Period Close Automation
Consistency, efficiency and reliability
together to help you close faster
Daryl Geryol, GRC Practice Director
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© 2009 KBACE Technologies, Inc.
Compliance and Automation research
• ….thoroughly vet existing business processes, and 43 percent want to further automate manual controls,
especially for compliance-related reconciliation and security procedures. (IT Compliance Institute- Electric SOX:
Companies Turn to Automation)
• The closing process itself often poses barriers to timely completion. In many companies, closing the books is a
tacit process: “everyone knows” what he or she has to do…. (“A Fast, Clean, Close” Software Magazine January 2007)
• With new audit demands, requirements that the CFO and CEO sign off on the numbers, and additional
government reporting regulations, it is not surprising that a recent Business Process Management Initiative
survey of about 350 companies said that close times increased by at least a week in 2005, and as much as two
weeks last year. (“The benefits of a fast close “ InfoWorld February 2007)
• To reduce the risk of noncompliance and accrue the benefits of a faster close, Ventana Research advises
corporations to remediate the root causes of delay in their accounting close and adopt an explicit method of
process management that includes more automation, checklists, workflow and other aspects. (“A Fast, Clean,
Close” Software Magazine January 2007)
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© 2009 KBACE Technologies, Inc.
Is this your organization during period close?
The west inventory org
ran the wrong reports!
When exactly will we
have the period
closed and final
reports?
We need IT to get us a
backup copy!
Is This organization prepared to:
• Drive Strategy and Growth?
• Perform at World-Class Level?
Senior
Management
• Enhance Investor Confidence?
Inventory
Management
Where is
everyone at on
the checklist?
Have all reports
been run?
Have all sub ledgers
posted?
Accounting
Department
Closing
Team
Have we interfaced all
receivables?
Identify and Review Uninvoiced Receipts
Has all receiving completed?
Accounts
Payable
Accounts
Receivable
Have all orders been
entered and shipped?
Have all posted items
been reviewed?
Procurement
System
3
Sales
System
© 2009 KBACE Technologies, Inc.
The reason to automate period closeTypical period close checklist(s)
• Efficiency
•
Identify bottlenecks
•
Enable parallel activities
•
Simplify the process by automating what is
possible
Eliminate errors and redundancy by
enabling the system to manage tasks
• Communication
•
•
Increase and track communication
•
Initiate tasks from approvals
Manage interfaces directly instead of IT
• Audit ability
•
4
•
Monitor each task
•
Track all communication and comments
•
Enable period close history and reporting
© 2009 KBACE Technologies, Inc.
Period Close Automation (PCA)
• PCA is a framework of business rules created by
KBACE as a solution to automate period close
activities using workflow technologies
Period Close Automation
• PCA is flexible in supporting and scaling for multiorg
and many inventory orgs without adding complexity
• Embedded within the Oracle E-Business suite
• Utilizing the Oracle Workflow engine, Oracle reports
and programs and business rules defined in Oracle
GRC Controls
Oracle E-Business Suite
AP
GRC
PO
AR
GL
Controls: Application, Transaction, Preventative
• Leverages the GRC controls suite to implement
controls to FIX issues that impact the period close
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© 2009 KBACE Technologies, Inc.
Period Close Automation- KEY COMPONENTS
•Global configuration of the close process
Configuring the •Identifies organizations, applications and key personnel
Close process
•Match the KBACE “process” to your Period close process
•Take the KBACE process and alter sequence to happen in parallel
Defining the
Close process •Add, remove and sequence tasks
Initiating the
Close Process
•Initiate the close for all entities in a process from a Period Close workbench
•Monitor the status of the close or view prior close history from a single workbench
•Identify - who approved, was notified, close report ids and how long it took for any task
Managing and
Monitoring the •Document your close with standard reports
Close
•Eliminate issues that affect the close by preventing them in real-time
Eliminating the •Automate activities that are executed manually during the month
pain that
affects the
Close
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© 2009 KBACE Technologies, Inc.
Configuring the PCA Close Process
• KBACE adds a bolt-on form to centralize the configurations defining
• The process by Set of Books
7
•
Included Operating units and inventory organizations by application
•
Reporting Users and Responsibilities
•
Notification recipients
•
Approvers recipients
•
Additional Data
© 2009 KBACE Technologies, Inc.
Configuring the PCA Close Process
Communications
• Communications are key to the process. Standard approval and notifications are sent out through the period
close process.
• Notification and Approval text can replaced simply with customer verbiage to communicate effectively
• Additional notifications and approvals can be added to keep teams in the know
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© 2009 KBACE Technologies, Inc.
