The principles of building management reports, based on data from existing accounting bases

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    After spending several years on research in the field of automation of bookkeeping processes, we found and implemented a number of unique innovative technologies, as well as developed a methodology and a number of software products. But, in order to create applied solutions in the realities of everyday practice, we had to spend the last two years communicating directly with accounting specialists and consumers of accounting results.
    To describe the results of all studies, you will need to write a whole book, but first we decided to focus on the problem existing in real practice, which can hardly be called problem-free.

    The task of organizing management report generation processes based on rather scattered data in a non-standard format and according to non-standard requirements of managerial interpretation is present at each enterprise. Depending on the size of the enterprise, the level of profitability, the industry, various people are involved in the production of these processes, with different backgrounds and different views. In small micro-business companies, this is often done by the head himself, who can also be the owner at the same time. In small and medium-sized businesses, and this is quantitatively the largest segment, often this task is superimposed on accounting. In medium and large business, the concept of economist and financier appears, the position of financial director appears, which is higher in the hierarchy of the chief accountant,

    There are only one thing that unites these people regarding approaches to solving the problem of building management reports: for the most part, Excel tables are used as tools.

    On the one hand, Excel tables did not initially contain any methods and business logic, while on the other hand, they are functionally capable of providing very broad requirements. Although, with the obvious convenience of this tool, there are significant limitations.

    If very short.


    The lack of business accounting logic creates very poor, from the point of view of the basic systematics, construction. Those. each builds a structure for storing, processing and displaying data in accordance with their own level of understanding of these processes.

    Excel is often called flat. Apparently, this feeling arises because relational databases are not used, and the client-server architecture, but few who understand this in real practice. Flat and that's it.
    As a clear drawback - simultaneous collaboration with data is impossible or extremely difficult.

    1C + Excel.


    In general, spreadsheets solve a certain stage of the general task perfectly, so the systems begin to line up in a hybrid way. Data is maintained in databases (relational databases and client-server architecture). In Russia, the vast majority use various 1C configurations. A number of aggregate reports are manually generated in these databases, which are uploaded to Excel and then it’s a miracle that the experts in the unlimited possibilities of this tool master-collectors collect the necessary reports on non-standard management requirements.

    Carrying out our research for several years, we felt a clear trend towards this option of constructing management reporting procedures. In evidence, I can propose an experiment. On the hh.ru website, in the search for vacancies, type “management reports” or “management accounting”. You will receive a list of vacancies related to the functions of maintaining management accounting and building management reports. From these vacancies it will be possible to understand how the labor market formulates the requirements for specialists of these functions. In most vacancies there will be a clearly formulated requirement for excellent ownership of 1C plus Excel.

    Also, precedents can be found in the market when companies producing a software product for generating management reports position their products as a direct competitor to Excel. An example of Fingrad. “Have you already grown from Excel?” By the way, it is this manufacturer that very clearly articulates the shortcomings of using Excel tables in management accounting procedures. Still would! After all, they position themselves that way. One of the main arguments notably is the factor that Excel does not have double entries. And here the fun begins. Most practitioners will not understand this factor, and those who "grew up from Excel" will completely agree.

    The main forms of management reports.


    The main idea of ​​this factor comes from the fact that management reports should be in the form of a standard triad: Balance; Income and expense statement (ODR); Cash Flow Statement (ODDS). It is technologically extremely difficult to construct these forms if operations are not recorded on the principle of double-entry, and it is extremely difficult to do this in Excel.

    A lot of financiers still neglect these forms for building information management reports on actual results and, accordingly, in budgeting. I can quote the words of the financial director of one of the largest production and trading holdings in Russia: "I do not need a balance, I need a plan-fact." I wonder what she meant? It is clear that she does not need a balance, and under the plan fact she most likely meant DDS. But this person determines the structure of the management accounting system in a very large and serious commercial organization. The traditional construction of management accounting and budgeting systems on the initial basis of the monetary base, according to our research, is probably the biggest accounting problem in the segment of small and medium-sized businesses. And that is understandable.

