Accessibility, client focus and operational efficiency are the principles used by our client in building engagement and staff interaction. For example, expense report processing – a procedure always involving plenty of routine and error risk – is organised within the company so that the employees can report comfortably and quickly receive compensation of expenses, accountants spend less effort on data processing and tax risks are minimised.
Project Parameters
Expense report processing, compensation calculation, creating a single portal, integration with 1C
100 employees
150+ expense reports per month
1С
Project brief:
- Simplification of the expense report approval process
- Creating a single portal to receive, process and approve documents
- Prompt payment reconciliation with employees
- Speed-up of payments to employees
- Reduction of tax risks caused by inaccurate or delayed reports
- Threefold increase in the number of system-processed expense reports (from 50 to 150 per month)
- Increase in the number of reports submitted in time, from 40 to 70%
- Creating an electronic document archive to abandon the use of paper media.
Objective:
The client operates in more than 100 cities in Russia, with all expense reports processed by the central office’s accountants. This is routine and quite extensive work: employees shall ensure that no slip or receipt is lost and accountants are to verify lots of documentation, request missing documents and normally do so under time pressure at the end of reporting periods. As the scopes of documents grew, so did the volumes of accounts receivable. Delays in providing documents and errors committed by employees when completing expense reports resulted in delayed payments, conflict situations and incomplete cost data in reporting statements.
Automation of expense report preparation was to change that process to make it convenient for all participants, i.e. reduce the scope of accountants’ routine work, mitigate tax risks and speed up paying compensations to staff. To deal with this task, the client approached Unicon Outsourcing specialists.
Solution:
During the project, the client company’s primary document entry was automated. A portal was created to enable an employee from anywhere in the world to download photos of receipts, slips and other supporting documents using a mobile application. Unicon Outsourcing’s accountant verifies their correctness (for example, whether costs are consistent with approved cost items). Then documents are sent to an employee’s manager for approval. If an error is detected, the employee is notified via the portal that corrections are needed. Once approved by the manager, the received documents are downloaded in the 1C-based corporate accounting system and the payment preparing process starts. Received information is also immediately used for tax calculations.
Therefore, the employee can prepare an expense report immediately after expenditures, without having to return to the office or having documents delivered to accountants by courier service. The faster costs are recorded, the lower the risk that the employee will lose a document or forget to send it to the system. This allows all costs to be timely accounted, while the accountant's office can promptly verify them and make the necessary calculations based on electronic documents.
Taking into account that the client abides by the fast close principle (when accounting registers are closed on the 3rd – 5th day at the latest after the end of the reporting period and a package of financial statements is submitted to the manager for signing on the 10th day after the end of the reporting period), it is very important for the tax reporting to be compiled on time with no errors. Under Russian laws, the company may account such costs as production expenses, reducing the profit tax.
Employees shall also furnish paper documents on incurred costs, but the introduction of digital signature will make it unnecessary. Today, original slips, receipts and other cost documents can be provided to the accountant’s office after an expense report has been approved in the electronic format.
Result:
By reducing the expense report processing period, the company was able to speed up the payment of cost compensations to the employees, thus decreasing the amount of internal accounts receivable. Besides, the outsourcing of expense report preparation allowed limited resources of the accountant’s office to be distributed more efficiently.
Another advantage of the portal created by Unicon Outsourcing for the client is that report preparation became a single and transparent process. Understanding how expense reports are generated helped the employees to improve cost control: a correlation between providing correct information to the accountant’s office and receiving compensations under approved reports became apparent. For example, in the case of a long business trip, an employee can receive compensation under the report even before the trip ends.
Another example: under Russian laws, a large scope of primary documentation is required to support costs. These are business trip orders, memos, hospitality expenditure reports, etc. If the appropriate memo is prepared, no personal income tax will be withheld from amounts received by an employee as compensation under expense reports. It is often, however, that employees have no idea how to prepare a memo, and the account’s office has no resources to help staff in this case. The portal allows automatic generation of such documents by using pre-configured templates.
This improves the involvement of staff in the corporate management process, their loyalty, self-organisation and discipline. According to the client’s internal estimate, the report generation accuracy grew by two times and the amount of approved reports by three times.
The portal will be soon complemented with tools to automatically check the compliance of slip sums with data specified in an expense report.