Defining the PCA Close Process
• Customer can change the process sequences to control synchronous and
asynchronous workflow processing
• Additional tasks, approvals, notifications or reports can be added to the PCA
process to meet each customers business needs
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© 2009 KBACE Technologies, Inc.
Initiating the PCA Period Close Process
• KBACE adds a bolt-on Oracle form to provide a workbench initiate the
period close process
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•
Find the process or set of books that should be closed
•
Select the available period that should be closed
•
Press the Launch button
© 2009 KBACE Technologies, Inc.
Key Features
Reporting
• Oracle reports and processes are automatically run at the
correct time with the correct parameters dynamically. No
user intervention is needed.
• Reports are run per each operating unit and inventory
automatically without the need of complex request sets and
scheduling.
• An organization with 30 Operating units will run the same
financial reports 30 times. PCA will eliminate redundant
tasks
Notifications
• Instead of manual emails or paper checklist , system
generated notifications inform the teams and record the
communication
• Approvals and comments are recorded and allow tasks
such as Period open and close to proceed or to
acknowledge manual tasks like reconciliation are
completed
• Constraints check conditions in the system to be sure
activities are happening as planned such as periods closing
or records stuck in interfaces
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© 2009 KBACE Technologies, Inc.
Key Features
Interfaces
• Interface tables are reviewed and records are sent for
review in simple table formatted notifications
• Resubmit non-errors through notifications to clean
interfaces faster
• Eliminate IT run sql scripts that report interface errors
allowing IT to tend to other business
Automation
•Periods are opened and closed as approvals are received
•Oracle forms to manage periods are set inquiry only
•The complete process is an audit trail of the period close
activities
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© 2009 KBACE Technologies, Inc.
Managing and Monitoring the Period Close
• Customers have a real time view of the
process
•
By Process
•
By Period
•
By Operating unit
•
By Organization
•
Filter any field in the form!
• The begin and end times of each task are
recorded so bottlenecks can be studied or
compared to previous closes
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© 2009 KBACE Technologies, Inc.
Managing and Monitoring the Period Close
• KBACE’s GRC solution gathers workflow process data for tracked processes and calculates metrics
•
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Total time of the Period Close Process (by Operating Unit)- to help measure the close against a past close.
© 2009 KBACE Technologies, Inc.
Managing and Monitoring the Period Close
• KBACE’s GRC solution gathers workflow process data for tracked processes and calculates metrics
•
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Task detail (for audit purposes)- identify bottlenecks or use as an audit of the period close process.
© 2009 KBACE Technologies, Inc.
Eliminating the pain that effects the close!!
• Day to day issues find their way into the close and cause lengthily reconciliation and issue review
• Issues account for a measurable percentage of cost for a company’s close
•
How many issues dare found in an average month?
•
How many man hours are required to revolve the issues?
• The GRC control suite provides the business rule engine to enforce transaction integrity and help
eliminate errors that then get into the period close.
• Typical issues may include:
•
Incorrect accounts are used in Inventory
•
Shipments have physically left yet the transactions were not completed
•
Errors remain in interfaces
•
New Job s are defined and not yet given standard rates in projects
•
MORE AND MORE AND MORE….
SEE THE FOLLOWING SLIDE EXAMPLES
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© 2009 KBACE Technologies, Inc.
Eliminating the pain that effects the close!!
• Day to day issues find their way into the close and cause lengthily reconciliation and issue review
• Issues account for a measurable percentage of cost for a company’s close
•
How many issues dare found in an average month?
•
How many man hours are required to revolve the issues?
• The GRC control suite provides the business rule engine to enforce transaction integrity and help
eliminate errors that then get into the period close.
• Typical issues may include:
•
Incorrect accounts are used in Inventory
•
Shipments have physically left yet the transactions were not completed
•
Errors remain in interfaces
•
New Job s are defined and not yet given standard rates in projects
•
MORE AND MORE AND MORE….
SEE THE FOLLOWING SLIDE EXAMPLES
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© 2009 KBACE Technologies, Inc.
Manage List of Values (LOV)
Create NEW List of Values or Filter existing lists
Before
Transact to /from any subinventory
• Filter LOVs to make them more context related
• Make global lists more localized
• How about adding language translation in Oracle Projects
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© 2009 KBACE Technologies, Inc.
