Hearst Shkulev and InterMediaGroup

Payroll accounting for the Hearst Shkulev and InterMediaGroup group of companies

The term: 2007 through 2009

The field: mass media

The service: payroll accounting

Software used: 1 S Payroll and Personnel, v. 7.7

Location: Moscow, Russia

The objective:

• outsourcing payroll accounting for 730 employees

• setting up the process within 10 days

The solution:

• beginning work upon the receipt of a letter of guarantee

• regulation and tuning of the customer’s business processes

The result:

• achieving savings of over RUR half a million annually

• concentrating on the principal activities while minimizing time spent on solving auxiliary problems

• successfully coping with annual audits and in-office tax inspections

• substantiating the appropriateness of non-standard operations for tax agencies

The description of the client:

The Hearst Shkulev and InterMediaGroup group of companies is one of Russia's leading publishing houses. The total circulation of its output exceeds 12 million copies, its total readership exceeding 21.6 million (the data supplied by the TNS Russia).

The objective:

During the summer of 2007, the chief payroll accountant of Hearst Shkulev and InterMediaGroup quit. His successor was overwhelmed by the amount of work he had to do. Payroll for 730 employees needed to be completed within 10 days. Of the mentioned 730 people, 450 were staff employees, the rest subcontracting for two companies. Besides, the numbers of personnel growing, there was a need for hiring additional accountants. The company needed to urgently reestablish its payroll accounting to avoid inconveniencing its employees.

The solution:

Lyudmila Smirnova, the financial director of the Hearst Shkulev and InterMediaGroup publishing house decided to outsource the group's payroll accounting. Having received a letter guarantying payment , the BDO outsourcing division began working. The agreement was finalized in a month's time.

In order to increase the efficiency of work, the procedures were rescheduled and the functions and responsibilities redistributed.

The clear-cut way of interaction between the client and service provider was established. The HR department of Hearst Shkulev and InterMediaGroup keeps track of vacations, sick leaves, etc., using the 1 S Payroll and Personnel software. On the 25th day of each month, the data is uploaded to the server of the service provider who, within five days, completes the monthly payroll and the necessary transactions and uploads the processed data back to the accounting system of the publishing house. The security and confidentiality of personal data is protected by advanced technologies.

The result:

According to the most conservative estimates, the outsourcing of its payroll accounting saved the company over RUR half a million annually. It also allowed the client company to concentrate on its principal activities, while minimizing the time needed for solving auxiliary problems. The creation and successful introduction of in-house schedules regulating the distribution of functions between the client company's departments and the BDO outsourcing division allowed to enhance the quality and efficiency of all procedures.

The risks of low quality services, fraud and penalties imposed by tax agencies were excluded and human factor hazards diminished.

Procedures were described in detail and carefully established, document circulation set up and all payroll accounting procedures scheduled. The predictability of the involved costs was assured.