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«KuatAmlonMunay» oil producing company reaches a new level of business management with «1C:Enterprise 8»

Date of publication: 25.05.2010

 

«1C-Rating» company completed the implementation of comprehensive information system for management at the «KuatAmlonMunay» LLP. This company is one of the oil producing leaders of Western Kazakhstan. Information system on the base of «1C:Manufacturing Enterprise Management for Kazakhstan» and «1C:Consolidation» business applications allowed to improve the efficiency of budgetary control while reducing expenses, to reduce considerably payments harmonization terms. The results are transparency and orderliness of business processes.

 

 

«KuatAmlonMunay» LLP is one of the oil producing leaders of Western Kazakhstan and continues to develop dynamically. The company specializes in the exploration, production and transportation of oil (exports abroad) and is a supplier to the oil refineries in Kazakhstan. Previously used own-designed accounting and inventory applications ceased to satisfy the needs of businesses in their functionality. Due to the company development, it became necessary to automate procedures of document approval and acceleration of design and control of planning documents for procurement of goods, inventory and services.

In order to improve the efficiency of company management, «KuatAmlonMunay» LLP set a goal to upgrade the system of financial management, managerial and regulated accounting. The implementation of modern enterprise information system was

necessary. The new system was supposed to ensure a reduction in accounts receivable and unreasonable financial expenses, existed at the company, and should promote the optimization of inventory levels.

 

In this regard, the new system implementation concept was developed, with the following automation tasks:

  • Optimization of time expenses for paper work by reducing the approval time.
  • Online tracking "day-to-day" of all document circulation including geographically remote oil fields owned by the company.
  • Obtaining of operational information at the decision point. For example, at the time of signing the applications for materials it is necessary to have information about the real balance, the cost of the latest purchases, balance on the budget by a certain code expenses, etc.
  • Eliminating of duplication of functions between operational and accounting services. Transfer of data input functions to into the place of its origin - warehousing, production and supply departments, etc.
  • Completely automated budget control (in accordance with the approved enterprise procedures).
  • The establishment of order in the such areas as debt management, payment planning and inventory management.
  • The subsystems partial translation to the English language for the international company management members.

«1C-Rating» company proved to be a reliable partner in the development of complex corporate systems with maximum coverage of work places and was outsourced as business partner for the conducted tasks solving.

The "1C-Rating" specialists proposed the system based on two interrelated "1C: Enterprise 8" business applications:

  • «1C:Manufacturing Enterprise Management for Kazakhstan» for production, regulated and managerial accounting as well as the automation of treasury management;
  • «1C:Consolidation» for the development of companies group budget model with mandatory translation of multiple budgets performance indicators to «Manufacturing Enterprise Management for Kazakhstan»

 

Additional subsystems "Operational procurement planning" (connected with the "Treasury" subsystem through the procurement planning mechanisms of budgetary control, implemented to the documents) and "Documents approval subsystem" were developed. As a result, the time of document approval was shorten to a few tens of minutes, considering distributed databases as well as complex routes of harmonization with dozens of nodes and transitions.

«1C:Enterprise 8» platform Features allowed to operatively implement the complex model of budgeting, the budgeting process, and limits control. Standard functional of «1C:Consolidation» was complemented by advanced control circuitry implementation of the various kinds of budget (operating costs, CAPEX, cash-flow). As a result, management received a comprehensive budgeting model that takes into account the closed cycle of enterprise management, including:

  • Development of budgets in «1C:Consolidation»
  • Operational planning in «1C:Manufacturing Enterprise Management for Kazakhstan»

·         Formation of internal orders, orders to suppliers and requests for funds consumption taking into account the control by budget line items. Any planned procurements, costs and payments are carefully monitored. This enables to avoid not planned budget exceeding at the initial stage;

·         Formation of budget change requests for required items in an emergency.

  • Accounting of economic activities results in «1C:Manufacturing Enterprise Management for Kazakhstan»
  • Obtaining actual data, plan-fact analysis and plans adjustment for the next period in «1C:Consolidation»

 

 Important task for the company was the transfer of data input points to the places of its origin. One of the constraining factors was the lack of information for the decision-maker on the spot. Standard functionality of orders, warehouse documents and documents for expenses recognition was supplemented by budgetary control mechanisms. As a result, trained warehouse workers, supervisors and material administrators of oil deposits have the ability to enter information "day-to-day". Previously all the data was entered with the paper reportings of every 15-days-shift.

The company has a large fleet of service and specialized machinery. Additional subsystem was developed for accounting of transport requests, trip tickets and costs of fuel and equipment repairing. This subsystem allowed to take appropriate costs under control.

 

The enterprise’s financial management was the main customer. The important implementation results were:

  • ordering of all settlements with contractors, history maintenance of any contract options, considering additional agreements;
  • conducting of complex multi-stage delivery schedules and calculations, with tracking the level of completion;
  • planning of requests for funds consumption on the basis of payment schedules and information about the current status of settlements with suppliers, considering constraints on budgets.

As a result, the customer clearly controls the requests for consumption of funds for compliance with payment schedules of the contracts. History of all contractual relationships is maintained.

Translation of system blocks required for the English-speaking management was performed in cooperation with the customer staff. User-friendly interface in English was developed to allow the performance of management tasks, reports generation, and engaging in the documents approval.

The company is a joint enterprise, which imposes certain requirements for accounting and provided management reporting.

The functional and main currency is US dollars. Any transactions in the accounting should be reflected at the functional currency historical rate. Counterparts of certain part of regulatory reporting, currency regulation forms and budgets with plan-fact analysis are formed in the US currency. Subsystem for accounting in the functional currency was developed in order to form a clear picture of all the assets and liabilities in the regulated (KZT) and major (dollar) currencies. This subsystem supports the strategies for rate calculating of exchange account balances, autoenrollment of new accounting correspondences, the possibility to overestimate of leaving intact the historical course of a section of accounting. Developed subsystem was approved by leading auditors form the "big four" companies which supervise the "KuatAmlonMunay."

The company, in addition to production and sales, transmits the production to refineries. The capabilities of production management subsystem were used for calculation of refiners services cost and the production cost calculating.

 

Presently the system is in product operation with 91 automated work places.

During the project, the existing enterprise budgeting model undergone some changes. Scope of «1C:Consolidation» use expanded since originally planned. Among the tasks for the next few months were as follows:

  • To reduce the budgets formation and consolidation time through the use of management budgeting processes.
  • To transfer the majority of analytical work in "1C: Consolidation" using a package of plan-fact reporting.

Alexander Sergunin, financial manager notes (as the project manager of the customer):

«As a result of the implementation of information system on the «1C:Enterprise 8» platform, we received a product adapted to the specifics of company accounting. Due to the greater functionality, the business processes were completely automated, which could be automated only partially in the previous system. We received completely automated budget control and electronic document turnover». 

 


«KuatAmlonMunay» LLP is one of the oil producing leaders of Western Kazakhstan and continues to develop dynamically.

 

 

Address: 106 Amangeldy street, Kyzylorda, Kyzylorda region, Republic of Kazakhstan, 120008

Tel: +7 (7242) 23-71-80

Fax: +7 (7242) 23 76 21 

Email: kuatamlonmunai@kuatamlonmunai.kz


 




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