Development of a commodity system and management accounting for LLC "MLK-TRADE"

18.06.2020

The MLK group of companies, working in the consumer goods market since 1995, and it has vast experience in delivering goods to both wholesale customers and retail customers.

Entering the highly competitive home goods market, the top management of the company, I realized that for the stable development of the project it is necessary to have a reliable modern information management system.

Automation needed a flexible product that would evolve in sync with business development and address new business needs.

As developers, they attracted a scientific IT laboratory at the KhPI Techno Park.

Together with a team of programmers, we formed our requirements for the system, which logically divided the project into 5 blocks:

Block 1. "Development of a methodology for management accounting and budgeting"

Block 2. "Budget Planning"

Block 3. "Payment calendar"

Block 4. "Management Accounting"

Block 5. "Document Management"

In our opinion, the key to success in carrying out all the work was mutual understanding between the project teams. We tried to clearly describe the goals and results that we would like to obtain, and the development team clearly captured and implemented our wishes, both in the development of the methodology and in automation in the software product.

Working as a team, we achieved the following results on project blocks:

Block 1. "Development of a methodology for management accounting and budgeting"

Have been developed and approved:

• The financial structure of the Company;
• The structure of budgets and reporting (Income and Expenditure Budget, Cash Flow Budget, Balance, Capital Cost Budget);
• Management accounting policies.

Block 2. "Budget Planning"

• The process and structure of functional and operational budgets are described. The results are enshrined in the Planning Regulation;
• Customized documents for entering planned data;
• Automated reporting forms for planned data.

Block 3. "Payment calendar"

• The business process “Approval of an application for cash flow” is described and automated;
• Developed and automated forms for making a payment plan for the week, which are used by all heads of departments;
• All cash payments at the approval stages are automatically monitored based on approved budgets;
• Automated register of approval of payments, with which you can approve / reject / transfer (partially or fully) the declared payments;
• The automatic generation of payment orders has been set up (based on the applications approved in the register), with subsequent uploading to the Bank.

Block 4. "Management accounting "

• Documents for making managerial evidence and rules for the formation of management entries have been set up;
• Specific analysts have been set up to analyze, from a financial point of view, the performance of the company as a whole, and each structural unit;
• The principles of accounting with VAT have been set up for “convergence” of data on cash flows with data on income / expenses;
• Configured reporting on actual data:
• Balance,
• Profit and loss statement (in three forms: general, broken down by CFD, and also broken down by CFD and cost centers),
• Cash Flow Statement (BDDS, CF),
• Capital Investment Report (CAPEX).

Block 5. “Document management "

• The archive structure for storing document cards has been set up;
  • The business processes “Tender for the selection of a supplier” and “Agreement of contracts” are described and automated;
  • The ability to control the implementation of processes at each stage according to time parameters has been implemented.

Results

As a result of the LLC MLK-TRADE project

has received a unified integrated financial management system that allows you to plan and analyze actual activities in the general information field, evaluate the influence of various factors on the financial result obtained, and manage cash flows in an on-line mode.

Given the difficult current situation in the Ukrainian economy, companies that do not have such a transparent and operational financial management system may lose business, because do not have reliable information about the real state of affairs in the company.

 

CFO
Alexander Bortko

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