Background

The client, a leading automobile dealer in India, with over 1,200 employees and $50 million of revenue, approached Proaegis with a peculiar problem with its accounting system. The company was using the manufacturer’s software for sales & purchase invoice generation, raising reimbursement claims from the manufacturer, and Inventory management. However, since the manufacturer’s software did not support accounting, the company installed another accounting software with a separate database. This resulted in duplicating the transactions in both systems and reconciliation issues due to different databases.

There was another issue of a high number of inter-branch transactions. While each location had its own collection accounts, all the payments were made from a single bank account from the Head Office. Also, there were a lot of inter-location transfers of vehicles, consumables and spares.

The client had to engage more than 60 employees for the accounting function, where more than two-thirds of the job was duplicating entries from the manufacturer’s software and Inter-branch entries across locations.

All these resulted in the company spending tremendous time on reconciliation, delays in obtaining information, high manpower cost, and lack of effective internal controls.

Solution

Based on its assessment, Proaegis suggested that the company implement new accounting software that will use a single database for the entire accounting process and automate the entries from the manufacturer’s software to the new software.

Challenges

The challenges posed before Proaegis and the client were:

• Selecting the right software that met the requirement


• Data storage without compromising speed


• Whether to maintain inventory in accounting software or not


• Optimize licence cost given the high number of users

Process

The project team, led by Proaegis and including key accounting team members and IT managers from the client’s side, identified SAP Business One as the appropriate software to meet the client’s needs. The software had better stability, wider acceptance, the ability to adapt to new changes quickly, inbuilt workflows, and the capability to have system controls.

The team identified the right implementation partner and oversaw the implementation. As part of the project, a small bespoke application that integrated into SAP B1 was created for the use of cashiers at various locations that reduced the number of licences needed. Templates were created to feed the output from the manufacturer’s software to SAP B1 on a regular basis. Many approval workflows and controls on inventory movement, funds movement, payments, etc were created in the system. And whenever, inter-company transactions occurred, the system would post entries in both cost centers.

Results

The project delivered its primary objective of elimination of duplicate entries and reconciliation of inter-branch transactions, which led to a reduction in manpower cost by 45% and timely access to information. The accounting process and data was standardised and many system controls were implemented. Inventory management in SAP helped the company to track price changes, costing, and item-wise profitability. The timelines within which statutory returns were filed were crunched. Required financial information could be provided to anybody at any location in the system. And with further development of dashboards, the management could see financial performance on the system.

"When we started working with Proaegis, our system was manual, cumbersome and inefficient and our books were months behind. The situation had a negative impact on people and everyone was frustrated. After the implantation of SAP Business One with the help of Proaegis, our books are up to date; invoices are going out on time, our systems are much improved and much more efficient, and the internal culture of the organization and the accounting department is completely different. Engaging Proaegis for this project was one of the best decisions the company has ever made.”

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