ElMetro automated management accounting using Bit.Finance from First Bit

2021: Implementation of BIT.FINF.Prof

On March 25, 2021, it became known that thanks to the implementation by the specialists of the First Bit of the BIT.FINFONT.Prof decision, budget and treasury processes in the ElMetro industrial company were automated, which made it possible to optimize the effectiveness of management decisions. The project has reduced the time previously spent on many manual operations and reporting by 8 times. The optimization of budget management, the significant acceleration of financial operations and the optimization of budgeting accuracy with the help of the BIT.FINANCE solution became especially important during the pandemic.

It was reported that before the implementation project, ElMetro's budget process and treasury functions were carried out using Excel, which created difficulties, including those related to the human factor. Decisions on payments were made slowly, the process of processing information on cash flows, controlling budget items and posting reporting and analytical forms was time-consuming. Coordination of all issues was carried out manually. Up-to-date information was entered in a number of different tables, where data were often lost or ultimately incorrect.

Automation was needed to optimize the efficiency of financial planning and the speed of obtaining high-quality information. To achieve the goal, the company defined business objectives for the automation of management accounting:

• automate the process of working with information, move from Excel to the software product to reduce information loss when transferring to the program;
• reduce production and management costs;
• reduce risks of cash gaps;
• ensure the correctness of the provided margin income budget data and the plan-based analysis of indicators for business products;
• obtain an operational management balance, formed monthly with two blocks of indicators for assessing the financial condition of the company and making decisions in the field of borrowing, investments and areas of activity based on the results of financial and economic activities (hereinafter referred to as FHD).

To move from manual reporting to automation, ElMetro held a meeting, analyzing the existing tasks, compared them with the capabilities of the BIT.FINANCE system, which was identified as the most suitable for implementation. To implement the project, they chose a long-standing implementation partner in ElMetro - the company "First Bit." Previously, the company has already collaborated with IT integrator specialists. Knowing the experience and quality of 1C: Accounting maintenance and maintenance, they entrusted the project to developers with their own BIT.FINANCE solution and experience in its implementation. We selected the TRAC version of the software product, which allows to realize the idea of ​ ​ automation through its functionality.

The level of regulation of budget management in the company was initially appropriate, the management team acted economically competently. The project solved the task of automating the long-established processes of planning, collecting, analyzing budgets and related reference information, using the capabilities of a unified database with accounting and the capabilities of an online mode of collecting fact. Up to 40 people participated in the company's budget process - managers and employees of the main management, support and design services. They initiated applications for payments, and the heads of the Central Federal District planned and made decisions on budget expenditures. Applications for spending money before the project were formed in paper form, which was not relevant for treasury operations, especially not effective in a pandemic. At the first stage of the project, the First Bit implementation team was engaged in the complex optimization of the effectiveness of operational cash management in the Treasury and Budgeting subsystems. Specialists set up the receipt and processing of regulatory reference information and turnover items, the algorithms for sighting and assigning the status of the Cash Expense Request, and automated the treasury process.

Not only were the BDR, BDDS, cash balance budgets, plan analysis forms, payment calendar and other forms already provided for in BIT.FINANCE implemented, but a number of additional reports were also implemented, including an analysis of the status of applications and periods of delay in their implementation, a comparative analysis of all elements of margin income in comparison with comparable data from past reporting periods, etc.

In the subsystem of analysis of the financial condition of the company and the results of the FHD, the target setting for reducing the horizon of planning and financial and economic analysis to the level of operational management allowed, after methodological study, to go to the next stage of the validity of management decisions at the expense of:

• margin analysis;
• Monitoring financial security indicators:
  • current liquidity ratio;
  • absolute liquidity ratio;

• Financial independence:
  • equity concentration ratio;
  • financial independence ratio;
  • Percentage coverage ratio;

• Financial sustainability:
  • own working capital;
  • net working capital.

All indicators were mainly reflected in the reporting form of the management balance, which was set up outside of the closing of the reporting period in regulated accounting, which made it possible to form a budget much faster, almost online at any time.

The next step was the automation of the results indicators of the FHD, on the basis of which the company's financial and economic management was able to regularly form a matrix of financial strategies and justify decisions on sources of financial resources. This analysis has also been implemented in automated forms of BBF, BDD and BDDS reports. Based on them, RFHD indicators became operational and open, which made it possible to carefully and quickly develop decisions on investment, profit and attraction of borrowed capital. The developed methodology of the financial strategy matrix systematically supplemented the analysis of financial security indicators through a simple and visual visual form of presentation, intuitive to the management of ElMetro.

As a result, the First Bit automated the subsystems "BDDS + Treasury," "BDR and functional budgets," set up the operational management balance and key indicators of the financial condition and results of the FHD.

The process statuses of applications for spending funds were expanded in composition, the coordination routes were differentiated, and this allowed to accelerate adjustments in documentation support, and optimize payment discipline.

To reduce user labor when planning the margin income budget, re-designed budgets sales and cost write-offs based on established prices. Optimizes the choice of complex margin across the entire order portfolio based on margin analysis by item group. The scenario of sales, material expenses and margin income has been applied.

The project of automation of budgeting and treasury, the development of the budget management methodology brought ElMetro the following results:

• a single information space for regulated and managerial accounting has been formed;
• implementation of the principle of one-time entry of information into the system for regulated, budget and management accounting;
• A process mechanism has been established to harmonize cash requests and payment registers;
• The time spent on the generation and verification of income and expenditure reports, the management report of the BDG from 2 days to 2 hours has been reduced by 8 times, the fact collection for the BDD and for the BBL takes place online;
• an in-depth and understandable analysis of the main indicators of financial security and the results of the FHD, this model is now considered and used for the security of the company;
• reduced "human factor" errors;
• simplified procedure for filing applications for spending funds, control of limits;
• twice as fast as margin planning across the product line and fact analysis.

The process of automating accounting is not only about numbers, it is also about the business structure of the enterprise as a whole. During the implementation of BIT.FINANCE, we looked at our business on the other side, which made it possible not only to optimize our processes in the field of management of the company's economy, but also to adjust some corporate processes. In general, when implementing accounting automation, we not only saw what reserves we have, but also what challenges we still have to work with to optimize our efficiency. The introduction of two lines of automation of budgeting and treasury in the company "ElMetro" was carried out by a team of specialists of the First Bit in Chelyabinsk. Experienced implementers confirmed their professionalism. Thanks to the well-designed System, our company solved all the tasks set for March 2021. In the future, we plan to continue cooperation with the company "First Bit." commented by Maxim Efremov, Deputy General Director for Economic Affairs