the dashboard.

If a physical card is needed, you will go through the same simple process, and the card will be delivered to you in just a couple of days.

Receipt Capture and Expense Tracking

Corporate credit cards feed your business expenses into a centralized monthly report. With Pluto, submitting a receipt is as easy as taking a picture with your phone, literally.

When the expense is submitted, it is immediately reflected in the account report.

These reports provide each department head and finance team with the visibility needed to:

  • Link credit card transactions to the right employee
  • Crackdown on overspending
  • Maintain business-wide cashflows
  • Maximize efficiency

With Pluto, you can easily filter through various expenses, check which expenses are still pending, and see the details of that particular spending team-wide.

Increased Flexibility

Corporate cards also provide businesses with the flexibility to take the approach that suits their needs. For instance, your business may assign corporate cards only to key employees and management or traveling employees.

Workers who make only occasional purchases can use Pluto virtual or pre-loaded cards with one-time or limited spend codes.

Ultimately: More Control

Aside from these perks, company credit cards allow you to maximize your data collection and improve your analytics.

You can use this information to curb unnecessary spending, generate insights, and even negotiate better rates with vendors.

But without a proper corporate card management program in place, it’s all too easy for the system to turn upside-down.

What is Corporate Card Management, and Why is it Important?

A corporate card management platform allows business leaders to proactively wrangle company expenditure concerns from multiple fronts.

But to keep everything running smoothly, you also need a well-designed corporate card policy that ensures you are not limiting employees in their work while you are tracking the expenses.

Using corporate cards for operational expenses allows your team to work more efficiently—no more complicated approval processes when buying an online subscription or plane tickets.

But to achieve the balance between flexibility and control, you must have a corporate card management policy. Good corporate card programs:

  • Outline rules for use, such as where and how much employees may spend.
  • Capitalize on issuer-provided controls to set spending limits.
  • Monitor and analyze employee cash flow to minimize inefficiencies.
  • Are quick to catch or counteract employee or outside fraud.
  • Simplify real-time expense reporting.
  • Save time and money by reducing or eliminating physical paperwork.

Above all, a responsible management program frees up resources, putting money back on your balance sheet.

{{cs-cta-component}}

Best Practices for Efficient Corporate Credit Card Management

The key to managing corporate cards successfully is setting expectations, communicating responsibilities, and setting controls for employee and employer accountability.

Whether you set card limits, lock and unlock cards, issue virtual cards, or code and track expenditures daily is up to you.

Just as long as you design a system that balances control and comfort.

Set Up a Corporate Card Policy

Your company policy should:

  • Set expectations and communicate cardholder responsibilities
  • Lay out eligibility requirements to receive a card
  • Set spend limits for teams, departments, or specific expenditures
  • Outline the process for submitting receipts
  • Establish clear review and penalty processes for violating these rules

Written properly, your policy should ensure everyone understands their rights and responsibilities. 

Decide Which Employees Will Get Cards

One of the most important components of managing your corporate cards is deciding who receives them.

At first, you may want to stick with assigning cards to upper-level management or department heads. But as your business grows, you may enact policies to permit other employees to receive cards conditionally or permanently, such as your sales team.

Ensuring your cards are in the right hands for the right reasons gives your employees a sense of flexibility and responsibility.

Consider Virtual Cards

You might consider issuing virtual cards when an employee may need one-time or limited access to a corporate card.

With Pluto cards, you can issue unlimited virtual cards in a matter of minutes and set spending limits as needed.

So the time from the employee request to delivering the virtual card credentials is minimal.

Set Budgets for Each Team and Department

Clear budgets take the guesswork out of reconciling your expenses and provide a “pool” of funds for teams to pull from.

These controls can help curb spending while still providing the funds your business needs to succeed.

Separate Personal and Corporate Expenses

When you design your budgets, it’s crucial to ensure employees know what constitutes a business expense and what doesn’t.

