Background
The need to modernise the holding-wide management accounting structure
Consolidated budgets need to be optimised
Non-automated payment reconciliation processes
The need for centralisation of the treasury for operational cash management
It's hard to control budgets when the budget is in Excel and the fact is in the accounting system
Lack of plan-fact analysis and "like to like" analysis
Project
The project required the construction of a new architecture. It would ensure the uninterrupted exchange of data from the holding-wide management database with the databases of the divisions. This would allow us to promptly provide the management with actual data (reporting package).
The next task was to centralise the treasury, which would include regulating the payment approval process in the group of companies, transferring the payment function from the divisions to the head office, automating all approval chains, generating payment registers, reports, etc.
In addition, a new budget system was to be developed on the basis of the ABM Finance software product, optimising it in terms of logic and sufficiency of budget forms.
Management accounting
1. We added the analytics "Counterparty business unit". This allows you to analyse receivables and payables not only by legal entities, but also by business units.
2. We have added analytics for Stores and branches with various additional parameters to the income and expense accounts.
3. Reduced the list of central financial functions to 16 core functions.
4. We added new analytics for the Non-current Assets Group to monitor budget execution not only by payment but also by capitalisation.
5. Developed rules for the exchange between databases and requirements for the improvement of accounting systems.
As a result, we received a tool for obtaining daily cash flow data and generating a Cash Flow Statement.
Treasury centralisation
The block covered the following steps.
1. Unification of the payment approval process for all Divisions. Development of uniform rules for payment verification.
2. Creation of procedures for automatic budget control, for approval of budget overruns with the management company.
3. Setting up payment registers and the Payment Calendar report for operational planning of payments and receipts.
4. Automate the creation of payment documents based on payment requests.
5. Setting up mechanisms for exchanging the treasury database with client banks in order to promptly receive the fact of cash flows.
6. Development of payment reconciliation regulations.
7. Setting up a mechanism for loan management.
Budget planning
We regulated a unified budget management methodology for all divisions. We developed a budgeting scheme and forms for entering planning information by division. The forms were simple, but sufficient to obtain consolidated budgets in the required analytical sections. We also created forms for budgets for investments, salaries, administrative expenses, banking services, taxes and financial expenses. For planning and analysis, we added two new accounts: one for accounting for the movement of goods at cost, and another for accounting for sales at cost.
They also set up a document that takes into account seasonality and plans sales revenue on a weekly basis.
Results of ABM Finance implementation
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Unified budget planning methodology, unified set of budget forms and items
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Automatic control of budget execution is set up
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All payments are transparent and are made exclusively in a single system, which allows us to effectively manage the holding's cash flows
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Systematic management of the register and payment calendar ensures liquidity of the holding
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Based on approved applications, payment documents are automatically generated for uploading to the Client Bank
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It is possible to conduct a plan-actual analysis in a single system
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Prompt receipt of consolidated reports with the necessary analysts is set up
