1

WWW.RUSSIA-BRIEFING.COM

Issue 13 • May 2015

RUSSIA BRIEFING

RB 2015 2 issue.indd 1 5/27/15 11:53 AM

In Cooperation with

ERP Systems: SAP vs. 1CP.04P.06P.08P.12P.14P.15

ERP Systems in Russia - 1C vs. SAPRussian Accounting Aspects in ERP Implementation IFRS Reporting from SAP & 1CSAP Solutions for Sales and Logistics VATB2B EDI (1C & SAP)

2

Investment in Russia and its neighboring countries requires good controlling tools. An effective ERP system is key in order not to risk the entire investment with poor transparency. Those who implement a full ERP system usually use either SAP or the Russian accounting program 1C (pronounced as “1S”), the latter also has the capability to go far beyond Accounting and Taxation.

Very often you hear that experience in implementing an ERP system in one of the other BRICS countries, or even Eastern European countries such as Poland or Hungary, does not necessarily convert to useful knowledge of ERP in the Russian market. Another common misunderstanding is the assumption that an SAP team from the HQ office could fully manage the ERP-implementation in Russia, Ukraine, Kazakhstan, etc. If the stereotypical generalization that “Russia is different” is true at all, then it applies here for ERP systems. In the following pages, my colleagues will describe for you some specific processing features in Russia, looking at accounting matters, tax compliance issues, special features in invoicing processes, etc.

There is also something for those who have little hope for Russia’s bureaucracy to shrink: quite a few “popular” tax forms such as Acceptance Protocol and VAT-invoices do not need to be printed out and signed on paper any longer, they can be exchanged

between business partners (B2B) in electronic form via the Internet. Automation and simplification has a chance in Russia!

Implementation of SAP or 1C as your ERP system in Russia is not only a matter of cost but is also a

question of implementing the compliance rules and conceptual matters of the accounting and reporting systems you believe in. My colleague, Thomas Titsch, the responsible Director in our company for ERP systems, e x p l a i n s t h e d i f f e r e n t approaches of the various systems.

Before you decide which i s t h e b e s t E R P s y s t e m for you in Russia and its neighboring countries, it is

important to properly compare the advantages and disadvantages of the different systems. Such a comparison should not end at implementation considerations, it should also comprise plusses and minuses after you start using it – expense calculation for ongoing use of the system as well as questions of fast availability of new versions, and also questions of its ongoing conformity with compliance rules should influence your decision for one system or the other.

And finally: Get advice from someone who does not only consult and implement ERP systems, but from someone who also actively uses the ERP systems.

Introduction

ReferenceRussia Briefing and related titles are produced by Asia Briefing Ltd., a wholly owned subsidiary of Dezan Shira Group.

Content is provided by Dezan Shira & Associates’ partner company SCHNEIDER GROUP.No liability may be accepted for any of the contents of this publication. Readers are strongly advised to seek professional advice when actively looking to implement suggestions made within this publication.

Kind regards,

Ulf SchnelderManaging Partner

SCHNEIDER GROUP

Ulf SchneiderManaging Partner

SCHNEIDER GROUP

DisclaimAll materials and contents © 2015 Asia Briefing Ltd.

3

CreditsPublisher / Chris Devonshire-EllisEditor / Edward Barbour-LaceyDesign / Jessica Huang & Estela Mi

Table of Contents

ERP Systems in Russia - 1C vs. SAP

Russian Accounting Aspects in ERP Implementations

IFRS Reporting from SAP & 1C

SAP Solutions for Sales and Logistics

VAT

B2B EDI (1C & SAP)

P.04

P.06

P.08

P.12

P.14

P.15

This Issue’s Topic

Russian ERP Systems: SAP vs. 1C

“? ” Stay informed (http://schneider-group.com/news)

Questions and Answers (http://schneider-group.com/answers)

The 2015 Asia Tax Comparator

India: Your China Plus One?

