Hi all

I have a doubt and hope you can help me.

For me and for some of you who are experienced ÍSO´s.

In my bussiness Into the Product realization, I consider
core Processes= Commercial, Engineering,manufacturing, Delivery and post-delivery support

Sub processes or supporting processes
IT, Training, Human Resources. Accounting.

My doubt is although Accounting is in charge of Payments, payments in advance, Sending invoices to clients, etc.

But particularly in my bussiness, if We don´t have the money in our pockets, we can´t start the planning nor the manufacturing, etc.
Then the process is stopped.

In this angle, It seems is an important link in the chain.

Then the accounting Dept. will be a Core process or Support process?
Although they don´t participate directly in the product manufacturing
Really their function is important.


Thanks to all

You decide. If you think that Finance should be a Core Process, then it is. It's nice and perhaps helpful to classify processes, but it is not required. It's your system, so you and your colleagues should decide how to put it together.

Stijloor.

I have rarely seen finance involved. Do any of you here include Finance as a core process in your QMS? Any examples or discussion?

*I assume we're talking QMS system aspect here.

I forgot this... Accounting in ISO 9001 (http://Elsmar.com/Forums/search.php?do=process&titleonly=1&query=accounting)

if We don´t have the money in our pockets, we can´t start the planning nor the manufacturing, etc.
Then the process is stopped.

In this angle, It seems is an important link in the chain.


Finance is nearly always critical to quality. Section 6 of the Standard charges management to provide the resources and infrastructure needed to meet customer requirements and maintain the QMS. Finance is how you insure provision of these resources, and accounting is how you keep track of how they are being used. And these functions also provide support to and measures for (KPIs) many other critical processes: Purchasing, Collections, Human Resources, etc. etc.

But particularly in my bussiness, if We don´t have the money in our pockets, we can´t start the planning nor the manufacturing, etc.
Then the process is stopped.

Don't you consider this factor when carrying out contract review? Do you look at your capability and capacity? If you need to worry about it later, it may be too late!

How deep are ISO 9001 auditors going into finance these days?

Finance is nearly always critical to quality. Section 6 of the Standard charges management to provide the resources and infrastructure needed to meet customer requirements and maintain the QMS. Finance is how you insure provision of these resources, and accounting is how you keep track of how they are being used. And these functions also provide support to and measures for (KPIs) many other critical processes: Purchasing, Collections, Human Resources, etc. etc.0.4 Compatibility with other management systems
This International Standard does not include requirements specific to other management systems, such as those particular to environmental management, occupational health and safety management, financial management or risk management. However, this International Standard enables an organization to align or integrate its own quality management system with related management system requirements. It is possible for an organization to adapt its existing management system(s) in order to establish a quality management system that complies with the requirements of this International Standard.
How many times?

As many times as artificial lines are drawn.

As many times as artificial lines are drawn.Ah, ok. The salad buffet approach to ISO 9001. Let's pick and choose the requirements we like, disregard the ones we don't. Add some dressing (such as non-existent requirements), toss it.

:D

Yep. Exactly. That's what those that manage must do, Sidney, despite misguided advice or silly attempts at putdowns.

What is the difference between core process and core business? If the meaning is the same then :2cents: the answer to your original question would vary on the type of your business e.g. you are an accounting firm then accounting is a core process.

In our organization we have implemented the Corporate Balanced Score card as a mandatory part of the Strategic Planning Process. The corporate balanced score card is having four parameters namely financial, internal process, knowledge & learning and customer perspective.The CBSC parameters are percolated down to departments and subsequently to the KRA's of individuals.

We also have changed the name of Management Review as CBSC review , and top management participates actively in that review.We aslo have designed core processes for corporate finance and corporate accounts departments and identified definite process measures.

Our top management considers finance & accounts as a key support process and these two departmets embedded in the QMS.

Regards,

Arin

dQApprentice

I forgot to mention our products.
We are an Enginneering company which the main products are: Drawings, specs, Bill of materials, P&I diagrams,Data sheets, etc.

This is kinda interesting: Turtle Diagram of Cash Flow (http://elsmar.com/pdf_files/Turtle%20Diagram%20of%20Cash%20flow.pdf)

How deep are ISO 9001 auditors going into finance these days?

I never go into the Accounting Dept. They have their own auditing scheme, and the CFO probably wouldn't let me in if I wanted to. However, the CFO usually participates in some of the meetings and interviews, and they generally support the management team with metrics and measurables.

