We have touched on the importance of auditing pricing and deal construction processes before. In our previous article on the benefits of putting your approvals into a CPQ system, we referred to the audit trail that can be logged and generated by a well-designed CPQ system, and the benefits don’t stop there. In the next part of our exploration into the real value of CPQ, we’ll go a little deeper into the many ways CPQ can assist your organisation’s auditability.
If you are in an area of a business that gets audited, we’re sure it’s not something that you look forward to. Being audited takes up a lot of time and can be worrying as something could be unearthed that gets your department into trouble. There is the chance that your practices could be exposed as in need of improvement, and finally, it’s a real pain to dig through old documents and folders to try and piece together the story of why someone did what they did especially when it was several years ago.
However, we know audits are a necessary evil and are needed for our organisation to prosper and we dread the thought that our company might be caught up in a scandal like mis-selling of pensions or PPI (payment protection insurance), or serious accounting frauds like Enron.
In fact it was scandals like Enron’s that gave rise to stricter audit requirements in the early 2000s, and the rise of legislation like Sarbanes-Oxley (SOX) which set out a high standard required for internal controls, and much tougher penalties for board members who fail to ensure that financial statements are accurate. The role of pricing decisions (e.g. who authorised what and when), and the accuracy of revenue reporting becomes paramount when evidencing compliance with audit arrangements such as this.
At this point, a CPQ system can be the simple answer to your audit needs. All requests for discount, and the way revenue is allocated across products and services is documented. All approvals can be attributed to an individual, time stamped and with reasons captured at the time of approval. More importantly the ability to show an auditor the entire history of a decision and to follow the breadcrumbs from a signed deal all the way to reported revenue at the click of a button means you have nothing to hide, and a clear understanding of the decisions. This is music to an auditor’s ears. It builds confidence in the process and means any anomalies can be quickly analysed too.
When you have all this information securely stored in the cloud, under access control to only those who really need it, and a tamper-proof process that means it is designed with integrity in mind, it makes the process of passing an audit so much easier. All the anxiety and pain we mentioned above just disappears. Auditors are no longer the enemy, and you will find they can actually help advise on improvements to the rules in your system to make future audits even more enjoyable. Yes, that’s right, enjoyable audits!
So CPQ is an auditors friend, and an auditees friend too. It doesn’t just apply to the big-scale audit requirements like SOX, but any organisation that is auditable – whether you’re a telecommunications company affected by IFRS 15, an organisation impacted by GDPR or any one of a thousand other guidelines, rules or quality policies that get checked – having data and decisions stored in a CPQ system will make you appreciate audits too.
The series “What CPQ Can REALLY Do For You” is written by Walpole Partnership’s MD, Andy Pieroux.
Don’t miss out on further parts in this series which can be found on the news section of Walpole Partnership’s website.