Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Agriculture Ukraine: Special Services related to Agricultural Companies

570 views

Published on

Special Services related to Agricultural Companies:

•Financial Due Diligence

•Controlling

•Management Reporting

•Tailor made Software Solutions

Published in: Business
  • Be the first to comment

  • Be the first to like this

Agriculture Ukraine: Special Services related to Agricultural Companies

  1. 1. Special Services related to AgriculturalCompanies:• Financial Due Diligence• Controlling• Management Reporting• Tailor made Software SolutionsJanuary 2013 Otten Consulting vul. Turgenevska 38, 01054 Kyiv, Ukraine info@otten-consulting.de +380 / 44 / 492 77 08 www.otten-consulting.de
  2. 2. Overview Typical peculiarities and typical mistakes in accounting of agricultural companies makes the management and understanding of agricultural companies difficult. In order to understand the financial situation of an agricultural company or to ensure a sound comprehensive accounting, widespread long term experience in this sector is a must. During more than 6 years of experience in the agricultural sector we have seen “everything” due to following accomplished tasks: •Financial due diligences carried out •Accounting policies designed and implemented •Management reports installed •Accounting software solutions improved Following this we can add significant value and achieve improvements for the management, investors and financial institutions involved in the Ukrainian Agro-Business.Otten Consulting | January 2013 | Services For Agriculture 2
  3. 3. Financial Due Diligence Problem: Lack of accuracy and skills of accountants or lack of importance to current/previous management often lead to financial statements which do not reflect the real economic situation of an agricultural company. Some typical mistakes occurring from that situation are: •In reality missing fixed and current assets or with wrong value •Negative balance in accounts for production or working materials •Huge amounts of advances paid and received •Wrong accounting of VAT implicating tax risks •Financial aid paid to employees in fact not properly accounted salaries •Wrong accounting of foreign currencies •Liabilities not reflected in accounts •No proper allocation of production costs •No sufficient information of profitability Solution: •A thorough in-deep analysis of the accounting data and an associated random check for primary documents allows to detects critical mistakes. •Based on experiences we know where nepotism in form of kick-backs etc. takes place. Comparable prices allow to estimate if reasonable costs of production •On-site inventory by Otten Consulting ensures independence and objectivity •Consolidated report that is easy to read and understandable even for individuals with little or no accounting experience.Otten Consulting | January 2013 | Services For Agriculture 3
  4. 4. Controlling Problem: Due to former soviet times and shortcomings in the education system there is a massive lack in economic thinking and financial planning skills. This makes a data driven management difficult, with adverse financial consequences: •Efficiency of production steps cannot be measured precisely and therefore an improvement can also not be measured •Incomplete controlling opens the door for attempt to defraud •Unreliable controlling increases the risk for creditors as they cannot assess the credit rating of the debtor •The excessive focus on primary documents hampers the comprehensive understanding of the in-fact financial situation Solution: •A controlling managed by an independent third party ensures there being no conflict of interest •An accurate controlling provides valuable data for management so that operational improvements can be measured. •A controlling that follows general accepted accounting principles allows comparison to other performers in the same sphereOtten Consulting | January 2013 | Services For Agriculture 4
  5. 5. Software 1S for accounting Problem: Many agricultural companies still work on a paper based system for accounting where a lot of hand writing takes place. This not only takes a lot of time but is also prone to errors and very difficult to verify. As in many other areas of life there are huge advantages of automation. Potential Solutions: •Full fledged accounting in 1S8 Enterprise special version for agriculture •Automated creation of standard management reports and tailor made reports •Training of local accountants based on an in practice value proved accounting policy •If necessary add special program code for special tasks like bar code reading, GPS tracking or special management reports •Resource planning, financial planning and warehousing •Consolidation of several legal entities and perform a consisted accounting of inter-company transactions. This reduces the number of people needed for this task.Otten Consulting | January 2013 | Services For Agriculture 5
  6. 6. Software 1S for accounting Problem: Many agricultural companies still work on a paper based system for accounting where a lot of hand writing takes place. This not only takes a lot of time but is also prone to errors and very difficult to verify. As in many other areas of life there are huge advantages of automation. Potential Solutions: •Full fledged accounting in 1S8 Enterprise special version for agriculture •Automated creation of standard management reports and tailor made reports •Training of local accountants based on an in practice value proved accounting policy •If necessary add special program code for special tasks like bar code reading, GPS tracking or special management reports •Resource planning, financial planning and warehousing •Consolidation of several legal entities and perform a consisted accounting of inter-company transactions. This reduces the number of people needed for this task.Otten Consulting | January 2013 | Services For Agriculture 5

×