Manage List of Values (LOV)
Create NEW List of Values or Filter existing lists
After
Dropship subinventories removed
• Filter LOVs to make them more context related
• Make global lists more localized
• How about adding language translation in Oracle Projects
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© 2009 KBACE Technologies, Inc.
Embedded Security
Apply security controls to enforce business policy
Before
Rate can be
implemented over
any time period
•
•
•
•
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Granular user interface restrictions (block, field, tab)
Restrict access to data or actions
Embedded controls that enforce security and business process
Contextual control (by responsibility, profiles, data field, etc.)
© 2009 KBACE Technologies, Inc.
Embedded Security
Apply security controls to enforce business policy
After
Interest rate is
disabled due to
validation
•
•
•
•
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Granular user interface restrictions (block, field, tab)
Restrict access to data or actions
Embedded controls that enforce security and business process
Contextual control (by responsibility, profiles, data field, etc.)
Message enforcement,
lets users know what
they need to do
© 2009 KBACE Technologies, Inc.
Embed Notification and Approval processes
Automate business processes, Fraud analysis, Reporting
• Implement processes for vendor or customer creation
• Replace email or paper routing approvals and do setup online
• Self document and automate business flows
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© 2009 KBACE Technologies, Inc.
Embed Notification and Approval processes
Automate business processes, Fraud analysis, Reporting
Replace this manual email
with ….
• Implement processes for vendor or customer creation
• Replace email or paper routing approvals and do setup online
• Self document and automate business flows
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© 2009 KBACE Technologies, Inc.
Embed Notification and Approval processes
Automate business processes, Fraud analysis, Reporting
An automated routing..
Workflow generated email
with context Security and
accountability on the process
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© 2009 KBACE Technologies, Inc.
Embed Notification and Approval processes
Automate business processes, Fraud analysis, Reporting
Alternate name
used to track the
status. Also
disabled
Automatically
inactive and
disabled
• Implement processes for vendor or customer creation
• Replace email or paper routing approvals and do setup online
• Self document and automate business flows
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© 2009 KBACE Technologies, Inc.
Period Close Cost / Savings analysis (example customer)
Category
IT Support
IT Support Total
Managing the Close process
Application Area
General Ledger
Inventory
Payables
Projects
Purchasing
Receivables
General Ledger
Inventory
Payables
Projects
Purchasing
Receivables
Managing the Close process Total
Reporting & Process Execution
General Ledger
Inventory
Payables
Projects
Purchasing
Receivables
Reporting & Process Execution Total
System / Process Issues
General Ledger
Inventory
Payables
Projects
Purchasing
Receivables
System / Process Issues Total
Grand Total
Effort (avg
hrs)
4
32
16
16
8
16
92
2
66
6
12
6
36
128
4
42
15
12
6
13
92
4
10.42
68
126
51
12
271.42
583.42
Cost ($$)
$180
$1,440
$720
$720
$360
$720
$4,140
$90
$2,970
System /
$270
Process
Issues
$540
$12,214
$270
$1,620
$5,760
$180
$1,890
$675
$540
$270
$585
$4,140
$180
$469
$3,060
$5,670
$2,295
$540
$12,214
$26,254
Average Cost to Close
IT Support
$4,140
Managing the
Close process
$5,760
Reporting &
Process
Execution
$4,140
** Cost does not include reconciliation
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© 2009 KBACE Technologies, Inc.
Period Close Cost / Savings analysis
• Effort required to manage the close can reduced at least 75% with online tracking of tasks and
reports
• Managing the close can Managing the close process includes
• Tracking period close checklists
• Communicating through email
• Auditing tasks
• Ensuring the close is complete and consistent
• Most organizations
• Document their close process offline
• Communicate through email
• Have no way to audit the process
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© 2009 KBACE Technologies, Inc.
Period Close Cost / Savings analysis
• IT support time can be reduced nearly 40% by automating interfaces during and at the end of the
period so that users always see what may be in process or stuck.
• IT support activity can make up a large part of the cost to close the books.
• Issue found during the month at close can take both business users time and IT.
• Issues requiring normally requiring IT
• Root cause analysis
• Data Cleanup
• Report runs
• Support time from IT is increased by
• Transaction integrity issues
• Interface records in error
• Difficulty in getting transaction complete
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© 2009 KBACE Technologies, Inc.
Period Close Cost / Savings analysis
• Reporting is a semi-manual non-value process that can at least 95% automated
• Reporting is not overly expensive but it is necessary in order to reconcile
• Reports may be run at the wrong time
• Parameters could be incorrect
• A company with 5 Operating Units and 30 Inventory organizations
• Run an average of 150 inventory reports (30 X 5)
• Run reports in AR, AP and PO at least 5 times
• Manual processes inside oracle add no-value yet account for valuable time
• Open and close of all periods
• Checking interfaces or verifying certain tasks are complete
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© 2009 KBACE Technologies, Inc.