Accounting and Reporting

ASIA BRIEFING Employing Foreign Nationals Across Asia

State by State: ASEAN and Texas Trade

Understanding Chinese Economic Reform: Where Foreign Investors Go Wrong

Yarn Forward’s Effect on the Trans-Pacific Partnership & Vietnam

Online Resources from SCHNEIDER GROUP

Online Resources on Emerging Asia

We at SCHNEIDER GROUP consult and

provide our international clients with the

back office services they need to expand

their business into or within Russia,

Kazakhstan, Belarus, Ukraine, Poland and

Germany.

With 500 experts in 11 offices across six

countries, we offer services like support

for market entry, import, accounting, tax,

legal consulting and implementation of

ERP systems.

More information on

www.schneider-group.com

About SCHNEIDER GROUP

4

Russia Briefing • Issue 13 • May 2015

ERP Systems in Russia – 1C vs. SAPBy Thomas Titsch, Director ERP

SCHNEIDER GROUP

When a foreign company wants to enter the Russian

market, they need to answer the question of

which system to use for accounting and enterprise

resources planning. Usually, this means either rolling

out the corporate template they are using at home

or setting up a local solution. In reality, in the vast

majority of cases, this comes down to a decision

between the most common systems in the Western

corporate world: SAP and the Russian 1C.

What to consider?When you are just about to start your business in

Russia, 1C has a lot of advantages. The system is

well adapted to the Russian legal requirements

and common practices in the market. Hence, the

system can be implemented within a short time

frame. In Russia, 1C is nearly an industry standard

for accounting and ERP; virtually every Russian

Analyse Design Customizing/Development Test Go-Live Support

Migration ToolsMapping

Data Cleansing

Training material

Migration Tests

Training

Productive Migration

Training

Change management & Communications

Legal Requirements

Data Migration

ExperiencedConsultants

ChangeManagement

Knowledge ofthe Legacy

Accountants that know both worlds

* Process of implementing a new ERP system

5

Issue 13 • May 2015 • Russia Briefing

accountant is skilled in using the system. In case the

legal requirements change, the system is updated

very quickly and can be implemented in a very

short time.

By comparison, SAP is strong in facilitating

harmonized business processes for companies

working around the whole world. It is also known

for it’s capabilities in logistics, production planning,

handling large volumes of data. These features

combined are a precondition for “just in time”

production, and integrating into global supply

chains.

The trade-off for this flexibility is more complexity in

the system setup: its wealth of options may become

a burden. Even with simple business processes,

an SAP roll out could take four to six months plus

one to two months post go-live support. SAP may

also require additional coding to keep the existing

SAP template running under the conditions of the

Russian market.

Transparency and Compliance Other strengths of SAP are transparency and

compliance. Once an accounting entry is made,

only some text description can be changed. All

financially relevant fields are fixed. If there is a

mistake, an accounting entry needs to be reversed

and entered again.

In 1C, this can be achieved only by organizational

means and authorizations. Otherwise, as long as

the accounting period is open, you could change

financially relevant information in a posting later on

or just delete the entire accounting entry.

In SAP, there is a clear distinction between the

document date (e.g. the date printed on an invoice

received), the posting date (date, when a document

is put into the books), and the system date (i.e. the

date and time of the actual data entry). In other

words, when you doubt whether a particular

document was entered when it should be, in SAP

you can see exactly when it happened. 1C does not

make this distinction.

Besides that, the SAP authorization concept

allows a sophisticated set up of roles and access

rights allowing a clear segregation of duties and

SOX compliance according to Western standards.

Last but not least, language matters. 1C supports

Russian by default. There are some more or less

comprehensive English translations by third party

providers on the market.

SAP supports basically all relevant languages

(including Russian).

Not without professional supportGiven the points above, if the business reaches a

certain size with respect to revenue, data volume or

number of users, companies have a clear tendency

towards SAP.

When moving from 1C to an SAP system, you

should ensure the support of consultants, who are

experienced in Russia and know the differences

between legal requirements and common practice.

