Professional accounting services for an international group from the RES sector in Poland

Customer: a foreign company seated in the EU, member of an international group that is a leader among providers of clean energy, develops a network of RES companies in Europe, including intensive efforts in Poland. The customer was looking for a local, professional firm providing services around the country that would be familiar with the characteristics of the clean energy sector and guarantee scalability and continuity of the highest-quality accounting services.

For a dynamically growing international group from the renewable energy sources sector (RES), Poland has become one of the most crucial markets in the implementation of a long-term development strategy. The managers planned an intensive increase in the number of acquired companies but it involved making a decision on the method of handling and coordination of accounting and tax management in the expanding network of companies. The group decided to start a cooperation with a partner that would not only assume the liability for the accounting but also provide support in developing solutions that would be standardized for the entire group, taking into account the characteristics and demands of the clean energy sector and allowing full use of the potential and specificity of the local market and regulations.

The initial position and the needs of a customer from the RES sector

The dynamic development of the said group in Poland involved several key challenges:

• scalability of services – new companies launched on a yearly basis (initially about 10, then a dozen companies on yearly average, with a target of over 50 companies in total) required standardized accounting processes and one contact point with a complete insight and perfect overview of the operations of the entire group;
• language and industry experience – the customer needed an accounting firm that communicated in English and had knowledge in the scope of the RES sector, including complex accounting and tax matters;
• no own professionals and accounting systems in Poland – the customer did not have a chief accountant or a dedicated accounting system; the key requirement involved providing transparent reports adequate to the specific requirements of the customer, prepared within short deadlines (as part of the so-called month-end closing);
• tax risk – the customer did not have knowledge or experience in handling the complex tax regulations in Poland; that is why they did not want to expose themselves to the risk of irregularities in tax settlements.

Accounting solutions of MDDP Outsourcing adjusted to the needs of the RES sector

MDDP Outsourcing took the challenge by assuming the responsibility for the group’s accounting and providing the customer with support in the scope of reporting, process standardization and tax settlements by handling the tasks listed below.

1. Complete take-over of the documentation and a transparent organization of processes

As its first step, MDDP Outsourcing was entrusted with the documentation from the previous accounting firms. As part of the process, the team identified irregularities and shortcomings that required action. The experts elaborated a uniform account chart adjusted to the characteristics of the group, which allowed for coherent bookkeeping and transparent reporting in English in all of the entities, according to the group’s expectations.

2. Accounting services in line with the characteristics of the RES sector

Each stage of the cooperation acknowledged the specific characteristics of the customer’s business. The accounting team of MDDP Outsourcing supported the customer, among others, in the adequate recognition of economic transactions (e.g. proper classification of assets with the focus on the correct posting of the charge for connection to the power grid. The team also helped in the proper recognition of investments in tangible assets under construction, depreciation, posting of various operating costs – e.g. indirectly related to constructed energy storage). The team also provides comprehensive support in scope of the proper classification of revenue and costs in settlements of CIT, reliefs and subsidies, real property tax, or with regard to calculation of the interest rate of financial hedging contributed by energy providers and participants of preliminary power auctions.

3. Standardization and automation of group reports

One of the key requirements of the customer was coherence and reporting time (so-called quick month-end closing). The IT team of MDDP Outsourcing prepared tools that allowed for automation of financial reports in English which were adjusted to the requirements of the central office. With the tailor-made solutions, accountants were able to immediately react to the changing needs of the customer.

4. Support in tax risk and relevant risks

MDDP Outsourcing experts explained to the customer the nature of Polish tax regulations and the differences in reporting as well as provided a number of other hints concerning important financial and accounting aspects (e.g. they drew the attention to crucial tax-related matters in the completed and planned transactions). With the use of their rich experience, the outsourcer’s team clearly explained and discussed the potential risks and opportunities for optimization with regard to specific decisions or transactions.

5. Additional support for the comfort of a customer from the sector of clean energy

MDDP Outsourcing provided the customer with broad support – from translations and verification of the accounting and tax-related aspects of contracts (concluded e.g., with banks or leasing providers) from the perspective of the group’s interests, centralization of the correspondence address and on-demand access to the service address of the Tax Office, to continuous monitoring of the quality of the accounting documentation and ensuring the compliance with Polish regulations.

The advantages of outsourcing of bookkeeping to MDDP Outsourcing for a customer from the RES sector

• Operational support – the customer received comprehensive support in scope of collection of accounting documents from small service providers around the country as well as in the process of implementation of new companies, gaining one contact point with the knowledge of the entire group.
• One stop shop – thanks to the cooperation with affiliated entities i.e., MDDP Podatki and Osborne Clarke, the customer received comprehensive support in one place, including tax consultancy and help in legal matters. This allowed, among others, reducing the tax risk and save the customer’s time.
• Coherence, flexibility and scalability – a uniform account chart and standardization and automation of accounting processes, headed by development of a dedicated reporting tool, simplified the management board’s efforts regarding analyses, control and group consolidation in the face of the dynamically growing number of companies.
• Expert industry knowledge – MDDP Outsourcing provided the group with complete accounting support, taking into consideration the specific characteristics of the sector of renewable energy sources.

Thanks to the support of MDDP Outsourcing, the group was able to focus on the dynamic growth of their RES investments in Poland. With the effective management of bookkeeping, process standardization and professional consulting, the customer was not only able to minimize the tax-related risk but also ensure full compliance with the reporting needs of the group.

The Polish RES market – with its energy storages, photovoltaic farms or wind farms and the growing potential – requires specialist support. MDDP Outsourcing ensures not only a reliable handling of accounting matters but also provides solutions which help customers effectively implement their vision of development in Poland.

Author: Zdzisława Wiliczkiewicz-Szlęk, Manager, MDDP Outsourcing, Katowice

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