Elmat Group automates BDDS system

2022: Automation of BDDS

On August 3, 2022, First Beat announced that it had automated the BDDS system for the ELMAT Group.

As reported, ELMAT Group is a large group of companies that includes several industries and management organizations. However, all transactions and payments were recorded manually. The process took not only the time of the employees, but also introduced significant confusion into the work.

During the implementation of the project, the following tasks were to be completed:

• Automate all treasury processes - accept applications for payments, control, approval, execution.
• Ensure simple and fast control of the cash flow budget (BDDS) and its automatic formation on the basis of payment calendar requests.
• Set up automatic generation of the BDS actual plan, as a result - optimize the quality of operational planning in order to avoid cash gaps.
• Provide easy control of targeted spending - the ability to track the entire chain from application to execution at any time.
• Optimize the transparency of cash flow processes for management.
• Reduce the share of paper documents in the group of companies.

Each of the companies kept records in a separate accounting database. Treasury processes were partially automated: applications for spending money (purchase of materials, repair, purchase of advertising, etc.) were manually driven into the self-described system, which was intended for production accounting and is not designed for business processes of the treasury and accounting.

The initiator printed the application and personally signed it along the entire coordination chain: at the managers, in the accounting department and only then transferred it to the treasury. This process took up to two working days and it was difficult to control it: it was possible to print the application and bypass any signature, then the employee had to re-sign everything, or an application was accepted into work that was not agreed with all responsible persons. As a result, when all applications fell to the treasurer, he once again manually checked them for compliance with the budget and formed payment orders. The execution of payments was not tied to the application, and therefore it was necessary to post the fact in, and files Excel the plan-fact of the cash flow budget was at least a day late.

At the time of the start of the draft, cash flow items did not correspond to management accounting items, therefore, it was impossible to collect the fact of the cash flow budget based on accounting analysts, manual adjustments were required when generating reports.

In the course of joint work and approval of the NSI, a joint analysis of the financial structure was carried out, it was possible to bring the directories of the Articles of Turnover, DDS, BDDS to uniformity, they were structured by types of activities: operational, investment, financial and established compliance between the articles. This made it possible to reduce the labor costs of accounting staff for the formation of payment orders and the treasury for the formation of payments.

For the company, additional analysts of the types of cash flows were designed: external and internal, in order to further form a consolidated cash flow budget throughout the ELMAT Group. A reference book of financial responsibility centers has been created, which includes all departments of companies that plan their budgets and form requests for expenses (supply department, marketing department, transport department, etc.).

To form the budget structure, a responsibility matrix was formed and uploaded to BIT. Finance allows you to understand which division is responsible for planning, monitoring and execution of applications for each item. Budget entry forms and user rights have been configured based on this matrix.

Previously, any performer from any division could make an application for spending money on any item, sign it and transfer it to the Treasury, because of this, applications could be duplicated, created incorrectly, and most importantly, responsibility for budget execution was blurred.

The process of coordinating applications for spending funds in the form of a single approval algorithm was formalized. This ensured the transparency of the approval process, the ability for the performer to see at what stage the fulfillment of his request is.

In order for the fact to be reflected in the report, including on transactions not related to the submission of applications (bank commissions , currency commissions, etc.), broadcast rules were set up. An important problem was the reflection of exchange rate differences and currency revaluation amounts, including the mandatory sale of foreign exchange earnings.

Setting up the rules meant checking at the modeling stage: the change in cash balances should have been equal to the balance of turnover for budgets. This has reduced the effort of the Finance Department, as you used to have to manually summarize reports in Excel. Accounting also reduced labor costs, since payment orders were created automatically on the basis of requests.

To build a payment calendar, it was decided to create planned receipts both on the basis of invoices and on contract schedules. It was decided to make payment forecasts using the translation method from the operational budget input form.

Previously, the Client had set up a non-standard report structure: selective indicators were reflected in several forms at the same time, the cash flow budget was posted to several separate tables. The specialists of the First Bit, using the data layout in the standard report, set up the forms of the actual report of the cash flow budget and the payment calendar.

Throughout the project, the Customer was provided with information and methodological support based on the experience of similar projects. This made it possible to align the Customer's methodology with the BIT.Finance methodology and implement the implementation without design and development stages.

Project results:

• The burden on the main executors of the treasury and accounting in terms of the formation of payments has been reduced, labor intensity has decreased by 20%.
• The BDDS budgets were formed taking into account the division into centers of financial responsibility.
• Automated approval of applications for spending funds and control of budget limits, which made it possible to get away from manual opaque approvals and reduce paper document circulation.
• Translation of budget transactions and balances according to the chart of accounts is automated, which makes it possible to generate BDDS in real time (including taking into account revaluations of currency amounts).
• A mechanism for updating budgets has been implemented, which allows dynamic changes to budgets taking into account the facts of previous periods.
• On the basis of planned receipts and operational payment planning, a payment calendar is automatically formed, which allows predicting cash gaps and taking corrective actions.
• The responsibility of the executors has changed due to the automation of cash flow control.