Pharmaceutical company

Duration: May 2012 - present

Industry: healthcare and pharmaceutics

Services:

• the partial outsourcing of accounting
• the processing of advance payments reports 

Technology set: SAP, Concur

Geography: Moscow and other regions of Russia

Challenges:

• Optimization of the procedure of coordinating and having approved advance payments reports so as to speed up the making of payments to employees, cut the cost of logistics and reduce accounts receivable

Solution:

1. Automation of the coordination of advance payment reports on the basis of the Concur software
2. Outsourcing of the processing of advance payments reports

Result:

• The increase, from 50% to 98%, of the number of timely presented documents
• The decrease of tax risks resulting from incorrect data and its late submission to tax agencies
• The timely verification of mutual settlements with employees and the prevention of the risks of doubtful debts
• The forming of an electronic documents archive
• The reduction of the cost of logistics

Description of the client: 

It is a family enterprise, a pharmaceutical company founded in Germany in 1885.

At this time, client is among the world's leading pharmaceutical companies engaged in developing and making medicinal preparations sold with and without doctors' prescriptions. The company concentrates on creating innovational medicines and therapeutic methods. Company is active across the world, continuously strengthening its market position and increasing its financial efficiency. The company owns scientific research centers, facilities for synthesizing and biosynthesizing active ingredients and pharmaceutical production facilities, including divisions cooperating with industrial partners and engaged in marketing and sales.

Challenges:

The client's business in Russia is characterized by a high degree of mobility of personnel working in practically every city and region of the country. Representation and business trip costs constitute a considerable portion of the company's budget. Its accounting department has to process between 600 and 800 advance payment reports monthly.

Of course, earlier, timely accounting for this great monthly number of printed documents mailed from all over, even the remotest corners of Russia was impossible. Each advance payments report had to be approved by the head of the regional office where its paper copy was delivered and after that sent to the company's Moscow office. If the accompanying documents were completed improperly, the whole thing was fully replayed. 

As the numbers of personnel increased, so did the costs of logistics and the amounts of accounts receivable. Courier services and a large number of employees filling in advance payment report forms being prone to errors, payments were delayed and conflicts arose. This was the reason why accountants responsible for this area of work often quit or were dismissed.

The procedure of processing advance payment reports had to be optimized in order to decrease the time their approval took, cut the cost of continuously mailing documents for approval and make payments in a timely manner.  

Solution:

This was why the company administration decided to introduce the system of the processing of advance payment reports based on the Concur software-as-a service (this means leasing software). 

According to client's head of the accounting, taxation and exchequer department, when selecting software, the company looked at such factors as the possibility of accessing the system from anywhere in the world, the availability of a Russian language interface and settings, accounting for the requirements of Russia's legislation, and no need for a large initial investment.

The installation and testing of the system took about four months. Over that time, all the adjustments required by client were made, all the data migrated and integrated with the SAP system, used by client for managing the company and doing financial accounting, and the required personnel was trained. 

The important portion of the project was outsourcing the processing of advance payment reports with the Unicon Outsourcing company.

Result: 

Now, company employees fill in all the necessary report forms at the Concur portal, attach the scans of payment documents to them and send them to their bosses for approval. As soon as a report has been approved, it is sent to Unicon Outsourcing professionals for verification. The latter will either accept the report or request the missing documents, if any. Once all the necessary information has been assembled, it is sent to client's accounting system for their employee's spending to be reimbursed. 

By this time, the Concur system has the following functionalities: the partially automated, in compliance with the company policies, preparation of reports, a mechanism of having reports approved, the emailing of document status notifications to employees and the electronic archiving of documents. A note is in order that any employee of the company may access the system at any time, using any device, including mobile. They also may delegate the preparation of reports and having them approved to their colleagues who have such rights. 

Besides, the possibility of adding to the system a module for setting up business trips and having them approved and another one for integrating Concur with clients' bank systems is being researched. Client intends that this should allow its employees to monitor, in real time, the movement of money through corporate cards. 

Unicon Outsourcing professionals put together monthly summaries as to the number of processed advance payment reports and errors made by client company's employees while preparing them. This helps to make added adjustments in the system and to give personnel clearer explanations about the rules of working with reports so as to reduce the number of possible future errors. All the documents and relevant correspondence with comments are electronically archived so that client employees and the Unicon Outsourcing project team may refer to the necessary data at any time. 

The project has resulted in the significant increase, from 50% to 98%, of the number of documents timely presented to and, accordingly, processed by the accounting system. The cost of logistics has been significantly reduced, the company's local offices now sending only correct documents to the home office, all errors corrected while electronic reports are being put together. Tax-related risks and the amounts of company's accounts receivable have also been reduced. The problem of excessive employee turnaround was also resolved due to outsourcing. On the whole, working with advance payment reports has become more comfortable for all involved.