Transfer of accounting from Navision software to 1C database, organization of accounting and tax reporting in accordance with two standards in parallel – the Russian and GAAP

Case study on how we picked up the current processes of the client, organized the transition of accounting from Navision software to 1C 8.3 IFRS Accounting database, observing the monthly reporting deadlines, transferred all the data and set up outsourced accounting in parallel according to two standards – the Russian and GAAP.

In 2021, we implemented a project for a Russian company, part of an international group that occupies a leading position in the production and maintenance of centrifugal pumps, valves, automation systems for oil and gas, energy, chemical and other industries. The holding is represented in 55 countries and has the largest experience in the successful operation of pumps and pumping systems around the world. The turnover of the Russian division was more than 2 billion rubles a year.

We were able to secure this important client due to our stable reputation in the business community as a reliable and responsible partner, as well as the necessary experience and a team of specialists required to fulfill the client's requests to a good quality and in a timely manner.

Now, imagine the complexity of the situation the client found themselves in. Due to the unexpected departure of the chief accountant (at the very beginning of the calendar year), the company needed a resource for professional and competent preparation of annual accounting statements and tax reports, for monthly closing of GAAP accounts and preparation of a GAAP reporting package for consolidation in the corporate accounting system.

The company management decided to outsource the chief accountant functions to us. Thus started our cooperation, which after 6 months of work transformed into a move by the client to completely outsource general ledger and tax accounting and abandon internal accounting altogether. At that time, the internal team of accountants consisted of 6 employees, booking 20,000 client transactions per year.

As part of the project, we faced the following tasks:

• transfer the archive of accounting data (according to Russian the standards and the GAAP standards) from Navision software to 1C 8.3 IFRS Accounting software;
• set up accounting according to the Russian standards and parallel accounting according to GAAP standards in 1C 8.3 IFRS Accounting;
• continue to keep accounting records in the new database;
• prepare monthly tax returns for the Russian tax authorities and produce a monthly reporting package for GAAP;
• ensure simplicity and transparency of business processes for the management of the Russian division and for the European financial controllers of the holding.

The project timeline (stages, durations)

We began work on the project with the preparation of a plan for the transfer of the chief accountant functions to us in order to complete the tasks in accordance with the planned deadlines.

Stage I. Hand-over of chief accountant’s responsibilities - 1 week.

Stage II. January reporting month closing, preparation of the GAAP reporting package- 2 weeks.

Stage III. Preparation of mapping for translation into GAAP, coordination with group financial controllers - 2 weeks.

Stage IV. Setting up a 1C database, transferring data from Navision - 1 month.

Stage V. Beginning of accounting in 1C 8.3 IFRS Accounting, preparation of the monthly GAAP reporting package based on 1C with subsequent loading into the international group’s corporate software.

Stage VI. Reconciliation of accounting data with international financial controllers.

The challenges

Since the client was faced with a simultaneous departure of the chief accountant and her deputy, a transfer of fully reconciled accounts was out of the question. We had to rebuild all the business processes with the head office, gain our own understanding of the company's accounting methodology and learn to prepare the GAAP month-end reporting package.

The second difficulty was the corporate monthly closing deadlines could not be moved. Because of this, we were limited in time and had to solve several tasks in parallel: we prepared reports in a short time, set up 1C 8.3 IFRS Accounting, transferred data to it and eliminated errors from previous periods.

The team

A team of 9 Accetera specialists was put to work on the project:

• Accountants - 7
• Technical support team 1C-programmers - 2.

The Accetera team took over general ledger and tax accounting, as well as GAAP accounting, monthly closing and preparation of GAAP data for uploading to the corporate system within a clearly defined timeframe, as well as full responsibility for the preparation of accounting statements and tax reports, submission of reports to the regulatory authorities in accordance with the Russian law, communication with customer representatives, both internal and external.

The 1C technical support team provided software implementation for tasks related to transferring the data archive, developing the algorithms for converting the postings to the 1C format and automating business processes.

The results

The project was completed in 2021 and met all the established goals and deadlines.

What the client received:

• Accounting in 1C 8.3 IFRS Accounting according to Russian standards and GAAP standards.
• Completed reconciliation of local and GAAP accounts.
• A reliable team of specialists who completed the tasks in a timely manner and with high quality.

What we got:

• A satisfied and grateful client.
• A new order from the same client to provide accounting and tax reporting services for their office in Kazakhstan.