So what do all the people who don't include finance depts do about invoicing errors, the financial information to create reports, etc.? It sure seems to me that financial stuff is a really big part of a business, and the financial dept (controllers etc.) are often in charge of purchasing and IT also.:confused:

Hi all

I have a doubt and hope you can help me.

For me and for some of you who are experienced ÍSO´s.

In my bussiness Into the Product realization, I consider
core Processes= Commercial, Engineering,manufacturing, Delivery and post-delivery support

Sub processes or supporting processes
IT, Training, Human Resources. Accounting.

My doubt is although Accounting is in charge of Payments, payments in advance, Sending invoices to clients, etc.

But particularly in my bussiness, if We don´t have the money in our pockets, we can´t start the planning nor the manufacturing, etc.
Then the process is stopped.

In this angle, It seems is an important link in the chain.

Then the accounting Dept. will be a Core process or Support process?
Although they don´t participate directly in the product manufacturing
Really their function is important.


Thanks to all


Certainly, Accounting is important. If you decide you want to make it a support process in your system, you are permitted to do so. Some of my clients do this, internally, because they choose to. But, ISO does not discuss it, or make it a specific requirement. However, at my clients, the manager of the Accounting Dept. is always involved in their meetings, so it makes some sense.

It should be noted, I never audit Accounting. They have their own audit scheme. Some clients audit it for doc control, training, etc.

I have yet to encounter an ISO auditor that goes to finance/accounting
None in the last 30 years....
Did anyone check how many times the word finance or accounting comes up in ISO9001? I did, 0!
There are many business management systems, methods, accounting standards and so on, but ISO is not one of them.
Accounting is regulated but not by ISO

So what do all the people who don't include finance depts do about invoicing errors, the financial information to create reports, etc.? It sure seems to me that financial stuff is a really big part of a business, and the financial dept (controllers etc.) are often in charge of purchasing and IT also.:confused:


Certainly Finance Depts. play a significant role in every company. That is why a lot of my clients include some of the activities of Finance in their internal systems. But, I think we have to be careful how far we take things. If Controllers are in charge of Purchasing and IT, well then they would be included in ISO in those processes. But, Accounting has its own auditing scheme, and quality auditors are not qualified to perform financial audits.

On the other hand, I have written nonconformities against inadequate handling of invoice errors, for example, as a result of hundreds of customer complaints in their ISO CAR log. But, I don't know anyone who audits accounting, outside of maybe doc and record control, metrics, training.

But, I don't know anyone who audits accounting, outside of maybe doc and record control, metrics, training. That has been my experience.

Accouting/Finance as others have mentioned are touched on in the purchasing process. While limited the finance folks are involved and I do include those for review as they are directly related to whatever audit trail I am following.

I've argued the need for inclusion of some sub-processes within finance/accounting realm for years but usually get no helpful response. There is not always a good communication and parterning between purchasing group and accounting/finance. This is where an organization tends to have gaps that IMHO will directely impact the business system. The reasons finance/accounting is avoided in ISO are fairly obvious but I tend to dissagree on a number of these myself and feel at least the processing side for vendor selection/retention and payment processing do indeed affect an organziations ability to meet requirements in ISO/TS. Just as I don't overstep the lines on Environmental 'compliance' regulatory etc...in audits we also would never perform a financial $ audit under the ISO/TS umbrella.

Example: In efforts to streamline and minimize the number of vendors our organization has at times been affected when one site hasn't paid a shared vendor on open invoices (for whatever reason - typically matching errors on PO and Invoicing causing delays) and the vendor then locks orders to any site until that previous bill is paid. When this is the only approved vendor for a product/part/equipment you are then stuck until bills are paid up and the issued cleared which in turn compromises your scheduling, JIT inventory, open projects, etc...

Although I wouldn't say that Accounting is core, it sure is a strong candidate as the #1 support system!

What about errors in invoicing that annoys your customers? Or accounting keeps trying to take discounts that they are not qualified for (re: early payment) and annoys vendors? Or Accounting likes to stretch payments for as long as possible before they get in trouble (try getting good prices from that vendor - or better yet - establish a good vendor/client relationship!)?

I have been there - you learn quickly when the good system is not there just how much accounting control is important in keeping prices down and customer satisfaction high.