    Some analysts argue that our economic educational institutions adapted to the requirements of a market economy only by 2004, and therefore only graduates after 2007 - 2008 began to more or less meet professional requirements. And all this time, since the restructuring, it was necessary to somehow control the business and analyze its results. Counting money is the most understandable and simple. Therefore, we first learned how to count money and make DDS reports, both a plan and a fact, in Excel (in our country it was always at hand, and in the latest versions), and then they began to try to take into account the accruals and strive to build a balance.

    According to our observations, this is a kind of evolutionary ladder for the development of management accounting in commercial enterprises in Russia. Those who are not very greedy and managed to earn enough money, they did easier, bought an SAP ERP system. And in the process of implementation, accounting procedures and functions were brought to the proper level at the level of business processes. But such systems not only cost several million dollars, they are also very expensive to operate. Small and medium-sized businesses naturally cannot afford such decisions in terms of their profitability.

    But still, it should be noted that there is an emerging trend in demand in this segment for management accounting, where the resulting reports are considered a full triad of financial reports, on the basis of which you can build a full-fledged financial analysis. For proof, let us return to hh.ru and in the same request “management accounting” in the vacancies we find clearly formulated requirements “Formation of management reports (Balance, ODR, ODDS)”. Two years ago it was a rarity.

    The main and most accessible source of data for management accounting.


    In this article, I consider the option of constructing management reports based on data from existing accounting bases. By management reports it is naturally understood, first of all, as a full-fledged triad (Balance, SDT, ODDS), but it is not limited to it. We need reports on physical values, and more detailed data, and a general financial analysis, and graphs. By management reports we will mean the main triad plus any other reports based on the data on business transactions that may be needed to inform management decisions.

    Why do we propose first of all to look at the option of using accounting data in management accounting?


    1. There is almost all the data that is needed.
    2. Data in accounting is recorded in accordance with the principle of double entry.
    3. Accounting is in all enterprises.
    4. According to our research, this is the most effective way, and such an approach can easily afford a small business, moreover, using the resources of existing accounting services without creating additional specialties.

    What is needed to receive management reports from these accounting databases?


    1. It is necessary that the company kept accounting records properly. This requirement coincides with the requirement of the law!
    2. We need a tool that will allow:
    a. Collect data from different databases.
    b. To interpret the collected data in the conditional rules of management accounting.
    c. Correct, delete, add data in order to correctly, from the point of view of management accounting, display information in reports.
    d. To carry out consolidation procedures (exclusion of intra-group operations and the establishment of correspondence of reference information) when the business includes several legal entities or business units.
    e. Analyze management reports by detailing, matching, charts.
    f. To do all of the above actions without the participation of special adjusters or programmers.

    A tool for converting accounting data into management reports.


    In the process of our development and implementation in practice, many tools arose, but the very first was a tool that allowed you to import postings from accounting databases (the source software does not matter), write down rules for interpreting accounting data in management accounting, add, adjust, delete data , consolidate them between several related entities.

    It was the easiest tool. Later, we created the possibility of integration with any forms of documents, i.e. the ability to import not only from accounting. Then it became possible to build a chain when data is imported from a source into a document with the possibility of correction and subsequent implementation in management accounting. All this has accumulated a significant amount of tools for comfortable work in practice. We used systems in very complex large projects for setting up managerial accounting and budgeting in complex diversified holdings. On the whole, the integration processes in holdings with a “zoo” of disparate different functional bases are so complex that they require a large participation of external specialists. And this is always design work. And it is always very expensive.

    But we wanted to create a simple and affordable scalable product, even for small businesses, that would easily be used by the usual practices of various accounting specialties without special involvement of any external specialists.

    Over the past two years, while researching the market and communicating with representatives of all parts of the consumer chain, we have decided that the most effective method, in terms of price factor (all resources expended) and quality, is to use the data from existing accounting databases. We took the initial developments and mounted a scalable affordable option. We included not only the ability to formulate rules in the program, but also customized preliminary options for the Russian accounting system, as well as options for ready-made reports. The product was named ACCCell (account + cell).