Another advantage that cannot be valued highly

enough is the participation of accountants that

know both worlds, 1C and SAP. They are able

to reassure your employees, explaining the

differences between the systems in a way that is

understandable for your accountants and thus ease

the parting from the “beloved” legacy system. RUSSIA BRIEFING

6

Western companies should be aware of Russian

accounting aspects when implementing ERP. In

the past, the Russian understanding of enterprise

planning was accountant driven and to some

extent this remains. In order to understand Russian

aspects in ERP implementations, you need to look

at the aspects of the accounting approach.

Where do the different approaches come from? At

this point, it makes sense to look back in history for

a moment. In the pre-computer era, the Russians

invented the concept of account correspondence.

That means that the accounting entries were made

into chessboard arrangements like in the picture

below.

As an example, an accounts payable invoice would

be represented by 2 numbers, 100 RUB net value of

purchased goods plus 18 RUB VAT (the light blue

boxes in the picture). Accordingly, the accounting

entry would look like this:

This approach actually has some advantages

for analysis and error search. In this chessboard

arrangement, it is easy to see the relationships

between the accounts and you would immediately

see incorrect postings, e.g. VAT against Material.

Russian Accounting and ERP systems, e.g. 1C,

automated this particular approach and thus have

a different internal data structure from SAP R/3.

Now, this approach also has some implications:

• When reversing a wrong accounting entry, you

need either to reverse the postings or you should

be able to just delete an entry; otherwise, the

debit and/or credit side of an account would

be overstated/understated and all the reports

build on that principle would not work. Actually,

Russian accountants avoid reversals wherever

possible.

Russian Accounting Aspects in ERP ImplementationsBy Thomas Titsch, Director ERP

SCHNEIDER GROUP

10

100

100

18

60

94,4

14,450

RAW15

GR/IR19

VAT in40

Materials51

Bank60AP

62AR

68VAT out

90Revenue

10RAW

15GR/IR

19VAT in

40Materials

51Bank

60AP

62AR

68VAT out

90Revenue

Good receipt A/P Invoice receiptCost of Sales A/R Invoice issueIncoming Payment

Account Debit Account Credit Amount

GR/IR Clearing (15) A/P (60) 100

VAT (19) A/P (60) 18

7

Issue 13 • May 2015 • Russia Briefing

• Accountants are very used to searching for errors

by using account correspondence as a tool.

• It also leads to some common practices unusual

for Western accounting, e.g. posting of revenue

as gross amounts with subsequent correction

of VAT.

• Using clearing accounts for segregation of

duties (e.g. bank clearing account) is not really a

common practice.

• The data structure in SAP and 1C is different. For

example, the number of line items in an accounts

receivable VAT-invoice is different in 1C and SAP:

And in a Western SAP system, the A/R VAT-invoice

would look like this:

So, a lot of requirements you will receive from the

accountants during the analysis phase of your

implementation project have their root cause in

this accounting approach and in the desire to

use account correspondence for reconciliation

purposes.

But even without account correspondence,

accounting in Russia is way more formal than in

the West. As an example, even minor purchases like

pencils have to be taken on the balance sheet and

can be expensed only after use. When purchasing

merchandise, all connected costs like transport

services, customs duties have to be put to the

balance sheet and can be put to cost of goods

sold only after the merchandise has actually been

sold (in other words you cannot really use standard

pricing for merchandise).

There are many more examples like this; for

those who want to go deeper into the details,

SCHNEIDER GROUP has published the Brochure

“Accounting in Russia: The 10 most common

Accounting Transactions”.

There are also some specific Russian features

in logistics handling that are discussed on the

following pages, e.g. the handling of the customs

declaration reference, pre-defined print forms for

the VAT-invoice and delivery note (TORG-12), etc.

From a technical point of view, both 1C and SAP

come with solutions to the specific Russian features.

Due to its focus on companies with international

business, SAP might require the according system

settings and tests, where 1C in most of the cases

comes with ready-to-go solutions.