For instance, some companies provide generous food allotments for traveling employees, while others limit corporate card spending to hotel and transportation expenses. In this instance, employees purchasing their own meals would qualify as a personal expense.

You also want to clarify that employees can’t use their company cards for personal expenses that don’t relate to business. Even if they plan to repay you, it must be clear that the corporate card can not be used for these matters.

Have Limits on Cards and Spending Categories

Another way to crack down on corporate card expenses is by setting limits. With Pluto you can set limits when creating a new card, or adjust the limits on the go. 

Review these limits regularly to make sure that everyone has limits that are sufficient to support them in their work. 

Make Expense Reporting Simple

The card expense reporting process shouldn’t take you hours. Submitting an expense in Pluto is a matter of just a couple of clicks.

Pluto card expense submission

Drag and drop the receipt into Pluto, add a couple of details and that is it. This efficiency ensures that employees submit all their expenses on time. 

Document Every Purchase – Digitize Receipt Management

When it comes to your expense policy, your corporate credit card statement isn’t reliable enough.

Mandating receipt uploads means that you can verify the accuracy of each transaction for internal and tax-related purposes.

But in the modern world, many vendors are moving away from physical receipts that tear, smudge, or blow away in the wind.

For these instances, consider setting up a corporate email address to provide all-digital vendors.

And for expenses that do generate physical receipts - Pluto allows you to simply take a picture of the receipt with your phone and upload it to the expense management system!

Monitor Employee Spending Habits

One enormous benefit of corporate cards is the sheer transparency involved.

Every transaction is recorded and automatically categorized, allowing you to monitor corporate card expenses using credit card statements. You can also use this information to identify overindulgent employees and limit any unscrupulous spending habits.

But don’t just wait for the statements to show up monthly. Pluto allows you to proactively set alerts, notifications, and monitor transaction activity, helping you catch problems before they snowball, such as “double-dipping.” (Submitting the same expense twice, by mistake or intent.)

Analyze Expense Reports Regularly

Another facet of corporate card expense reporting is regularly analyzing your reports.

With Pluto, businesses can sort expenditures by vendor, department, employee, or internal expense codes.

Sorting and analyzing your expense reports ensures that even if you have dozens of cards floating around, you can readily monitor and manage the ins and outs.

Integrate with Your Accounting Software

The best way to unlock your corporate cards’ potential is by integrating expense software with your accounting software.

Doing so feeds each corporate credit card expense right into your accounting log, saving hundreds of hours entering, verifying, and double-checking that your corporate card statements match actual business expenses.

Pluto allows you to integrate with all major accounting software.

Key Takeaways

  • Efficient corporate card management requires you to use a platform that will allow you to have complete spend control and flexibility.
  • This is where Pluto comes in – our platform provides you with all the features and tools necessary to fully manage your corporate card spending.
  • A corporate card usage policy is another critical element to keeping spending under control – by setting clear guidelines on what can and cannot be purchased with corporate cards, you can avoid unnecessary expenses.
  • Finally, effective communication and training for employees will ensure that everyone is on the same page when it comes to using corporate cards responsibly.

 

Corporate Cards FAQs 

What is a Corporate Card Program?

A corporate card program issues cards to – and establishes rules for – employees who make purchases for a business.

These purchases can range from buying office supplies to airline tickets. Corporate card programs set guidelines for who can use a card, their spend allowance, and the expense reporting process, among other facets.

What is the Advantage of a Corporate Card?

Corporate credit cards offer multiple advantages, including:

  • Eliminating cumbersome reimbursement programs
  • Centralizing your expense management system
  • Integrating expense tracking features to simplify taxes
  • Restricting employee spend based on spend limits, vendors, or products
  • Reducing potential delays in the reconciliation process

Plus, many corporate cards connect to accounting software to allow businesses to slash time and hours wasted on expense report management.

What is Corporate Card Expense Management?

Expense management refers to the systems that organizations use to track, review, and pay for business and employee expenses.

Keeping expense management processes tightly controlled ensures that businesses can reconcile their balance sheets.

