Case Study – SSC
Supporting Swiss owned group in founding SSC abroad
In the first round, two countries were involved from the CEE region, where MB Advisory Office helped to found 12 pilot companies.
The main tasks and challenges were:
- cultural and language barriers
- migration of different bookkeeping systems
- synchronizing different administration processes
- staff reduction of local offices
- compliance with local accounting and bookkeeping regulations in both countries
- managing fluctuation in the implementation phase
- transferring know-how, organizing courses and further trainings
Transferring knowledge
One of the tasks the MB Advisory Office had was to transfer knowledge from the local offices to the SSC. Our client’s vision was to completely transfer all administrative (bookkeeping and accounting) tasks to the SSC abroad and close all local offices. Since the SSC needed professional support, MB Advisory’s recommendation was to keep employees in key roles in order to mitigate tax-related risks and maintain a high level of efficiency.
Invoicing
The original SAP version in use did not meet Hungarian requirements due to lacking country specifications. Thus, the local accounting teams prepared all outstanding invoices (2,000 pieces per country), while SSC developments and different training programs were in progress.
The personnel had to be trained to properly use the software by the time it was ready. The most difficult part in this process was dealing with different locations: while the software and IT support were located in Spain, the SSC was being built in Slovakia, while everyone had to be compliant with Hungarian laws.
Naturally, the language of communication was in English which all staff members spoke on an excellent level, but the working culture in these locations were very different, so the same content had different meanings, depending on who was interpreting it. These cultural and language differences can significantly slow down the processes. Even though many of the staff’s mother tongue was Hungarian, most of them had to use English to avoid misinterpretations.
Our team of consultants coped with this challenge successfully. One of the learnings was that in case of centralized IT support, local professionals are needed too, as it takes a lot more time, money and human resources for the company to develop its own solution when it might already be available locally.
Transfer of accounting processes and tasks from one country to another
Assessment, learning, handing over.
These three were the milestones during the knowledge transfer. Plenty of interviews were made with participants involved in the accounting processes. One issue was with POR, which is not necessarily an accountant’s task, but a mistake here can lead to other mistakes in the income statement and/or balance sheet. The mapping of processes were made for the whole company’s operation. This part of the job took three months to complete.
There were numerous process charts and descriptions in all areas and all involved countries. Our major tasks were in the areas of general ledger accounting, accounting for vendor invoices, accounting of bank statements, mixed accounting, bank transactions, invoicing and reporting.
Localizing bank transfers was the easiest task, in which the first successful handover and sequel was made. Our biggest challenge was accounting for vendor invoices, from order to payment. The most difficult part was to harmonize different accounting systems that the companies had used – there were a few that did not use SAP as their ERP, and there were others that used different versions of the software.
At last, the MB Advisory Office team successfully passed local processes to the SSC. The only change the company had to make in their plan was to keep the start of a few processes (like invoice receipt and registration) in the local offices before forwarding the data electronically to the SSC. In this process they have introduced the use of character recognition scanners in order to minimize the manual work needed.
One of the key learnings was that VAT treatments have to remain at senior colleagues at local offices in order to mitigate the risk of errors in VAT deduction.