The important thing to know is: what is the legal

requirement, what is common practice and what

is just nice to have.RUSSIA BRIEFING

1C SAP

Account Debit

Account Credit

Amount Account Debit / Credit Amount

A/R (62) Revenue (90) 94.40 A/R (62) D 94.40

Revenue (90)

VAT (68) 14.40Revenue

(90)C 94.40

Revenue (90)

D 14.40

VAT (68) C 14.40

1C

Account Debit / Credit Amount

A/R (62) D 94.40

Revenue (90) C 80.00

VAT (68) C 14.40

8

IFRS Reporting from SAP & 1CBy Oleg Galiulin, Senior SAP Expert and Yuriy Zarya, IT Project Manager

SCHNEIDER GROUP

Choosing an ERP SystemCurrently, all international companies have to

prepare their financial statements according to

both International Financial Reporting Standards

(IFRS) or Generally Accepted Accounting Principles

(GAAP), and local reporting standards of the

countries they work in.

In addition, the more their businesses grow, the

more complex informational systems are needed.

At present there are plenty of IT companies that

are ready to provide self-engineered ERP solutions.

The changing complexity of a company’s IT needs

makes it difficult for a company to choose the ideal

ERP system.

Let us consider this problem in a typical example

of entering a new market (e.g. Russia). The process

usually begins with the launching of a new business

unit. When opening a representative or a small

branch office, the company does not need to use

a heavy IT system as its reporting needs are covered

with a light version of ERP software provided by

local vendors (e.g. “1C” in Russia). But when business

activities grow, and the company opens a Limited

Liability Company to engage in complex export/

import operations, it needs to use a full-scale IT

solution. This solution should:

• Completely consider local accounting and tax

requirements.

• Report a clear and confidential view of the

current business processes and overall situation

in the company.

• Provide quick access to data transactions and

required business analytics.

SAP SolutionIn this type of case, the typically recommended IT

solution is provided by the indisputable leader in

business software development – SAP. Among the

rich variety of available products, SCHNEIDER GROUP

advises businesses to use the so called “best-practice”

solution (the “best-practice” stands for “the optimally

built” - a new line of solutions based on previous

implementations of IT systems by SAP worldwide).

This product provides a pre-configured IT system

that already complies with Russian legislation.

Moreover, functionality can be expanded with

special industry enhancements (e.g. retail,

production, etc.) without hindering its compatibility

with various companies. SAP All-in-One is

composed of different blocks (called “modules”) -

such as Financial Accounting, Controlling, Banking,

Logistics, Assets Management and many others -

that provide an opportunity to create a an optimal

solution that will satisfy the client’s business needs.

SAP Finance FunctionAt the same time, the core of each system is

comprised of finance and logistics processes. And

in this case, SAP provides a clear standardized

solution for IFRS reporting that can be used in Russia

as well. The non-complex (but highly important)

customization of this function includes:

• General FI customization by maintaining parallel

ledgers (IFRS and RAS), mapping IFRS and RAS

(Russian Accounting Standards) accounts –

through IFRS hierarchy creation, IFRS standard

reports maintaining, etc.

9

Issue 13 • May 2015 • Russia Briefing

• Special customization of related modules, which

are implemented in the client’s system, e.g. assets

accounting, leasing and others.

Architecturally, the provided solution is based

on a mix of sequential and parallel methods

of accounting. This approach is called “mixed

method” as it combines parallel accounting

and periodical transformation (called “data

translation”). Therefore, when the financial posting

is made, the relevant data goes either to both

financial ledgers (IFRS and RAS) or only to one

of them. This separation is made simple by using

different transactions during the posting.

Out of the other benefits that SAP IFRS functionality

brings to the client, the following should be

mentioned:

• Flexibility – as various companies can easily adopt

their solution to their business needs.

• Fast implementation – as a provided standard

solution can be easily localized and scaled.

• Support of corporate business standards – as SAP

in many cases is used as a corporate ERP system,

its implementation from the very beginning in

local business units brings compatibility in one

stroke, thereby cutting further IT costs.

