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Integra brochure
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July 02, 2007

How To Close Balance In a Week

One of the principal requirements, which the Company set up for the accountability - timeliness of its representation. For acceleration of this process the majority of the enterprises, constituent of  Integra Group applied the project "Fast closing of the accounting period on the sixth working day". Its purpose was reception of duly and exact data about results of financial and economic activity. In opinion of the company management, the project has raised efficiency of administrative decisions, both at a level of the separate enterprises, and at a level of group as a whole. The deputy Chief Financial Officer of Integra Group ALEKSEY URUSOV makes comments:In the Soviet enterprises the accounting department closed month only after its expiration. Actually in the end of February the management staff could find out what happened in January. Our innovation allows to receive all accounting reporting on the sixth working day following the termination of the month. Obtainment of the financial information at the earliest allows managers to make operative administrative decisions.To balance the accountsBefore introduction of the project closing of the accounting period in the enterprises of group there was in average on 14-16th working day of the month following the accounting month. The regulation of internal and external document circulation, as well as the mechanism of the control of terms for presentation of primary documents to accounting department, was practically absent. Owing to lack of planning the work during the month was uneven. Work on processing the primary documents fell to the end of accounting or the beginning of next month. As the basic purposes of transformations were are stressed:• reduction of terms of accounting information presentation; • unification of the accounting and tax account (by application of the United chart of accounts, uniform methodology of the account, that is Corporate registration principles and Uniform registration accounting system (in the configuration 1Ñ 7.7.)ALEKSEY URUSOV is telling:"We have made a decision on reforming book keeping at all enterprises of Integra Group. Shareholders of the company did realized, that the qualitative and duly reporting is necessary for making administrative decisions. The situation became complicated by the accelerated rates of development. The monthly turnover of group since January 2006 till beginning of 2007 has increased in 10 times, at the moment the annual turnover for the already concluded contracts is predicted to reach the level of above $950 million in 2007, due to active merges and absorption. As a result, the project was getting more and more complicated ".Realization of the project of reforms has begun in January, 2006. Basic elements of the project of reforming of book keeping were: • fast closing of the accounting period in the 6 working day; United Chart of Accounts (UCA) and corporate registration principles (CRP); uniform accounting system (UAS) with UCA and methodology CRP.ANTON VASILIEV shares experience: In the context of the reform the company has completely ordered procedures of reflection of economic operations under the Russian standards. The company developed and put into operation Corporate registration principles (CRPs) 1) CRPs for the accounting account 2) CRPs for the tax accounting 3) CRPs for differences between RSAA and IAS as uniform formats of Accounting Policies of the enterprises for the accounting and Accounting Policies for the tax account have been developed. Thus, the Russian enterprises of Integra Group using CRPs and specialized formats, before the 30th of March 2007 developed, approved and put in operation the standardized Accounting Policies for the accounting and tax account for 2007:• The CRPs reflect not only the uniformed for the enterprise of Group methods of the account (the order of charge of depreciation of fixed assets, order of write-off of MPR, the order of charge of reserves, etc.), But also complex cases of the accounting, which bookkeepers face in the daily work (the account of operations of rent and leasing, the account of special equipment, overalls, the account of financial investments, the account of tax differences under SA -18, etc.). • The Accounting Policies of the enterprises now reflect not only uniform principles of the account, but also other requirements, made by the legislation with regard to book keeping and which were absent earlier in Accounting Policies of the majority of the enterprises, such as forms of not unified primary documents, the schedule of document circulation, the order and terms of carrying out of inventory, etc. In all enterprises of the Group the new system of mutual relations with counterparts has been built. The main innovation - in all contracts concluded by enterprises "Integra", there was included an item about the accelerated terms of presentation of primary documents, that is papers from counterparts started to be received not in the end of the second decade of the month following the accounting, but from 1 till 4-th working day. Acceleration of document circulation was difficult for the project team. It was most complex to agree with the state enterprises and natural monopolies (power, railway, household services, etc.), but even with them it was possible to find common language.At the same time  "Integra" has provided in United chart of accounts (1Ñ 7.7.) the contour of charge (accruals) also has introduced in the enterprises the corresponding Regulating documents. The system of charges includes recognition of expenses at that moment when they have incurred. Advantage of use of charges is a reflection of charges on 6-th working day (even in case of absence of primary documents from the counterpart) and thus the correct calculation of financial result.
To apply in all aspects The automation of book keeping helped to make the accounting in a uniform format. As a basis the program «1Ñ: Enterprise 7.7» has been chosen.  "Integra" intentionally refused the eighth version of the program, having preferred the platform of the checked up and tested in practice platform and configuration.