These expenses include any purchases an employee makes to improve the business, from office supplies to business travel costs.

Often, modern expense reports reflect tons of digital items too, like subscriptions and cloud space.

What is Corporate Card Reconciliation?

The corporate card reconciliation process verifies that corporate card statements match a company’s general ledger.

Businesses rely on these processes to validate transactions, keep expenses reasonable, and prevent fraud. (Not to mention, reconciling the books is essential - come tax time.)

With reports that Pluto generates, the work is minimal. You issue corporate cards, put limits on them, and all the receipts and transactions are stored in the Reimbursement report.

Who is Responsible for a Company Credit Card?

From a legal and liability standpoint, employers and businesses are responsible for all expenses charged to a corporate credit card.

That said, businesses may outline use cases in which an employee is responsible for repaying their own charges, such as when they make personal purchases on their employer’s dime.

5
All
Updates
March 23, 2023

Leen Shami

Ramadan Benefits in the Workplace: A Guide to the UAE and MENA Region

The month of Ramadan provides HR Managers with the opportunity to take the initiative in their organization and implement a benefit program for employees and to remind them to support their Muslim colleagues during this holy month.

What are the benefits of implementing a Ramadan employee benefits program?

Employees who observe Ramadan may require special considerations in order to maintain a high level of performance.

The main goal of any corporate environment is to get the best possible results, but this can only be achieved if your team is given a supportive environment.

During Ramadan, HR managers and employers should consider implementing employee benefits programs to ensure that their employees are able to fulfill their religious commitments while feeling supported by their companies.  

By doing so, you will help ensure that every member of your team has access to the resources they need to be productive and successful.

Employee benefits program

Flexible working hours

Allow employees to come in late or leave early during Ramadan, modify their hours so they can work when they feel the most energized,and be able to take part in religious activities such as prayers while still being productive at work.

Remote or hybrid work

Remote or hybrid work can provide employees with more flexibility and autonomy to manage their work and religious obligations during Ramadan, allowing them to maintain their productivity and well-being while observing the holy month's spiritual practices.

Set up dedicated prayer spaces

Having dedicated prayer spaces can help employees maintain their spiritual practices during the workday. This is particularly important during Ramadan when employees may need to perform their daily prayers. Providing these spaces can make it easier for employees to observe their religious obligations without having to leave the workplace or worry about finding a suitable location to pray.

Accommodate dietary needs

Provide employees with food options that meets all dietary needs, so they can break their fast at the office if needed.

Examples of foods that are commonly used to break the fast:

  • Dates
  • Dried fruits
  • Ayran (yogurt drink)
  • Soups
  • Sambusak ( pastry filled with cheese or meat)

Inclusivity

 Promote open dialogue between employees of different faiths to foster an inclusive workplace environment. Consider arranging a presentation for those who would like to learn more about Ramadan and Islam.

Gift and Bonus Programs

Corporate gift and bonus programs during Ramadan can take many forms, but the underlying purpose is to show appreciation to employees for their efforts and to strengthen the relationship between the employer and employees.

Here are some common examples of corporate gift and bonus programs during Ramadan:

Eid al-Fitr bonus

It could be an additional incentive where employers give their employees an additional payment or bonus at the end of Ramadan to celebrate Eid al-Fitr, which marks the end of the month of fasting.

Corporate gifts

Companies may offer gifts such as food hampers, prayer mats, and other religious items to their employees during Ramadan as a way to show appreciation and respect for their faith.

You could also delight your employees with a gift that they can use to enjoy dinner with their families. One way of doing this is by issuing Pluto corporate cards for your employees with an allocated budget on them. For e.g., you can issue a your employee a Pluto corporate card with a 500 AED spend limit to be used a restaurant of their choice.

Charitable donations

Some companies may choose to make charitable donations on behalf of their employees during Ramadan as a way to give back to the community and show solidarity with those in need.

You can add on to that by giving your employees the opportunity to pick what charity they would like the company to donate to.