SAP Management Accounting and Results AnalysisAlong with that , SAP Al l- in-One Finance

functionality also provides the company with

a flexible managerial and profitability analysis

reporting. Highly customizable, flexible, profound

solutions for management accounting (with dozens

of cost object types, allocation bases and methods

to use) provide the opportunity to deliver the most

dynamic solution for the company.

It is not possible to make a complete financial report

of a company without up-to-date reports on results

analysis. For this purpose, SAP All-in-One Finance

provides a special function – CO-PA (Controlling

and Profitability Analysis). This module analyzes

profitability by collecting costs and revenues along

with relevant characteristics thereby acting as a

strategic and financial reporting tool. Using this,

the management of the company can easily get

information on the profit of a certain product in a

certain region by a certain sales person or customer.

Such information can be easily aggregated (for

conducting overall analysis) or narrowed down to

a certain transaction (if more in depth analysis is

required). For an accelerated implementation, SAP

provides a pre-customized module (with the most

commonly used characteristics), so the client could

DBF  

XDTO  EDI  

10

Russia Briefing • Issue 13 • May 2015

activate this module within the shortest period of

time and with minimum cost.

For all these reasons, if a company decides to run an

SAP implementation project (should it be rollout,

upgrade, enhancing, or just support) a skilled IT

consultant is needed. A qualified ERP integrator

will choose the most suitable solution for the

company’s business, perform implementation, and

control risks. So in the end, the company will get

the best solution, which will increase efficiency for

its business.

IFRS Reporting from 1CStandard 1C solutions for Russia are focused on

addressing Russian management and accounting

requirements (RAS). At the same time, all cross-

border businesses have to prepare their financial

statements according to standards that are

different from RAS. Depending on which country

the company’s headquarters are located, it could

be IFRS, GAAP, HGB-2, or others (hereinafter, this

collection of foreign accounting standards will be

referred to as ‘IFRS reporting’).

IFRS reporting can be prepared from Russian

accounting data, but, as the business grows, it will

require an increasing amount of manual work.

However, to automate this process there are a

range of special solutions for IFRS accounting and

reporting on the base of Standard 1C solutions.

SCHNEIDER GROUP advises to use “the best-

practices based” solution ITAN, which combines the

most transparent structure inside the 1C platform

and compatibility with standard 1C solutions.

ITAN uses resources from the RAS database and

does not change the default settings of a standard

1C database. The menu of ITAN is accessible within

1C configuration and there is no need to become

acquainted with a new program or interface. ITAN

uses the standard forms and layout of 1C. The most

remarkable features of ITAN are:

• Alternative charts of accounts for corporate/

IFRS needs, which can use any currency and are

flexible enough to meet the requirements of

individual corporate standards

• Mapping of charts of accounts which define the

rules for translation of documents and give an

opportunity for flexible allocation

11

Issue 13 • May 2015 • Russia Briefing

• Translation of postings from RAS to alternative

charts of accounts with a flexible schedule for

automatic translation: upon posting, for a given

period (monthly, daily, every minute)

• Powerful reporting tool which provides easily

adaptable individual corporate standards reports.

The standard reports include balance sheet, P&L,

cash flow, etc.

• Reports by various controlling dimensions,

like cost/profit centers, business lines, sales

managers, clients, projects, transactions

• Reports can be produced and downloaded in

various formats

With experience in many projects which were

realized in different countries and on the base

of different 1C solutions, we can know how to

implement and work with IFRS reporting tools

for 1C.

SCHNEIDER GROUP provides you with a full range

of services regarding ERP implementation, from

a single advice to a full-cycle implementation

project. RUSSIA BRIEFING

12

Russia Briefing • Issue 13 • May 2015

SAP Solutions for Sales and Logistics By Albina Safina, Senior SAP Expert

SCHNEIDER GROUP

SAP software solutions help companies to improve

the efficiency of enterprises in Russia and to

respond operatively to changes in the requirements

of legislation in Russia. SAP rapidly develops

procedures and documents required under the

new regulations. The country version of SAP for

Russia provides standard statutory print documents

required for different business processes: sales,

receipt and return, transportation and movements,

and inventory.

