Outsourcing accounting functions does not necessarily mean handing over the entire accounting or HR administration. In some cases individual areas can be outsourced, especially when they are urgent or complex tasks that require highly specialised knowledge.
For example, a large company importing and distributing alcoholic products ran into difficulties when moving from 1C:Accounting 8.3 to 1C:ERP Enterprise Management. During the data migration a difference arose in the accounting and tax reporting, along with mismatches in reports on banking transactions and costs. Given the company's billion-rouble turnover, this could have led to significant financial discrepancies and further problems with regulators.
The in-house specialists did not have the resources to reconcile such volumes of data, so the company decided to bring in an outsourcing company for three months to reconcile the data and fix the errors. Already at the first meeting with UCMS Group the company's representatives saw that our approach suited them, so they quickly decided to work with us. The client also appreciated our readiness to select specialists and launch the project within two weeks.
Using this case study, we explain how the client's tasks were solved and in which situations individual areas can be outsourced.
Company specifics:
Initially two workstreams were involved in the project:
After the initial three-month contract ended, the company decided to extend the reporting reconciliation block.
UCMS Group employees work remotely, in constant contact with the client's in-house accountants and other departments. Below we describe the main areas our specialists handle.
Our main task was to reconcile the accounting and tax reporting for the previous year, prepared in 1C:Accounting, with the data generated in 1C:ERP.
When a system changes, errors are inevitable, because there is no magic button that simply migrates the whole database. In our case, for example, some invoice numbers were migrated incorrectly and 1C:ERP automatically assigned them different numbers. And that is only one of the possible errors. That is why it is important to choose proven implementation providers and always reconcile.
Also, at the same time as moving to 1C:ERP, the company changed some of its accounting methods. For example, it used to write off at average cost and now began using FIFO, and the reporting no longer reconciles. We recorded the documents correctly in the current period, whereas in 1C:Accounting those documents were adjusted in subsequent periods. Accounting is a complex organism where everything is intertwined. Finding the source of an error is often almost detective work.
We also reconciled with the Federal Tax Service on all taxes for the year, including separate subdivisions across several of the client's companies.
In the end we checked all the data, analysed the discrepancies and the correctness of the settings for income and expense items, and prepared technical specifications for the 1C specialist to reclassify expenses. We created explanatory documents for the tax authorities and beneficiaries and prepared an amended corporate income tax return.
Large wholesale and retail companies often have difficulties with VAT returns. This is due to the large volume of daily transactions and adjustments for product returns and price recalculations. In our case, for example, one sale can have up to 10 adjustments.
We resolve VAT gaps and carry out a comparative analysis of the sales and purchase ledgers in the new and old databases. We agree the adjustments with the client and prepare technical specifications for the 1C specialist to correct errors in documents and registers. Where the services of a 1C specialist are not required, we make the adjustments to the purchase and sales ledgers ourselves. We prepare amended VAT returns.
When data was migrated from the old database to 1C:ERP, discrepancies arose in banking transactions: counterparties were mixed up and balances did not reconcile. We reconciled 25 wine stores and brought the data into line with the original database. We did similar work on costs, for example identifying why costs had not been written off in the new system and what corrections were needed. Our goal is for every wine store to close without errors.
The client also engaged UCMS Group specialists on a one-off basis to prepare for the audit. We collected and checked all the financial data to make sure it was accurate, prepared the statements and drafted explanations. In the process we worked with the auditors, responding promptly to their requests and making the necessary adjustments. Thanks in part to our efforts the company passed the audit successfully.
We always answer employees' questions and explain the accounting methods and procedures in the new ERP system. We prepare recommendations and checklists describing the methods used to collect data for the financial statements.
We help optimise processes. For example, we studied how the cash flow statement is produced as part of the annual financial statements. We found errors that often recur when selecting cash flow items and that affect the final report. We prepared recommendations on how to configure the items so that the report is filled in as automatically as possible.
We always try to help the client as much as possible, even if it goes beyond the contract. For example, at the client's request we prepared breakdowns of the balance sheet for banks.
If we find errors in the system, we immediately report them to the 1C support specialists or the client's internal team, and sometimes we prepare the technical specifications for the fix ourselves. That happened, for example, when the accounting of exchange rate differences changed and the system recorded them incorrectly. We produced technical specifications for the programmer describing the calculation scheme for exchange rate differences in tax accounting and which entries should be generated. We helped configure everything correctly so that the accounting was accurate and complied with the new rules.
Partial outsourcing helped the company get through a difficult transition to a new accounting system, eliminate significant data discrepancies and ensure the accuracy and transparency of its financial reporting.
The project was initially planned for a short period, but thanks to the successful delivery and new requirements the contract was extended several times. At the same time both sides accept that the cooperation can end at any moment. That is one of the advantages of working with an outsourcing company: specialists can be brought in for specific areas and a specific period.
The client noted that it was very pleased with the interaction with our company and the quality of the specialists' work.
Outsourcing is a convenient tool that allows flexible resource management. Try starting with a small area of work: it could become a key decision for improving the stability and efficiency of your business.