John

Did anyone check how many times the word finance or accounting comes up in ISO9001? I did, 0!
You didn't search for the terms "financial" or "financial management" in ISO 9001. ;) As Sidney shows above, these terms do exist.

Well-managed companies tend to integrate their QMS with all aspects of their business. If the company chooses to identify finance or accounting processes as part of their QMS, then as an auditor I'm obligated to audit some aspects of those processes. I don't need to audit the regulatory aspects of the processes, but I should audit the parts defined in their QMS - particularly the results.

If there was no relationship, why would this reference be included in the bibliography?
ISO 10014:2006, Quality management — Guidelines for realizing financial and economic benefits

Hi! This is my first posting and I hope my point of view is useful to others.
I'm a Quality Manager with over 10 years experience.

First, I wouldn't exlude the finance / accounting dept from the Quality Managment System (QMS) even if they have their own regulations and documented procedures to follow.

To me, the QMS includes the entire organization even finance. For some reason, many financial managers fear QMS procedures because they feel these documents would and could be a source of nonconformance in any external financial audit. I believe their concerns are unfounded because QMS procedures pertain to operating procedues ... not financial procedures. If anything, QMS procedures might provide some insights to several financial processes and thus be beneficial to the financial auditor. Plus... for my approach, I rely on flowcharts so they don't get into lots of detail for the auditors to question.

Second. The finance dept. is involved in the top (quality) "management process" and the "sales process" through policies on product return and customer credit, to name a few. Also, sales budgets are a key part of all organizations annual operating budgets. Who has the most to say about budgets.... the finance and accounting people.
The sales department can not operate without the finance dept. and the finance department relies on sales dollars and customers. Bottom line.... if you include your sales dept in your QMS, then finance should also be included.;)
This is covered more fully in the attached flowcharts.

Third. Management plays a key role in defining the "training process". Since training crosses all departments, it should also include the finance / accounting dept.

Forth. My former employer was bound by SOX regulations. A key component in SOX is document control and at first, finance had their very own "doc control process" and "doc change process". How can a QMS registered company have two document control processes - one for finance and another for the rest of the company? The sensible answer is having one doc change process for the entire organization. This was the end result. Many of you might wonder about who has access to SOX change requests? The answer is up to the organization to define but for sure, the review, approval and distribution list is different than the list for QMS documents. :)


In closing, I hope my comments are useful to you. I know I threw out alot of ideas and maybe, I'll learn something from your feedback too!:agree:
I'm having too much fun with the "smilies":biglaugh:

Thanks
George

Hi! This is my first posting and I hope my point of view is useful to others.
I'm a Quality Manager with over 10 years experience.

First, I wouldn't exlude the finance / accounting dept from the Quality Managment System (QMS) even if they have their own regulations and documented procedures to follow.

To me, the QMS includes the entire organization even finance. For some reason, many financial managers fear QMS procedures because they feel these documents would and could be a source of nonconformance in any external financial audit. I believe their concerns are unfounded because QMS procedures pertain to operating procedues ... not financial procedures. If anything, QMS procedures might provide some insights to several financial processes and thus be beneficial to the financial auditor. Plus... for my approach, I rely on flowcharts so they don't get into lots of detail for the auditors to question.

Second. The finance dept. is involved in the top (quality) "management process" and the "sales process" through policies on product return and customer credit, to name a few. Also, sales budgets are a key part of all organizations annual operating budgets. Who has the most to say about budgets.... the finance and accounting people.
The sales department can not operate without the finance dept. and the finance department relies on sales dollars and customers. Bottom line.... if you include your sales dept in your QMS, then finance should also be included.;)
This is covered more fully in the attached flowcharts.

Third. Management plays a key role in defining the "training process". Since training crosses all departments, it should also include the finance / accounting dept.

Forth. My former employer was bound by SOX regulations. A key component in SOX is document control and at first, finance had their very own "doc control process" and "doc change process". How can a QMS registered company have two document control processes - one for finance and another for the rest of the company? The sensible answer is having one doc change process for the entire organization. This was the end result. Many of you might wonder about who has access to SOX change requests? The answer is up to the organization to define but for sure, the review, approval and distribution list is different than the list for QMS documents. :)


In closing, I hope my comments are useful to you. I know I threw out alot of ideas and maybe, I'll learn something from your feedback too!:agree:
I'm having too much fun with the "smilies":biglaugh:

Thanks
George

Welcome George to The Cove Forums! :bigwave: :bigwave:

An excellent first post! Please keep them coming! :agree1:

Stijloor.