Period Close Cost / Savings analysis
• Many issues can be prevented 100% and can reduce the cost of issue to
the close more than 60%
• Most issues exist throughout the period and can be prevented with the
correct automated controls
• Some issues may actually stop the close process in it’s tracks and cost
the process 1 complete day
• Issues can be come unpredictable in cost if many resources get involved.
• Preventing the issues throughout the month will ultimately increase
productivity during the month and make the reconciliation easier where
the issues may not have actually impacted the close tasks.
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© 2009 KBACE Technologies, Inc.
Period Close Cost / Savings analysis
Average Saving (%)
Estimated Cost ($$)
Cost ($$)
60%
$1,988
38%
$2,268
$4,140
Average cost
savings of nearly
70% !!
75%
$1,440
95%
$12,214
$5,760
$405
$4,140
IT Support
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Managing the
Close process
Reporting &
Process
Execution
System /
Process Issues
© 2009 KBACE Technologies, Inc.
Period Close Cost / Savings analysis
Category
Estimated
Annual ($$)
Estimated
Cost ($$)
Average Saving (%)
Estimated (Annual
$$)
IT Support
$4,140
$49,680
$2,268
38%
$596,160
Managing the Close process
$5,760
$69,120
$1,440
75%
$829,440
Reporting & Process Execution
$4,140
$49,680
$405
95%
$596,160
System / Process Issues
$12,214
$146,567
$1,988
60%
$1,758,802
Grand Total
$26,254
$6,101
67%
Annualized Cost
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Cost ($$)
$315,046.80
$68,355
© 2009 KBACE Technologies, Inc.
Case Study- Period Close Automation
Company Overview
• World leader in Wireless technology and Services
• Oracle E Business Suite with multiple operating units and
growing
• “Top Closer” as cited by CIO Magazine 2007
The Challenges
• Executive direction to keep the close to 2 days
• As a growing organization the process had to be flexible to
serve dozens of operating units
• A solution had to promote parallel processing and notification
and approvals
The Results
• Implement a PCA solution using GRC Applications
• Reduce the overall close cycle through parallel processing
• Reduce the effort in running reports and potential misreporting by automating the reports and parameters
• Automate the action to close and open periods via
workflow approvals
• Provide notification and tracking throughout the process
Recommended Solution
• Automate the entire process to enable a single key to launch a
simultaneous close process across all operating units.
• Secure forms from manual operating and eliminate manual
report runs
• Convert offline checklists to a systemic process
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© 2009 KBACE Technologies, Inc.
ROI
Automate
repetitive tasks
and reporting
Auditable &
Measurable
Feature Summary
Eliminate manual
tasks
Highly
configurable
and scalable
Built on
Oracle
technology
34
•Sequence
processes
meet
your
•Oracle
workflow
•Eliminate
mis-reporting
•Control
Period
status to
with
Approvals
•Oracle workflow
business
•GRC
Application
•Run reports
at theControls
correct
time errors
•Check
interfaces
and
resubmit
•GRC Application
Controls
•Begin
with a standard
framework
•GRC
Intelligence
•Rid yourself
of redundant
•Eliminate
IT run
exceptionreport
scriptsruns
•GRC
Intelligence
•Support
many
operating
units and
and
complex
reports
scheduling
organizations
with ease
•Eliminate manual
Oracle reporting
© 2009 KBACE Technologies, Inc.
Built on
Oracle
technology
35
•Oracle E-Business suite
•Oracle workflow
•Oracle workflow
•GRC Application Controls
•GRC Application Controls
•GRC Intelligence
© 2009 KBACE Technologies, Inc.
Highly
configurable
and scalable
Built on
Oracle
technology
36
•Sequence processes to meet your
businessworkflow
•Oracle
•BeginApplication
with a standard
framework
•GRC
Controls
•Support
many operating units and
•GRC
Intelligence
organizations with ease
© 2009 KBACE Technologies, Inc.
Eliminate manual
tasks
Highly
configurable
and scalable
Built on
Oracle
technology
•Control Period status with Approvals
•Oracle workflow
•Check interfaces and resubmit errors
•GRC Application Controls
•Eliminate IT run exception scripts
•GRC Intelligence
•Eliminate manual Oracle reporting
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© 2009 KBACE Technologies, Inc.
