Re: Change Over Methodology for a "New" Company Ownership

Paul, Setting up a new company has two key drawbacks: (1) Setting up tables
and transferring data is a real hassle; and (2) It does not solve the pre
and post acquisition separation problem for PUR and the Mfg applications.

Here a some things you can do to have a clean cutoff without resorting to a
separate company:

1 - IFM lets you have an infinite number of accounting periods and they do
not have to start on any particular date. So, you can get a clean G/L cutoff
by setting up a new period with the start date equal to the acquisition
date. If you do this and use FRx for reporting, you have to reset the period
structure that FRx uses. You can use techniques similar to those used for
cash flow statements to artificially create an opening balance as of the
acquisition date. You can then have separate financial statements for the
"old" and "new" companies.

2 - You can use separate personal ledgers to record pre and post acquisition
sales and purchases. On the COM side, this means that the customer numbers
used for post acquisition sales will have a different COM suffix. This may
be a hassle up front, but programmers will bless you when they have to
create pre and post acquisition reports. If you go down this path, be sure
to base G/L account assignment rules on the personal ledgers that you use
for pre and post acquisition activity.

On the A/P side, your people will have to know whether an invoice relates to
pre or post acquisition activity. Then, they will assign it to the pre or
post acquisition personal ledger as needed.

3 - I suggest that you set up a separate bank account and cash book to
receive and make payments for pre-acquisition sales and purchases.

4 - I would use manufacturing order accounting classes to distinguish
between pre and post acquisition MO's and set up my G/L account assignment
rules accordingly.

5 - Finally, you should consider having a pre-acquisition environment that
captures the MAPICS database at the last moment before aquisition. This
makes it possible to create queries that can distinguish between pre and
post acquisition activity. It will be very helpful when the "unexpected"
happens.

Bob Tenney
Bob Tenney Solutions, LLC
MAPICS - FRx - Presence - Crystal Reports
828-526-8976

Visit www.tenneypubs.com for books about
IFM, COM, G/L Interfaces
Info WorkPlace, Cost Accounting,
FRx, and PRESENCE
----- Original Message -----
From: <paul.connolly@xxxxxxxxxxxxx>
To: <MAPICS-L@xxxxxxxxxxxx>
Sent: Wednesday, July 30, 2003 4:38 AM
Subject: Change Over Methodology for a "New" Company Ownership


> Hello
>
> The company I work for is in Administrative Receivership. The plan is to
> sell it as a going concern. Whoever buys us is likely to want a clean,
> financial cut-off from the old legal entity to the new legal entitiy.
> However, there will be outstanding customer payments still to be received
> for the goods sold under the old legal entity and other financial
> transactions to consider.
> Given that we remain on MAPICS XA what are the options to:
>
> 1) Provide a clean financial cut-off?
>
> 2)The knock-on considerations in terms of open customer orders, purchase
> orders, etc?
>
> The Accountant has thought about creating another 'company' in both IFM
and
> COM. However, I am also concerned with the supply chain processes of
> Purchasing, Customer Order Management, etc.
>
> Any advice would be appreciated.
>
> Best regards
>
> Paul
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