GEOTECH Holding shortens timeline for preparing management reporting through 1C:Consolidation
GEOTECH Holding, the largest Russian seismic exploration company, has successfully implemented the 1C: Consolidation system. As a result, the collection of data on the performance of the holding's business units has been significantly simplified. The timeframes for the preparation of consolidated financial statements has shrunk from a week to two days.
GEOTECH Holding CJSC is one of the most technologically advanced exploration companies in Russia and the CIS. The company provides a full range of seismic exploration services in all major oil and gas regions of Russia and possesses extensive experience in Kazakhstan, Uzbekistan, Turkmenistan, and other countries.
The Holding comprises 20 key business units, located in the main oil-producing regions of Russia and Kazakhstan. For effective management, the Holding’s top management and senior management at the financial and economic divisions of the company need current and accurate information about the performance of each business unit.
The cornerstone of the corporate information system is the 1C: Manufacturing Enterprise Management solution; for local management accounting tasks, a range of additional software is used. Before the introduction of suite, data required for the preparation of financial and management reporting had been collected manually from different systems and the consolidated accounts were summarized in spreadsheets, which was painstaking and time consuming. The reports forms were unstandardized. The large number of source tables complicated data processing and analysis.
Therefore, there was a need for a solution that would allow the company to organize quick collection of data from different subsidiaries, to standardize the management reporting package, and to unify and accelerate its generating. Implementation has been performed by the Rise group of companies, which specializes in finance and accounting automation. The project was implemented on the basis of the 1C: Consolidation 8 solution. Currently, the system has more than 100 users in 20 business units of the company. In the course of the project’s implementation, the following goals and objectives have been achieved:
• The issue of operational data collection from the accounting and operational production systems of the business units has been solved. To this end, the entire set of directories, download forms and output reporting forms containing production and financial information has been fully standardized. As a result, the labor costs of the financial and economic unit for the collection and processing of incoming data have been considerably reduced, while the time for individual and consolidated monthly reporting has shrunk to up to two days. Now within the program 12 groups of reports are generated: reconciliation of intracompany turnover, the actual budgeted revenues and costs per project, a business unit, the entire group, the balance and working capital for a business unit and the Group, reporting on individual functional units (fuel & lubricants, materials, headcount).
• Management adjustments and amendments for the purpose of generating management and IFRS reporting have been unified, standardized, and automated.
• A convenient automated algorithm of reconciliation and elimination of intracompany turnover has been introduced within the system. This eliminates the possibility of errors in generating intra-group transactions and increases the reliability and validity of the financial and management reporting data. • Integration of 1C: Consolidation with the system of production of operative actual data and automated budget management and accounting systems has brought together the information systems into a shared information space, increased the quality of reporting, and reduced the burden on the staff of financial and economic unit. • The flexibility and scalability of the system has allowed to lay the foundation for expanding functionality in promising areas: payrolls, corporate finance, material, and engineering support.
• The mechanism of seamless integration with the single corporate system 1C: Manufacturing Enterprise Management has been developed and implemented, which allows the company to ensure the "drill down" tool to a primary business operation across the entire range of management reports. This enables management not merely to analyze whichever performance indicator, but also to identify their underlying causes.
According to GEOTECH Holding CFO Ms. Ilona Petrova: "The most important result is the ability to quickly detail management accounting up to primary accounting data and generate consolidated management financial statements within a rather short time. The system allows us to minimize manual labor in generating reports and to free the time resources of the financial and economic service for additional analysis of the performance effectiveness in order to increase the company's value" .
Following the results of the project presentation at the 1C workshop in March 2014, the project of management reporting automation by GEOTECH Holding was recognized as the best and posted on the website of 1C in the section "The Best Implementation of 1C: Consolidation 8".
The Rise Group of Companies is the official partner of 1C and has the status of a "1C: Franchisee." The company began development in 2006 in Izhevsk with 1C remote development and support for its Moscow partners. Today the company employs more than 60 professionals who specialize in the implementation of projects for the automation of holdings’ finance and accounting in the field of management accounting, RAS, and IFRS.