Revised and Corrected VAT-invoicesIn accordance with the government Decree

№1137 from November 26, 2011, SAP has rapidly

developed print documents for revised and

corrected VAT invoices, and procedures for their

registration in the system. Newly created VAT

invoices are automatically reflected in the purchase/

sale ledgers and in the journals of received and

issued VAT invoices.

Electronic Documents InterchangeIn 2012, Russia issued a number of resolutions to

allow the exchange of electronic documents. In

2013, SAP released a solution for the exchange of

electronic invoices via EDI, and then also provided

a solution for the exchange of source documents,

electronic delivery notes (TORG-12), and acts of the

works performed.

SAP provides a journal of electronic documents,

which can be signed with an electronic signature,

sent via EDI, viewed in PDF, or amended with other

attachments in one click. It is then possible to easily

track statuses – for example, you can determine

whether the buyer received the documents

submitted, conclude whether the sender has

received notice of delivery, and handle requests for

clarification, if any, came from the buyer.

When the buyer gets TORG-12 he can confirm

receipt of the document or he can file an act of

discrepancies (TORG-2). SAP works with multiple

EDI systems. The necessary operator is defined by

the client’s settings.

Goods in TransitTo address goods in transit through Russia, SAP

has developed a specific set of functions, which

includes: VAT posting for goods in transit, possibility

to print VAT-invoices without invoice posting,

automatically created records in sales ledger, goods

issue posting to 45 account after dispatch from

the warehouse, and discrepancy registration after

customer has confirmed the delivery’s arrival.

Foreign Trade OperationsAccording to the Russian legislation and accounting

requirements, SAP has developed solutions for

conducting foreign trade operations in Russia,

including:

• Import and export deal passports maintenance

with followed tracking of expiry dates and

amount of deal

• Import custom declarations maintenance

13

Issue 13 • May 2015 • Russia Briefing

• Temporary and final export custom declarations

maintenance

• Recording of customs declaration numbers for all

imported goods then printing relevant customs

declaration number and country of origin on the

outgoing VAT-invoice.

• Tracking of imported goods custom declaration

number for movements within the company and

intercompany transfers

• Customs fees and duties calculation and posting

• VAT for import custom declaration calculation

and posting

• Import custom declaration number reflection in

the purchasing ledger

• Possibility to import custom declarations from

external systems

• Storage of scanned documents

• VAT accounting for unconfirmed export

• Separate VAT accounting for export

• Secondary events processing

• Custom declaration report with opportunity to

post and track statuses

The latest release SAP EHP7 provides an opportunity

to form the system certificate of currency operations

and certificate of supporting documents, transmit

them electronically to the bank, and track

information provided to the bank. The new report

on foreign exchange control represents real-time

data in the system on shipments and payments,

data transferred to the bank, balances for shipment

and payment, balance before the end of the deal

passport until the date of settlement.RUSSIA BRIEFING

14

Russia Briefing • Issue 13 • May 2015

VATBy Yuriy Zarya, IT Project Manager and Thomas Titsch, Director ERP

SCHNEIDER GROUP

VAT and Profit tax return in SAPRussian legislation obligates companies to provide the VAT return in a specific format. As it undergoes frequent changes, it adds a lot of complexity to statutory filing in Russia. SAP provides its clients with preconfigured solutions for clear VAT reporting that fully comply to Russian tax and legal requirements.

As of April 2015, the VAT return should include information on all incoming and outgoing VAT invoices. In addition, the authorities will accept only VAT returns provided in the mandatory electronic format. In early 2015, SAP provided a new necessary update of its ERP system (these updates are called “notes”) that covers these latest changes to the VAT declaration form and ensures the capability to

deliver the VAT return in the XML format as required by the Russian Federal Tax Service (FNS).

