Using the example of the Russian division of an international group, we explain how full accounting outsourcing works — from operational accounting to the chief accountant function and the preparation of international reporting.
About the company:
Cooperation began in 2010: the Russian division of an international manufacturer of product packaging equipment outsourced HR administration and payroll for two legal entities. Accounting at that time remained in-house.
In 2016 the head office decided to outsource the accounting of all group companies as part of its global compliance policy. For large international groups this is standard practice: an external provider ensures independence, data confidentiality and uniform reporting standards.
The Russian division continued to work with UCMS Group as a proven partner. At the same time, two specialists from the client's in-house accounting team joined our team and continued to handle their areas. It was important for the client to preserve the usual working conditions for employees who had worked at the company for more than 10 years. In addition, their deep knowledge of internal processes helped our team get up to speed with the project specifics faster.
In the same year, 2016, the chief accountant function was handed to the UCMS Group team.
Nina Kiseleva, project manager at UCMS Group:
“When selecting specialists for the project, it was important not only to have experience in the relevant accounting areas, but also to understand the industry specifics, as well as good English for communicating with controllers from European offices.”
UCMS Group keeps full accounting records for all three of the client's Russian legal entities — from recording primary documents to preparing statutory reporting under RAS.
Below are examples of individual areas of work.
Goods and customs declarations.The company regularly imports components, so it is important to ensure that the physical movement of goods fully matches the accounting data, to reflect customs duties and import VAT correctly, and to work with vendors and reconciliation statements.
Expense reports.The client's employees enter data into a dedicated program themselves. Our task is to check that the correct cost items are selected and that the export to SAP B1 is correct. When the system changes, errors often occur that require manual adjustment.
Bank and supplier operations.Processing invoices, acts and payment orders, allocating bank statements, currency control, supporting credit lines and regular reconciliations with counterparties.
Sales of goods and services, including to the EAEU countries and other countries outside Russia, as well as intra-group transactions with a complex document flow, approval and taxation procedure.
Another task specific to this project is calculating exchange rate differences. The global group uses an internal rate that is sent to all legal entities monthly and always differs from the Central Bank rate. Exchange rate differences arise on foreign currency suppliers, customers and banking transactions, and they must be correctly reflected in the accounts and justified when necessary.
The main records are kept in 1C:Accounting. SAP Business One (SAP B1) is used for day-to-day operations, invoicing and international reporting. Our team took part in the working group that set up and launched automatic two-way integration between the systems. Data is now synchronised every five minutes.
Every day we control data transfer: we check the mapping of entries and identify and fix errors ourselves or together with the developers.
Once a month we reconcile the databases on key accounts (inventory balances, suppliers, customers, balance sheet, P&L), and once a quarter we perform a detailed reconciliation broken down by sub-accounts and cost items.
The chief accountant's tasks are not only to control the quality of the team's work but also to provide ongoing methodological support. For example: how to qualify an incoming invoice for VAT purposes, whether the company will act as a tax agent, how to record a non-standard intercompany transaction or how to build a cost matrix. Such questions arise regularly and require analysis, risk assessment and a reasoned decision.
A separate part of the work is interaction with the client's finance function, including requests from head office controllers. Requests arrive regularly and often require a quick response: they may concern current transactions, the preparation of explanations for the head office, participation in changes to business processes that affect accounting, or the analysis of non-standard situations.
In addition to Russian accounting under RAS, we actively participate in preparing international reporting for the group's parent company. Besides the main reports, the work includes reconciling balances between the group's legal entities and managing contracts for sales projects — a task that formally belongs to the commercial function but in practice is performed by accounting.
Five interconnected systems are used to close international reporting: data is exported sequentially from one to another and ultimately consolidated in the final system. At the same time, one of the legal entities works only in 1C:Accounting without integration with corporate systems, so data has to be transferred manually at closing.
Every year the company undergoes two types of audit of its financial statements: a Russian audit under RAS and an international audit by the group parent company's auditors. Over the years of cooperation, all inspections have proceeded normally, without critical findings or on-site tax inspections.
Auditor findings are part of the standard process of improving accounting and internal procedures. One example concerned work in progress: the auditors noted that some transactions were closed late because documents from the group's companies arrived late. To solve the problem, the team built a clearer process of interaction with the internal companies: document transfer deadlines were agreed and regular communication was established. By the next audit, the work-in-progress closing process had been fully stabilised.
Nina Kiseleva, project manager at UCMS Group:
“I can say that this is genuinely an unusual project. On the one hand, it has very complex accounting with the integration of several systems, intercompany transactions and multi-level management reporting. On the other hand, it is a company with almost no staff turnover, where employees work for 15–20 years, and you can feel that the client genuinely cares about its employees and supports them, and that support is mutual. It is interesting to see how such processes are built.”
Ten years of working together is not just a long history of cooperation. It is accumulated context: an understanding of internal processes, industry specifics and the client's corporate culture. That is exactly what allows the provider not only to keep the records but also to anticipate problems, respond quickly to non-standard situations and maintain quality without constant oversight from the client.