Eliminate manual
tasks
Highly
configurable
and scalable
Built on
Oracle
technology
38
Automate
repetitive tasks
and reporting
•Eliminate mis-reporting
•Oracle workflow
•Run reports at the correct time
•GRC Application Controls
•Rid yourself of redundant report runs
•GRC
Intelligence
and complex
reports scheduling
© 2009 KBACE Technologies, Inc.
Eliminate manual
tasks
Highly
configurable
and scalable
Built on
Oracle
technology
39
Automate
repetitive tasks
and reporting
Auditable &
Measurable
•Approval processes
•Oracle workflow
•Reporting
•GRC Application Controls
•Tracking / Metrics
•GRC Intelligence
© 2009 KBACE Technologies, Inc.
ROI
Eliminate manual
tasks
Highly
configurable
and scalable
Built on
Oracle
technology
Automate
repetitive tasks
and reporting
Auditable &
Measurable
•Ensures consistency and reliability,
reducing errors
•Oracle workflow
•Leverages resources more efficiently,
•GRC Application
allowing
the focus Controls
to shift to new
business
•GRC Intelligence
•Reduced the overall effort and cost of
period close
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© 2009 KBACE Technologies, Inc.
Real world examples
Sales Order Workflows
Flexible WF holds to support
order approvals, credit
checking
Form Security
Conditional inquiry only
Data masking, hiding ,
protecting
Supplier Mgmt
Automate the vendor
creation / change process
Payables Approvals
Approval processes
for invoices, batches
and payments
Configuration Monitoring
Monitor and document system
configuration and changes
Filter LOVs
Establishing security
for Customers /Suppliers
Filtering LOVs conditionally
Process Automation
Period Close Automation
Period close process reporting
Preventive Provisioning
Segregation of Duties
High risk or Super user access
Data Migration
Migrate configurations,
setups, security settings and
remediation work
Data Privacy
Secure and report when data
has been accessed while not
being altered
Inventory Mgmt
Item creation automation
Item change process
Automate attributes or costs
User Access Controls
User Access Review (quarterly
certification)
Employee setup exceptions
Employee de-provisioning
De-Customize
Enhance the user experience
Replace custom.pll, form
personalizations, workflows
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© 2009 KBACE Technologies, Inc.
Our GRC Services
We are the leading provider of Governance, Risk and Compliance solutions.
Business Process
optimization
Process review
Optimization and
automation
Data Privacy and Security
Mask or Secure data
Audit viewed data
PCI, SSI, PII
Configuration
Management
Change control
Auditing / Monitoring
Migration and
documentation
Risk / Control Reviews
Health checks
Risk Control matrix
GRC Manager
Help desk ticket review
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Control Automation
Suspect transaction
monitoring
Detection and prevention
Operation Excellence
Sustainable Compliance
Segregation of Duties
Analysis
Policy review
Remediation
Reporting
Preventive Provisioning
© 2009 KBACE Technologies, Inc.
KBACE GRC Accelerators
KBACE GRC Accelerators help customers to gain immediate value. Many of these must have, best
practice, time saving Accelerators can be implemented out-of-the box.
Period Close Automation (PCA)
• KBACE built period close automation process
• Includes process auditing
• Process metrics report
Item Creation Automation
• Automate the item creation process
• Assign items to orgs
• Automate org level costs or attributes
User Access Review
• Quarterly certification of user access
• Manager accountability
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© 2009 KBACE Technologies, Inc.
KBACE GRC Accelerators
GRC Controls- Change controls
• Change control on GRC Controls
• Monitor changes to GRC Controls for audit reporting
System Administration controls
• Best practice controls for security
• Change control and auditing key FND tables for system security
Employee De-provisioning
• Automatically end user access upon termination
• Reassign open notifications
• Report current roles assignments affecting WF approvals
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© 2009 KBACE Technologies, Inc.
KBACE GRC Accelerators
Data Masking
•Prebuilt rules for masking, hiding and protecting SSN data
•Field level controls
•List of values masking
General Ledger posting SOD rules
•GL security rules to allow JE creation and posting without Segregation
of Duties
Payables payment approvals
•Prevent Payment of Invoices without approval
•Select from a list of approvers.
•See invoices waiting for approval
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© 2009 KBACE Technologies, Inc.
Questions & Answers
For more information / demonstration
Daryl Geryol
Practice Director - GRC Services, KBACE
O- 262.649.2916
[email protected]
www.kbace.com
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© 2009 KBACE Technologies, Inc.