Uralkali (www.uralkali.com/ru) is one of the world’s leading producers and exporters of potassium. The company produces a substantial share of the world’s potassium chloride output and controls its entire production chain from potash ore mining to supplying potassium chloride to consumers worldwide. Uralkali Trading SIA, a subsidiary of Uralkali based in Latvia, commissioned us for an IT project.
Uralkali Trading SIA (further the “Company”) keeps records of its activities in euros using Microsoft Dynamics AX 2009. The Company’s accounting is done in accordance with Latvian accounting standards, while Uralkali group’s consolidated statements are in rubles and prepared in accordance with IFRS using Oracle HFM.
The Company’s financial indicators constitute a significant part of consolidated indicators so the Company’s financial department had to prepare the Company’s reporting in rubles. This was done manually using the group chart of accounts (“reporting form”) in Excel for subsequent data conversion and consolidation at group level.
To optimize the data preparation process, we decided to automate the transfer of the Company’s reporting in euros prepared in accordance with Latvian accounting standards to the group chart of accounts and ensure data transfer in rubles from Microsoft Dynamics AX 2009 to Oracle HFM.
We devised a data generation process to convert the Company’s reporting in the format required by the parent company using multi-level mapping algorithms, as well as various methods to determine exchange rates and generate exchange rate differences for the group’s reporting.
As per the new rules in the system, all changes are now made through a records log in Microsoft Dynamics AX 2009 by reflecting all reclassification and corrective entries to conform to the group chart of accounts, and only after this step, data is recorded in reporting indicators for the period. This considerably increases the transparency of received data, and it is also more convenient to work with such data now.
Based on our experience in converting local accounting data into IFRS data and automating IFRS reporting for Russian and foreign companies, we proposed an automation methodology that allowed reducing labor costs for completing the reporting form. We also made some comments for a more transparent Latvian accounting so that it is consistent with the automation methodology we used.