You didn't search for the terms "financial" or "financial management" in ISO 9001. ;) As Sidney shows above, these terms do exist.

Well-managed companies tend to integrate their QMS with all aspects of their business. If the company chooses to identify finance or accounting processes as part of their QMS, then as an auditor I'm obligated to audit some aspects of those processes. I don't need to audit the regulatory aspects of the processes, but I should audit the parts defined in their QMS - particularly the results.

If there was no relationship, why would this reference be included in the bibliography?
Howste,
Yes I did search for "financial" through the pdf's serach function but somehow I missed it. I did a renewed search and found one mention of it, and guess what it says? That financial management IS NOT WITHIN THE SCOPE OF IS09001
Quote:
"0.4 Compatibility with other management systems
This International Standard has been aligned with ISO 14001:1996 in order to....
This International Standard does not include requirements specific to other management systems, such as those particular to environmental management, occupational health and safety management, financial management or risk
management. However, this International Standard enables an organization to align or integrate its own quality management system with related management system requirements. It is possible for an organization to adapt its existing management system(s) in order to establish a quality management system that complies with the
requirements of this International Standard."

Too often people mix up between what some companies do or what they THINK should do and what the ISO 9001 STANDRD REQUIRES.
Standards as the name implies are generated so that people don't use their own opinions and judgement, whether it's good or bad, but follow a commonly agreed (by the reps of 140 or so countries) set of rules.

Willy,

What if an organization considers "accounting" its core business? An actual accounting firm for example...;)

Stijloor.

An accounting firm's core business is to provide accounting services to others- that's their core business, not their internal accounting department.
The quality of accounting is not QMS's concern- that's taken care of by following widely accepted accounting standards!
The QMS would be concerned with how good their service is, how to continuosly improve it and so on.

An accounting firm's core business is to provide accounting services to others- that's their core business, not their internal accounting department.

Agreed. :agree:

The quality of accounting is not QMS's concern- that's taken care of by following widely accepted accounting standards!

Could be, but an accounting organization may decide to obtain ISO 9001:2008 certification and then the standard requirements apply.

The QMS would be concerned with how good their service is, how to continuously improve it and so on.

Agreed! :agree:

Stijloor.

"0.4 Compatibility with other management systems
This International Standard has been aligned with ISO 14001:1996 in order to....
This International Standard does not include requirements specific to other management systems, such as those particular to environmental management, occupational health and safety management, financial management or risk
management. However, this International Standard enables an organization to align or integrate its own quality management system with related management system requirements.

Too often people mix up between what some companies do or what they THINK should do and what the ISO 9001 STANDRD REQUIRES.
Standards as the name implies are generated so that people don't use their own opinions and judgement, whether it's good or bad, but follow a commonly agreed (by the reps of 140 or so countries) set of rules.



Please note that the OP didn't specify ISO 9001 in his question. A management system that does not encompass functions as important as finance and accounting is incomplete regardless of what standard it meets. These functions are basic to the business.

Even if the cited wording of the ISO 9001 standard excludes financial management from the QMS, other sections require it indirectly (i.e. Sections 6.1, 6.3, 8.2.3). The output of the finance and accounting process is critical to proper measurement of the system, and such measurements are required for management to meet the standard.

So, while the standard may give an "out" to those businesses that do not want to include Finance and Accounting in their QMS, these same businesses should have an alternate management system for this critical function. Why would anyone want to maintain two different systems? After all, the standard "enables an organization to align or integrate its own quality management system with related management system requirements".

That's why I think the answer to the OP is yes.

Please note that the OP didn't specify ISO 9001 in his question.
But he did post his question in the ISO 9001 forum.

A management system that does not encompass functions as important as finance and accounting is incomplete regardless of what standard it meets. These functions are basic to the business.

There is nothing in evidence that indicates that the OP's company's management system doesn't address finance/accounting. ISO 9001 is for quality management systems.

This all boils down to a matter of choice, not necessity.

Anything & everything one does for the success of an organisation is subject to assessments , in the spirit of ISO 9001. However, the extent to which an ISO 9001 certification/ internal audit, actions will intervene, the Financial activities-- is to be evaluated --depending on the situation.
An example, Supplier Delivery performance is affected badly, due to non payment of dues by the organisation, at the agreed credit period--- calls for investigation/ intervention/ audit of the finance/accounting function. A improved process can be demanded from the CFO/accounts department/Management, for this. Supplier non payment, on time will also result in final Customer dissatisfaction.