It's worth noting that corporate gift and bonus programs during Ramadan should not be seen as an obligation or a substitute for fair compensation and benefits throughout the year. Rather, they are a way to show appreciation and strengthen the relationship between employer and employees.

Iftar and Suhoor Programs

Iftar and Suhoor are the two main meals that Muslims consume during Ramadan. 

Iftar is the meal that is eaten after breaking the fast at sunset, while suhoor is the pre-dawn meal that is eaten before the fast begins.

These meals have significant cultural and religious importance, and hosting iftar and suhoor programs can provide a sense of community and inclusivity in the workplace during Ramadan.

Importance of iftar and suhoor programs

Iftar and suhoor programs provide the opportunity for employees to come together and share in the spiritual significance of Ramadan.

These types of activities are also beneficial for team building, as they create an atmosphere of camaraderie among colleagues and foster a stronger work culture.

Its importance can be categorized into three main points:

  1. Connection: Sharing a meal with colleagues can help to strengthen connections and build relationships, fostering a sense of community in the workplace.
  2. Cultural awareness: Hosting iftar and suhoor programs can provide an opportunity for employees of different backgrounds and faiths to learn about Ramadan and its traditions.
  3. Appreciation: Providing meals for employees during these times shows that the company values and appreciates its employees and their religious beliefs.

Examples of iftar and suhoor programs for employees and how to host one:

  • Potluck iftar: Organize a potluck iftar at the office, where employees bring their favorite dish to share with their colleagues.
  • Company-sponsored iftar: Host an iftar event at a restaurant,  where the company provides food and drinks for employees to break their fast [see list of recommended restaurants below].
  • Virtual iftar: For remote workers or those who cannot attend in person, host a virtual iftar.
  • Charity iftar: Host an iftar event where a portion of the proceeds goes to a charity or non-profit organization. (Please make sure you are in line with UAE charity regulations before doing so. Learn more here)
  • Catered iftar: Hire a catering company to provide a full meal for employees to break their fast [see list of recommended catering companies below].
  • Suhoor breakfast: Host a breakfast event before the start of the workday for employees who are fasting.
  • Iftar meal delivery: Deliver meals to employees who are working late or unable to attend the in-person event.
  • Ramadan decorations: Decorate the workplace with Ramadan-themed decorations to create a festive atmosphere.
  • Ramadan trivia: Host a trivia game related to Ramadan and its traditions during the iftar or suhoor event.
  • Ramadan volunteer day: Organize a volunteer day where employees can give back to the community during the month of Ramadan.

Prayer programs

Observing taraweeh and Laylat al-Qadr during Ramadan helps Muslims to deepen their faith and spirituality, and it provides an opportunity to reflect on their actions and intentions throughout the year.

An employee prayer program during Ramadan can have numerous benefits for companies and their employees, including promoting diversity and inclusion, improving morale and relationships, and fulfilling social responsibility.

Taraweeh

Taraweeh prayers are additional prayers that Muslims perform during the holy month of Ramadan after the Isha prayer. These prayers are performed in congregation and typically consist of 8 to 20 cycles of prayer, depending on the tradition.

Companies can host taraweeh prayers at a mosque or the office on specific days of the week, such as Tuesdays, to create a sense of belonging and inclusivity among employees.

Laylet al-Qadr

Laylat al-Qadr, also known as the Night of Power, is considered to be one of the holiest nights in Islam. It is believed to be the night when the first verses of the Quran were revealed to the Prophet Muhammad, and it is said to be a night of forgiveness and mercy.

With laylat al-qadr being the most important night of Ramadan, it is important for your company to offer benefits during this day, such as:

  • Consider giving the following day as PTO, since most Muslims stay up all night in prayer and reflection.
  • Offer a transportation stipend to the mosque in order to show the company’s support of their employees religious beliefs.
  • You can do so using Pluto’s platform by offereing a one-time purchase card with a set limit that can only be used with taxis, Careems, Uber or for gas.