    The basic principles of building management reports, based on the data of existing accounting bases, I will describe specifically on the functions of the ACCCell program. This will not be just blah in theory, but instrumental methods justified by practice.

    The order of the system for converting accounting data into management reports using ACCCell.


    The first step is to import data from accounting databases. In the use case of 1C Accounting, there is the possibility of direct connection and synchronization, plus the ability to import through a file. As a result, we get a full copy of the list of transactions with all their contents, as source material.



    This operation can be performed by a regular accounting operator.

    If for a certain period the downloads are repeated, then we will see in the list which transactions are new, which have changed, and which are deleted. The system will require confirmation of these changes, and the specialist will be aware that they changed retroactively in an unclosed period.

    It is possible to download transactions from several databases and different legal entities. Each posting will have a data source identifier, and the body of the posting will have information about the organization. It happens that a business uses several legal entities, while there are no intra-group transactions, then you can easily receive consolidated reports by uploading all transactions to one database. If intra-group movements are present, then it is necessary to use the consolidation functions.
    ACCCell has a customized interpretation option and a customized version of the main reports, so you can immediately process downloaded postings and receive material for analysis.



    In the received report, all articles are detailed in various analytical sections. For example, we can deploy receivables directly in the report.



    And then expand the receivables for customers by counterparties.



    As a result, it takes several minutes to get ready-made basic reports from accounting databases.

    Analyzing the data of these reports, a specialist can easily find inaccuracies that can be both inside accounting and at the level of configured interpretation rules.

    In practice, the experts were very pleased that they, thanks to ACCCell, found many errors in accounting.

    The next stage of work will be analysis and correction

    .
    We can correct the data in various ways.
    If the automatic processing rule gives a system inaccuracy, then you can enter the most priority rule yourself (screenshot 5). This can be done without difficulty by a trained specialist.



    If you need to change the interpretation of a particular transaction, then an exception is easily made, and we immediately get the result.

    In ACCCell, you can easily enter manual operations that will complement or correct the overall picture, and you can also download data from other external sources, for example, Excell tables or other management bases, or bank statements, etc. The general scheme of ACCCell's work looks like this:



    tma is the main processor of accounting within the system, which uses innovative and patented data processing technologies. Thanks to this engine, you will not have problems with exchange rate and value differences, and the accounting process is fully automated.

    And finally, corrections can be made in the source accounting databases, then upload the data again and process, which takes very little time.

    The ability to interpret the data of accounting bases in the conditional rules of management accounting is one of the main principles and functionality of the tool for constructing management reports based on data from existing accounting.

    At the same time, another basic principle cannot be neglected. It is necessary to organize the accounting itself properly so that the data are entered in it in a timely manner, in accordance with the requirements of management accounting, and not RAS. For example, bookkeeping can be closed quarterly, which means that a lot of data is entered at the end of the quarter, although it could be entered daily. Management accounting may require monthly reporting and this imposes a requirement for data completeness in accounting on top of RAS requirements. It should be noted that the operation of closing the month is not necessary.

    Management reports do not end with only three core reports.



    In conclusion, one more principle should be noted. A tool designed to generate management reports on the basis of accounting data should be able to provide various kinds of analytics, including based on natural values ​​and in graphs.





    Additional functions



    In practice, we have come to the full conviction that management accounting cannot exist fully without the functions of consolidating a group of companies, budgeting and treasury.

    These features are fully implemented in ACCCell.

    Conclusion



    In this article, I have tried to reasonably list the basic principles for the formation of management reports, based on data from existing accounting bases. But in one article it is impossible to describe all the nuances that we have encountered in practice, and how these nuances are solved using ACCCell tools.
    We invite everyone who is interested in this topic to an open seminar and presentation of the ACCCell program, which will be held on September 30.
    Registration by reference .

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