The Intent of the Standard, should be looked at, rather than , achievement of a Certificate. With this logic even the IT processes are subject to discipline & included in the scope of assessments, in the new world Business scenarios wherein ERP(eg SAP/ BaaN etc.) drives most organisations.
Some of the Friends out there , will contest what I say. The easier solution is BUY the Certificate!!!
Best Regards TO ALL FROM INDIA !!

I have yet to encounter an ISO auditor that goes to finance/accounting
None in the last 30 years....
I frequently do when it is defined by the company as one of their QMS processes.

Howste,
Yes I did search for "financial" through the pdf's serach function but somehow I missed it. I did a renewed search and found one mention of it, and guess what it says? That financial management IS NOT WITHIN THE SCOPE OF IS09001
You read the first line of my post, but to me it seems you ignored the rest. For your convenience I'll quote it again below:
Well-managed companies tend to integrate their QMS with all aspects of their business. If the company chooses to identify finance or accounting processes as part of their QMS, then as an auditor I'm obligated to audit some aspects of those processes. I don't need to audit the regulatory aspects of the processes, but I should audit the parts defined in their QMS - particularly the results.

If there was no relationship, why would this reference be included in the bibliography?
ISO 10014:2006, Quality management — Guidelines for realizing financial and economic benefits

Too often people mix up between what some companies do or what they THINK should do and what the ISO 9001 STANDRD REQUIRES.
I hope you're not implying that I said that ISO 9001 requires audits of the financial management system of companies. If you'll read my post, I clearly didn't.

In that case I appologize, I got confused because this thread is under ISO9001-QMS
I also agree that If the company chooses to identify finance or accounting processes as part of their QMS, then as an auditor I'm obligated to audit some aspects of those processes."
I can't argue that, not knowing what is your expertize in accounting,nor having encountered yet a company that does that.Unless a QMS auditor has a strong background like being a former CPA, can't see how his audit can possibly have a real added value....with all due respect.
Every sizable company has aN INDEPENDENT CPA, has to abide by a myriad of regulations and accounting standards, public companies are required by law to have an Internal Auditor (no relation to quality auditor!) who reports to the board. Finaly to sign a company's balance sheet at year's end its CPA has anywhere from 1 to a dozen CPA auditors swirming on site and fine combing through hundreds and thousands of records.
And still we all remember Enron...after which came Sarbanes -Oxley. If you feel you can add value by your audits, welcome. I don't and won't
Not to speak of having yet to meet a CFO who welcomes such audits!
So I am out of this discussions- all who feel they should audit their company's financial management good luck!
Btw , sexual harassment is nowadays a big issue/concern for all companies. Any company that ignores the subject is prone to disaster. They must have a complaints officer, internal procedures on it and so on.
Is anyone here for including sexual harassment management into the QMS?
Lots of similarities : policy, procedures, prevention rather than inspection, continuos improvement, controlling non-conforming employees (segregate in MRB store until final disposition...to name just a few

Is anyone here for including sexual harassment management into the QMS?
Lots of similarities : policy, procedures, prevention rather than inspection, continuos improvement, controlling non-conforming employees (segregate in MRB store until final disposition...to name just a few
I've seen plenty of companies with identified sexual harassment training along with QMS training requirements. They generally track records of such training along with other training records.

For us, accounting speaks to the bottom line, how we did financially. Our Management Review meetings always include a review of the financials; where we are making money (including sales, continuous improvement projects, production goals, etc.) and where we are spending money (including training, special projects, preventive maintenance, repairs, etc).

Most of our accounting documents are corporate level procedures; our Site Controller reports to our corporate headquarters with a dotted line to the site. In this regard, our accounting function is a service platform (or whatever else you wish to call it, hub service, etc.) for our site. Just because they are a service platform for the site, it does not mean they are any less important, just that they are helping provide a service for our site. Our financial audits are managed by our corporate headquarters and sometimse contracted out to independent financial auditing firms.

I forgot this... Accounting in ISO 9001 (http://elsmar.com/Forums/search.php?do=process&titleonly=1&query=accounting)

Thanks Marc, lots of similar discussions there.