For profit tax reporting, there are actually two options. Which option a company should choose depends on the size and complexity of the business (e.g. on the quantity of fixed assets and assets under construction). For full automation, SAP provides a template solution based on the Special Purpose Ledger functionality (FI-SL). In newer systems, the new-GL functionality can be used as well. However, this solution requires some effort to implement. If your business is not as complex, it may be a better business decision to obtain the data from your accounting numbers in SAP and prepare the actual tax return in Excel. As an example, for one of our clients (import and wholesale), our accountants spent on average 2–4 hours per month. Implementing the fully automated solution would pay off only after a significant time. VAT in 1CAll 1C standard solutions are 100 percent compatible with all VAT requirements.

All VAT related calculations and transactions are fulfilled automatically from primary documents and operations that are filled-out by users in the data base.

1C provides automatic generation of all necessary reports and forms required by the Tax Code and other normative documents:

• Purchase ledger• Sales ledger• VAT declaration

RUSSIA BRIEFING

Purchasing Invoices Sales Invoices

Incoming VAT Invoice Outgoing VAT invoice

Advance Payments

Purchase Ledger Sales Ledger

VAT Declaration

15

Issue 13 • May 2015 • Russia Briefing

B2B EDI (1C & SAP)By Anna Gorbunova, Deputy Finance Director and Sergey Mikheyev, Project Manager B2B EDI

SCHNEIDER GROUP

One aspect of Russian accountancy is the necessity of documents like the Act, Nakladnaya and Schet-Factura, which require hours of printing, manual stamping and signing, mailing, and storing. The Federal Law of the Ministry of Finance, FZ-402 caused a real ‘revolution’ in Russian accounting. One of its most important solutions was the introduction of the Electronic Document Interchange (EDI). Now it is possible and legally valid to create, send, confirm, and archive accounting documents electronically. Moreover, Tax Authorities accept electronic submission of documents to them during tax audits.

EDI significantly simplifies document flow between two companies and saves hours of work. This puts an end to piles of paperwork and improves document interchange transparency. There is reduced time spent on processing documents, quicker access to archived documents, automated control and processing, and guaranteed document delivery. And, as a result, there is decreased expense for invoice processing. The transparency of financial and contract work also increases as the document flow becomes more controllable and e-copies can be easily retrieved and traced. The electronic invoice process eliminates a number of tasks and thus gives the accountant an opportunity to focus more on customer service and relationships. Environmental impact of the EDI introduction is also quite significant, leading to less waste – in paper, ink, energy, etc.

In order to implement this new process, an externally certified operator is required. The clients’ and suppliers’ ERP systems are not directly connected to each other, but through an external certified operator. Several certified operator companies on the market are offering this service.Using a certificate from the Certification Authority,

the seller creates and electronically signs a document which is sent to the certified operator. The certified operator checks the certificate, sends the confirmation to the seller, and forwards the document to the buyer. Once received, the buyer will then sign using his certificate and send the confirmation back to the certified operator who will forward it to the seller. The electronic document can be saved directly in the archive of both companies. The certified operator additionally saves the sent and the received confirmations.

1CThere exist several EDI solutions which could be integrated with 1C. This could be default or external integration. For example, it is possible to sign and send the documents directly from 1C or to open them in a special interface connected to 1C, sign and send them from this interface. Moreover, documents can be uploaded to 1C which will automatically define customized mapping expense accounts and material master data. When the company receives a request from the State Authorities, the accountant will take electronic documents from 1C or from a special interface, depending on the solution, and send the documents to the tax authorities using the same interface. The most advanced operators have already implemented this interaction, others are currently working on implementing this.

SAPIt is also possible to build an EDI solution with SAP. Although some improvement is needed, signing and exchanging electronic documents could be realized with the help of special connectors and tools. As a result, the paper flow could be eliminated and accordance with RAS (Russian Accounting Standards) and legal authority’s requirements could

be achieved.RUSSIA BRIEFING