Ramadan email templates that can be shared with employees

There is a lot to take care of when preparing for Ramadan. We've put together some sample email templates for various corporate initiatives to make your job easier.

Email Template 1: Announcing flexible working hours during Ramadan

Subject: Ramadan Working Hours

Dear [Employee Name],

As the holy month of Ramadan approaches, we would like to inform you that we will be implementing flexible working hours during this time to accommodate those who will be observing the fast.

Our office will be open from [start time] to [end time]. We understand that some employees may need to adjust their schedules due to the early morning and evening prayers, as well as breaking their fast in the evenings.

If you need to adjust your working hours, please speak to your line manager, who will be happy to discuss the best option for you.

Our company values diversity and inclusivity, and we hope that this initiative will help our employees observe Ramadan comfortably.

We wish all our staff observing Ramadan a blessed month, and may you get the best out of this spiritual journey.

Ramadan Mubarak!

Best regards,

[Your Name]

Email Template 2: Announcing company charitable donations during Ramadan

Subject: Ramadan Charitable Donations

Dear [Employee Name],

As we approach the holy month of Ramadan, we would like to remind you that our company values generosity and charitable giving. In line with this, we have decided to make a donation to [charity name], which supports [cause].

We believe that this is a great opportunity to give back to those in need and demonstrate our commitment to making a positive impact in the community. We hope that this donation will inspire you to consider making a charitable contribution during this holy month.

Thank you for being part of our company, and we wish you a blessed Ramadan.

Best regards,

[Your Name]

Email Template 3: Inviting employees to an Iftar meal

Subject: [Company Name] invites you  to an Iftar Meal

Dear [Employee Name],

We would like to invite you to an Iftar meal on [date and time], which will be held at [location]. This event is an opportunity for our employees to come together and break their fasts as a community.

Please RSVP to [email/phone number] by [RSVP deadline] to confirm your attendance. If you have any dietary requirements, please let us know, and we will do our best to accommodate them.

We hope that this event will be an enjoyable experience for everyone and that it will help to strengthen our company culture.

Thank you for your hard work and dedication, and we wish you a blessed Ramadan.

Best regards,

[Your Name]

Corporate gifting list

Iftar or suhoor restaurant list

  • Asateer Tent at Atlantis the Palm
  • Sufra
  • The Majlis
  • Allo Beirut
  • Hutong
  • Terrace on the Corniche at St. Regis Abu Dhabi
  • The Royal Majlis
  • Eunoia By Carine
  • Bombay Bungalow
  • Brasserie Boulud
  • Ibn AlBahr
  • Al Falak Ballroom
  • Karam Al Bahr

Company catering list

  • Ogram
  • Blast catering
  • Eat catering
  • The Majlis
  • Dish

Conclusion

Ultimately, providing Ramadan benefits demonstrates an employer and HR's commitment to promoting diversity and religious freedom in the workplace.

It also helps create a sense of community among employees that can lead to increased morale, collaboration, communication, and overall productivity.

By offering an employee benefits program during the holy month of Ramadan, employers can show their dedication to creating a supportive and inclusive environment for all of their employees, regardless of faith or background.

Ramadan benefits can thus be an important part of workplace culture, helping to create a positive atmosphere in which everyone feels welcome, respected, and valued.

5
All
Guides
October 30, 2023

Mohammed Ridwan

A Guide to Improve Internal Control Over Financial Reporting

Internal control over financial reporting (ICFR) refers to the legal obligation of a company to provide accurate financial statements. It requires you to adopt policies and processes that show the true picture of the company's finances. This involves:

  • Avoiding errors, fraud, or omissions 
  • Meeting deadlines 
  • Reviewing statements regularly.

An example of ICFR is inventory control, which involves maintaining accurate records of the company's goods. This requires adopting practices such as:

  • Maintaining documents, such as receipts, shipments, and adjustments
  • Segregating duties to different individuals or teams for handling, recording, and verifying inventory
  • Matching physical inventory counts with recorded inventory levels
  • Valuing inventory in accordance with generally accepted accounting principles (GAAP) principles, such as FIFO, LIFO, or the weighted average method.