ALEKSEY URUSOV explains: "Program «1Ñ» is rather good help for business. But we have decided that we have not grown to new version (8.0). Besides we decided to look, how it will work in other enterprises. As a result, with no wish to risk, we preferred the checked variant (1Ñ 7.7), finished it and adjusted to our needs. We did not even consider something more powerful - the Company was not ready to spend tens millions dollars for the project for application of, for example SAP R/3, "Integra" spend for the reform of Uniform accounting system 1Ñ 7.7 less than $2 million" . Now the priority in purchase of the new companies is the application of the Uniform accounting system, which already includes UCA and methodology CRP. For adaptation and installation of the program 1Ñ 7.7 the Company “Infotex" has been involved. After realization of the project in the context of it we created the uniform Service of support for UAS, which if necessary provides consultations to bookkeepers of the group. Training bookkeepers in skills of work with the new version of the Uniform program was in parallel performed.Director of department of reengineering of business and monitoring systems of Integra Group ANTON VASILYEV reflects:" As to the new acquired by "Integra " this year enterprises we found it inexpedient to break the accounting period in the middle of the year and to introduce though good Uniform Accounting system. Besides this, the state forbids to make changes in the Accounting policy during the year without special caused by change of the legislation reasons. Therefore process of introduction of Uniform accounting system in the new companies has been postponed till the end of year, while for introduction of Fast closing on 6th working day, any season is just right. In fact this project concerns basically putting in order the document circulation of the enterprises, and this process, as well as "a new life" can be started at once from the next Monday ". Now fast closing of the accounting period is completely realized in 44 enterprises. In 2007 the mechanism of fast closing will be introduced in 11 new the companies of the Group.All CRPs and UCA  The Second module - the United chart of accounts and Corporate registration principles - has been developed in January, 2007. Due to the big number of the enterprises, included into the Group, it was necessary to provide comparability of methods of conducting book keeping and to unify directories. For achievement of these goals already on 1st of February, 2007 CRPs and UCA have been approved at all enterprises.ALEKSEY URUSOV shares opinion:There are different approaches to classification of proceeds and expenses. One bookkeeper will refer to expenses for the personnel only wages, another one will include charges on training of employees, premiums, privileges etc. Even such simple question as "charges for the personnel " is impossible to be unequivocally answered without the United Chart of Accounts and Corporate registration principles. Therefore "Integra" undertook significant work in unification of directories."Integra" has ordered accounts not only of the first order, but also and the sub-accounts. And it was necessary to consider needs for analysis both in the machine-building enterprises, and in oil-service. All of them are united in Corporate registration principles, which fixes the general order of the account for each Business-direction, whether it be oilfield service or machine-building. The thus created uniform methodology of the account consists of: • corporate registration principles for RSAA; • corporate registration principles for the tax account; • the corporate registration principles reflecting deviation between RSAA and IAS. On their basis the companies developed and approved the Accounting policy of the enterprises for 2007.ALEKSEY URUSOV ascertains:"Thus we have made "constitution" for bookkeepers. When someone doubts of how correctly to keep account on leasing, it is necessary for him to open the corresponding section of corporate registration principles where the approved variant  is specified. " For creation of the United chart of accounts and Corporate registration principles the company involved Ernst & Young experts. This was still not the end of cooperation: twice a year auditors check Corporate registration principles for conformity to the changing legislation. As a result, to the extent of the second stage of the project it was possible to reach: • Standardization of Accounting policies, which provides comparability of data of each enterprise; • Unification of directories in the context of development of the United chart of accounts; • Adaptation of Corporate registration principles for each kind of activity of the enterprises.
Team game For the control of realization of the project in the managing company we used project approach. The project has been headed by the Managing Committee, consisting of Deputy Chief Financial Officer and vice-presidents for the financial control of each direction of business. The project team was presided by the Director of department of reengineering of business processes and monitoring systems (Anton Vasilyev). The project group included professionals with practical experience in accounting. Thus, the Company has created "link" between contractors and chief accountants.ANTON VASILIEV is telling: " For example, the two main corporate methodologists were represented by the project managers for the account and the reporting, with the work experience as  the regional heads of accounting services, which had already elements of the system, being started in "Integra". There were no difficulties for them in the communication with colleagues, with chief accountants, and this is a great advantage. The greatest problem, we had to face in course of realization of the project, was resistance of environment ". Th goal of the project team included not only the control of process, but mainly active participation in development of UAS, CRP, testing UAS and interaction with the bookkeepers in regions. To assist the project team the operative committees consisting of three blocks have been organized: oil-service, mechanical engineering and the managing companies.ALEKSEY URUSOV summarizes: "The project has been carried out owing to  incredible efforts both of the project team and of the corporate center, and also of every regional enterprise. At the peak moment the Uniform Accounting System was launched in 31 enterprises, and efforts from contractors were insufficient. Many things we had to do by our own efforts, but colleagues sustained and gave within record period qualitative result for all stages of the project.
Especially difficult period was at the end of the year, when the process of testing the renewed program «1Ñ» was started. First the program has been tested within the managing company, and then it was cascaded to the “regions”.Now all the documents are entered by the accountants of the enterprises into the Uniform Accounting System in form of the united methodology, the accounting period is closed really quickly, on the 6th working day, and on the 7th working day the accounting data are replicated are available to the colleagues of the head office.  In case of necessity to change the program (UAS), the amendments and alterations are performed in a centralized mode, through synchronous dispatch to all enterprises from the Services of UAS support. The main consequences of the made reform is rise of controllability and transparency of the financial and economic activities of the company. “Integra” plans in the nearest future to realize the project in the just acquired enterprises of the Group.