Transition to a New Accounting Firm During a Tax Year

Change of the provider of accounting services may prove to be a big challenge. Especially when the need for this change arises during the ongoing tax year and requires quick action on the part of the new accounting office. Among the numerous implementation projects, our experts from Warsaw and Katowice are willing to undertake even such complex operations.

The implementation project described below concerns a Group from the biotechnology industry, which includes a dozen or so entities. This required our team to plan and carry out all stages of work very carefully. In this case, the change was motivated by the Client’s need to improve internal accounting processes, including, among other things, switching from paper invoices to electronic ones, changing their approval process to a digital method, and then integrating the electronic document workflow with the accounting system.

FINANCIAL AND ACCOUNTING SYSTEM – DATA MIGRATION

The transfer of accounting data from the current provider of accounting services is a key element in the process of switching to a new accounting firm during a tax year. Regardless of the system used to date, it is necessary to ensure that tax settlements of the entities are prepared within the statutory deadlines, including those related to CIT, VAT as well as financial statements.

In the case of implementation for the Group discussed, the migration of 20 thousand lines of records from Excel (i.e. a few thousand accounting documents) required very careful planning of the entire process to ensure timely tax settlements.

ELECTRONIC DOCUMENT WORKFLOW AND PAYMENTS

The configuration of key accounting processes, including document workflow as well as payments, is just as important as data migration between systems. Thanks to the integration of the financial and accounting system with the electronic document workflow, it is possible to change the invoice approval method to a modern, fully digital one. The deployment of EDW makes it possible to replace paper invoices with their digital versions in almost 100%. In this way, the Client can approve and check the status of documents from anywhere in the world, at any time.

As in the case of data migration, the activities related to the implementation of the digital workflow of invoices do not interfere with ongoing accounting operations, so they can take place in any period of a tax year if necessary.

Switching to EDW means not only paper saving and greater efficiency in the document approval process but also a great facilitation in any tax audits or verification procedures. With invoices in electronic form, we can – as part of our cooperation – support the Client during tax audits and thus limit the Client’s involvement in this process to a minimum. In this way, the Client can focus on running their operations, and we take care of the rest.

ACCOUNTING FOR EU FUNDING AND R&D PROJECTS

Like many businesses, the Group discussed in this case study has also used subsidies from the state budget as well as the budget of the European Union. The support provided by the MDDP Outsourcing team extends to the processes of obtaining funding and reimbursements and consists in providing relevant documents and data to account for the projects. What helped us keep appropriate records for this Client for the purposes of subsidies and accounting for them properly was a special document code that had been created. Thanks to this, we were able to verify at any time the level of costs incurred within individual projects and the amount of funds available.

As the Group additionally carried out a number of research and development projects, it was necessary to appropriately recognise costs in dedicated separate accounts so that a given project could be recognised as an intangible fixed asset in the appropriate amount in the future. In order to meet the Client’s expectations in this regard, we modified the chart of accounts accordingly.

COOPERATION IN THE PROCESS OF TRANSITIONING TO A NEW ACCOUNTING FIRM

At the very beginning of our cooperation, we implemented a series of regular meetings and teleconferences with the Client’s Team to achieve the proper flow of information, and we became a real support for the Client’s employees to ensure seamless execution of particular duties. We were also the link that was gathering knowledge about individual processes taking place in the organisation. Moreover, the added value of such meetings was also gaining knowledge about events that could influence the content of financial statements.

Although the process of switching to a new provider of accounting services is certainly a big challenge, there are solutions and procedures that have been tested in practice and make such operations possible also in the course of a tax year. For entrepreneurs, this means a chance to benefit from improvements in the financial areas of the business without the fear of exceeding statutory deadlines.

Author: Mateusz Masternak, Team Leader at MDDP Outsourcing