These practices minimize the risk of inventory discrepancies and enhance the accuracy of financial statements.

What is the Purpose of ICFR?

ICFR is mandatory as per the Foreign Corrupt Practices Act (FCPA) of 1977 and the Sarbanes-Oxley Act (SOX) of 2002.

FCPA requires public companies to establish and maintain accounting controls. This reasonably ensures that financial statements comply with GAAP.

SOX takes this a step ahead and mandates public companies to assess the effectiveness of ICFR efforts and share the results with the public. Additionally, it demands large companies to get independent auditors for the evaluation.

Why is Internal Control Over Financial Reporting Important?

ICFR’s purpose is not restricted to being a statutory obligation. Here are five reasons why ICFR should be on your priority list:   

Accurate Financial Statements

ICFR ensures accurate financial statements that reflect the company's financial position and performance. Such reports enable investors, creditors, and internal management to make informed decisions.

Error Reduction

ICFR emphasizes the use of automation, standardized procedures, and clear documentation. This reduces the risk of errors due to human oversight, saving time and resources.

Preventing Fraud and Misconduct

ICFR employs strategies such as segregation of duties, multiple approvals, and regular audits. This reduces the chances of oversight and ensures employees do not engage in fraudulent activities.

Reliability

Stakeholders (including investors and creditors) rely on financial reports to assess a company's performance. Effective ICFR policies build confidence in the company's financial reports. 

Avoiding Costly Errors

ICFR detects errors and discrepancies before they can escalate into expensive matters. This saves significant expenses and protects its long-term viability. For example, identifying accounting errors eliminates the need for financial restatements.

What are the Components of Internal Control Over Financial Reporting? 

There are five main components of internal control over financial reporting. These are defined by the Committee on Sponsoring Organizations (COSO) of the Treadway Commission. 

These five components are also known as the COSO framework.

Control Environment 

The control environment includes the organization's standards, processes, structures, and values. It comprises:

  • Ethical values of the organization
  • Organizational structure and authority workflow
  • Processes to build a competent team
  • Focus on performance measurement, incentives and rewards.

These elements create an environment that fosters internal control in the organization.

Risk Assessment 

Risk assessment is an agile process for identifying and assessing risks. It involves:

  • Identification of potential risks that impact the ICFR efforts. This includes both internal and external risks.
  • Evaluation of the potential impact of identified risks. Some risks have a higher likelihood and a greater impact than others.

For instance, an internal risk could be employees intentionally inflating their expense reports to receive higher reimbursements. The potential impact will be financial misstatements if the risk goes undetected. 

Control Activities 

Control activities refer to the plan of action to address the risks identified during risk assessment. This requires establishing specific policies and procedures, such as:

  • Segregation of duties to prevent fraud and collusion
  • Controls in information security, application development, and system maintenance
  • Implementation of entity-level controls, such as reviewing differences between planned budget and expenditure
  • Employing preventive control, such as limited access to IT systems and automated approvals
  • Using detective control to identify misstatements via reconciliations and management review controls

One such example would be accounts payable automation to eliminate manual data entry. For instance, an OCR-based automation tool will improve receipt retrieval if there are recurring manual errors.

Account payable automation to eliminate manual data entry

Information and Communication 

Information and communication ensure that key stakeholders know their roles and responsibilities. It involves:

  • Defining expectations from each stakeholder in the financial reporting process
  • Educating employees on ICFR policies, procedures, and compliance requirements
  • Providing channels for reporting concerns and issues related to ICFR.

An example would be communicating reimbursement policies to manage company spending. These rules set clear limits and expectations for employees. 

Hence, if the policy says entry-level employees can't claim travel expenses, they should not submit such expenses for reimbursement.

