Background
Problems of factual accounting
There is no unified methodology of fact recognition. Accounting of internal settlements is not organised. There is no possibility to compare data in the period. All financial reporting is in Excel.
Planning issues
Plans are made for the year and are approximate in nature. There is no plan-fact analysis in a unified system. The interrelation of planning budgets is often lost. No planning balance is formed.
Payment calendar issues
There is no forecast of payments. No automation of accounts payable control and limits by CFR and items. Need to automate the coordination of applications for cash flow.
Project
A comprehensive approach to implementation was chosen – methodology and automation from a single source. Optimisation of business processes took place simultaneously in three business areas.
Regulation
A unified methodology of management accounting and budgeting was created for the Group of Companies. Namely: budget models for each business area were determined with due regard to the specifics of the business, and the principles and features of management accounting were described with details of business operations. This stage became the starting point for automating the receipt of management reporting on a factual basis, as well as for the development of planning tools.
Management accounting
A centralised management accounting database with up-to-date information in one place was developed. Complex cost allocation mechanisms were implemented. Management reports have been set up, both for an individual line of business and for the group as a whole. One management chart of accounts is used to store management data for the three areas.
Budgeting automation
A full budgeting cycle with drill-down analytics to the primary document has been implemented. Coordinated budget for each CFA (avoiding manual management and lengthy approvals). Full-fledged planning of inventory movement (sales, production, write-off of inventory) using the FIFO method to control the cost of goods by nomenclature and unit of production.
Payment calendar
A payment calendar has been implemented with operational management of payment requests and redistribution of limit balances between items and CFR. Forecasting of payments in the operational loop and management of risks associated with the lack of available cash were implemented.
Results of ABM Finance implementation
Qualitative changes
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A centralised management accounting base has been established
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Accurate end-to-end planning implemented (analyses from sales plan to planning balance sheet and ratio matrix)
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Developed a forecast of key performance indicators for the year ahead
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Increased marginal profitability due to qualitative factor analysis in product portfolio management
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Scenario planning (scenarios of budget changes) and full budgeting cycle with drill-down analytics to the primary document are built
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Reduced manual labour and, as a consequence, labour and time spent on management reporting
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Harmonised budget for each CFR (to avoid manual management and lengthy approvals)
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A company liquidity management tool (NWC) has emerged
Customer feedback
О. M. Chanchikov
Chief Financial Officer of MedPharmHolding
"We jointly travelled the path from methodology development to the complete transition to the ABM Finance software product in the blocks of management accounting, budget planning and payment calendar. Thanks to the individual approach of consultants in the implementation of our tasks and the flexibility of the software product, the nuances of all the main business areas of the holding company were reflected in management accounting, while maintaining a unified accounting and reporting methodology."