What our client needs
Our client is a producer of electronic components who wants to set up a distribution network in Ukraine. He needs to be sure that tax and commercial accounting of its affiliated companies in Ukraine is conducted in accordance with UA GAAP and UA tax code regulations. At the same time the client needs to know that financial reports show a transparent and realistic picture of his business. Since the client has not had any experience in Ukrainian business practices before and is not familiar with Ukrainian accounting standards, he has been searching for a reliable partner who could provide qualified accounting services and advise him about tax consequences of specific business operations.
How we add value
First we explained to the client the main specifics of doing business in Ukraine in respect to Ukrainian tax and accounting laws. Then we set up financial and tax accounting for the client's affiliated company in Ukraine and started to do accounting.
By that time the main task had been achieved. However, the client also needed a reporting for the German management under IFRS and a special Management Reports in Excel.
A major challenge was to make the client aware of one fundamental difference with Western Europe: form over substance. The consequence of this matter is that highest attention should be paid to primary documents that must be available in original, in official format and properly signed and stamped to be used as a basis for financial and tax accounting transactions. So document management is a very important topic for company's accounting in particular because the client completely outsources accounting to Otten Consulting. This means those primary documents are not just exchanged between customers, suppliers, employees and state authorities. Documents also need to be sent to Otten Consulting for processing. Therefore an efficient and reliable document flow is pivotal.
In the meantime the client's business has developed positively. Today our four full-time employees are dedicated to this client and we support and perform many business operations of the company, such as:
• Issue documents for customers (sales support).
• Manage calculation and payment of salaries/bonuses and other reimbursements to employees (HR support).
• Check and book documents from suppliers (expenses accounting and control).
• Participate in inventory taking (stock and fixed assets control).
• Make reconciliation of settlements with customers and suppliers (accounts receivable and payable control).
• Prepare all payments in online-banking system basing on client's approval (cash flow support).
• Cash Flow forecast or a Cash Flow report and participation in client's treasury management.
• We prepare all official reports/returns required by Ukrainian tax and accounting laws and deliver them by courier and via official online-program to Tax authorities or to State statistics. We communicate with tax authorities regarding all the issues of the client's taxes, including reconciliation of paid taxes, VAT return, tax audit support, disputes of tax authorities' decisions, reply on tax authorities' letters and requests.
As a result of our activity we provide the client with transparent and realistic accounting data (reflected in corporate form of a management report), as well as with properly calculated and timely paid taxes, managed Cash flow and controlled extra expenses, timely paid salaries and debts. Moreover, we always try to be one step forward. That's why we inform our client about all the tax or/and financial risks as soon as we see their possible appearance.
Of course such intense collaboration requires a very high level of mutual trust which is gained through hard work and cordial attitude, which, combined, give a very satisfying result worth all the means invested And certainly handling the accounting activities internally would not be cheaper taking into account the necessary knowledge, constant professional development, language skills and special reporting to Germany
All in all, we have undoubtedly added value to our client, and, therefore, he can now focus completely on his key competences having entrusted accounting and tax subtleties to the hands of professionals..