Monitoring Activities

Monitoring activities involve regular review of financial controls and processes to identify and rectify issues. It includes the following steps:

  • Review expense reports, receipts, and other data to verify the accuracy.
  • Test sample data to ensure that controls are operating as intended.
  • Detect unusual patterns or anomalies in the data.
  • Verify that employees are following established policies and procedures.

One such example would be reviewing travel expense reports as a part of expense management. It involves verifying receipts and approval compliance. Any detected exceptions trigger investigations and corrective actions.

A Better Way to Manage Internal Control Over Financial Reporting

Setting effective policies for ICFR requires financial data visibility and proper reconciliation processes. Hence, achieving this demands more than policies and procedures. 

You need software to support operational efficiency transformation. Here is how Pluto offers a helping hand to get better control over your ICFR efforts: 

Seamless Financial Reporting 

Real time financial reporting with Pluto

Pluto generates detailed financial reports, providing more accurate and effective financial reporting. You can automate the process of data entry with OCR-based receipt capture. This reduces the manual errors and ensures accuracy. 

A multi-layer approval workflow ensures that financial transactions are reviewed and authorized on time. This helps you comply with company policies, enhancing control and accuracy.

The seamless integration with accounting software provides real-time data sync. This keeps the data up-to-date, enabling faster report generation.  

Simplify Financial Audit 

Simplify financial audit with Pluto

Pluto centralizes financial data, enhancing auditing capabilities.

Document management becomes simple with the easy uploading and retrieving of financial records. You can bulk download all audit logs and supporting files in a single click. This eliminates the time-consuming task of searching for and gathering individual paperwork. 

Pluto's automated systems keep expense records for all financial transactions. As a result, auditors can trace every step of the transaction, ensuring transparency and accuracy.

With end-to-end encryption, Pluto meets bank-grade security standards to safeguard sensitive financial information. This ensures the safety and easy accessibility of financial data. 

Accounts Payable Automations 

Automate your accounts payable

Pluto automates the accounts payable (AP) process to simplify procurement and payments. From purchase request (PR) to goods received notes (GRN) matching, you can streamline the entire AP process. 

Multi-layer approval workflows accelerate purchase requests and approvals. The purchase order (PO) process becomes faster with custom workflows and ERP integration. 

Pluto automates the entire invoice management process. OCR technology makes it easy to capture and auto-fill invoice details, ensuring accuracy and speed.

Pluto's cash flow management features provide alerts for upcoming payments. This enables you to schedule payments and avoid penalties. 

Budget Control 

Advanced budget control with Pluto

Pluto enables budget control by facilitating spending limits and approval workflows. 

Not only can you decide the limit for corporate cards, but also reject an expense if it goes against company policies. In contrast, you can also approve the spending limit for legitimate expenses.  

This ensures that employees adhere to predefined budgets. Moreover, this gives your finance teams immediate visibility into spending against budgeted amounts. 

ERP Integration  

Integrate your ERP with Pluto

Pluto's ERP integration streamlines vendor management and fosters an efficient control environment.

It imports vendor lists from your ERP and exports them back. This reduces data discrepancies and duplicates, leading to data consistency.  

Pluto's dashboard further makes tracking invoices and payments straightforward. This simplifies the payment and reconciliation process, preventing any errors. 

Expense Management  

Expense management with Pluto

Pluto automates and simplifies expense management processes. 

Each expense prompts a WhatsApp notification for employees to upload receipts. Administrators and managers also receive notifications to approve expenses. Approved expenses get reimbursed immediately to employees' bank accounts.

This seamless approval workflow ensures proper control and accurate financial reporting. 

Go Beyond Statutory Obligations

ICFR is not just a legal compliance. It is a practice to ensure financial visibility and control. While implementing policies and procedures is the main focus, finding the right tools to support your journey will make the process easier.

Pluto automates your financial processes to reduce manual errors and accelerate reconciliation. You close books 10X faster with more confidence. 

Book a demo today, and see how Pluto gives you better control and visibility from day one!