Reorganization of standard interaction between the Commercial and Financial departments.

What factors prompted the necessity for reorganization?

Currently, there is a noticeable trend towards diversification of commercial activities within companies. This is evident in the segmentation of commercial operations into multiple areas, including distribution, trading, and small-scale wholesale trade. Organizing distribution is a complex and multifaceted process. The convergence of distribution and trading activities within a single company, coupled with the use of a wide array of financial instruments and credit products across multiple entities, significantly complicates the comprehension of ongoing financial processes, not only for regular employees but also for department heads.

Challenge: The company's operations are becoming increasingly intricate.

There is a need to integrate financial specialists into the Commercial Department's staff who possess the capability to comprehensively perceive and grasp the processes occurring within the department, their interdependencies, and ensure accurate reflection of the financial aspect of these processes within the accounting system.

Each area (distribution, trading, and small-scale wholesale trade) imposes distinct requirements on the capabilities of the accounting system (referred to as MS) concerning comprehensive transaction descriptions, standardized transaction procedures, status access, result forecasting at each transaction stage, primary transaction outcomes, transaction process dissection, etc. The aspiration to delineate the multifaceted nature of transactions within the accounting system, often involving the same counterparties, and to establish the most advanced accounting framework, inevitably leads to a substantial complexity of the accounting system.

The specification of transaction parameters, the intricate depiction of economic ties with counterparties, the necessity to navigate CS tools, and comprehend the connections between individual CS documents demand an ever-escalating technical proficiency from CS users. Crafting reports, interpreting them, and conducting analyses represent the subsequent tier of complexity in system utilization. This complexity is particularly pronounced when financing decisions for a transaction hinge, among other factors, on an online report.

Challenge: With the control system growing increasingly complex, there arises a heightened demand for more robust user support services. 

There is a continuous flow of information between FD and CD. Within this information flow structure, operational data predominates, characterized by stringent demands regarding delivery time, format, and content. Given the multifaceted nature of economic transactions (across multiple companies simultaneously), there is a pressing need for comprehensive oversight “the whole picture” of the process for correct provision of information about its part,understanding the correlation of the provided information segment with the entire process, selecting the appropriate format and emphasis based on information retrieval objectives, and possessing fundamental economic acumen pertinent to the recipient's operational domain necessitates proficiency from CD personnel. knowledge unusual for this area of work (both basic and current financial situation). The absence of the above knowledge or its insufficiency leads to “speaking in different languages,” which leads to significant losses of time to clarify circumstances, establish causes and find solutions.

The present complexity of conducting business and the financial landscape necessitate proactive management. It's imperative to minimize the timeframe between identifying a deviation, making subsequent decisions, and implementing corrective actions. Moreover, ensuring that the impact remains unaltered throughout the information transfer chain is crucial.

Frequently, financial issues presented to the FD for resolution are delivered in a condensed, distorted, or incomplete manner. This significantly limits the range of potential solutions and, consequently, diminishes the quality of decision-making. In the worst-case scenario, the problem may go unnoticed or only be identified at a stage when the situation has significantly deteriorated.

It's regrettable to note the communication between FD and CD staff, where direct information exchange is often preceded by a brief overview of basic economic principles and an update on the current financial state. Conversely, details regarding client relationships, complaints, or requests for assistance with transaction registration, consultation on shipping document packages, balance sheets, reports, etc., are discussed separately.

Challenge: There is a pressing need for an employee within the business environment who possesses a comprehensive understanding of the current business landscape, views business processes through a financial and accounting lens, and is capable of transforming design documentation information (requests and problems) into a communication format that is both understandable and sufficiently comprehensive for financial personnel. Additionally, this employee should act as a conduit for financial decisions, facilitating a two-way flow of information. 

Business development necessitates continual modernization of the team's relationship system, particularly evident in the financial realm. Within the FD, changes or decisions (pertaining to management, accounting, information flow, etc.) are typically communicated and recorded through thematic group meetings or general assemblies. As these changes often impact other departments, ensuring a high-quality and reliable information channel, as well as an effective method of information exchange, becomes paramount.

The incorporation of a Financial Department employee into the Commercial Department proved highly successful. Acting as "the insider in someone else’s team," this individual not only assisted in utilizing the management system but also served as a conduit for commercial information from the CD to the FD and financial information from the FD to the CD.

Challenge: There is a clear need for an employee within the commercial environment who actively participates in the discussion and adoption of financial decisions at the FD level. This includes decisions related to changes in the accounting system, the implementation of new financial schemes for relationships with counterparties, the launch and maintenance of new credit products, and other pertinent financial matters.

Reorganization initiative

1. Establish a dedicated department within the Financial Department Financial back office (hereinafter referred to as FBO).

2. Set up FBO workstations in each department of the Commercial Department.

3. Allocate the following areas of activity to the responsibilities of an FBO employee:

    a. Stay informed about the ongoing commercial activities within the relevant CD department, understand the department's current commercial objectives, and be familiar with the long-term assignments and policies set forth by the management of the CD and the company regarding the activities of the department.

    b. Assistance to the management and employees of the design department in using the control system:

         i. in reading on-line reports  

         ii. registration of transactions

         iii. collection and processing of financial information for communication with clients, conducting reconciliations, etc.

         iv. methodological assistance in the correct recording of transactions, maintaining and monitoring the balance of the counterparty

    c. Interaction with the FD accounting department:

         i. in terms of control of document flow (availability, correctness of execution, compliance of documents with CS data, etc.)

         ii. in terms of mutual settlements with counterparties (debtor/creditor) and contract work

     d. Interaction with the FD accounting department:

         i. Preparation of documents for payment

         ii. Control and justification of the payment amount

         iii. Questions about logging in/writing off payments

         iv. Feedback questions. Regular (on a daily basis) informing the management of the management company about the financial transactions carried out.

     e. Interaction with accounting department:

         i. Solving questions/requests from the enterprise accounting department

         ii. Resolving issues of department employees as employees of the enterprise

     f. Interaction with the control system programmer:

         i. Organization of feedback from CS users (collection and systematization of wishes, development of new reports (development of the algorithm, form, etc.), solving urgent problems (together with the head of the FBO)

     g. Interaction with FD management:

         i. Questions regarding taxation, providing information on the financial performance of the company as a whole

         ii. Assisting employees of the CD department in reading reports on the calculation of bonuses, the accrual of bonuses, the retention of debts and fines

     h. Generating financial reports on the activities of the relevant CD department for the required period, assisting the head of the department in reading reports, analyzing, commenting and drawing conclusions based on the data received.