Quinnox builds consolidated financial reporting system to improve post-merger business intelligence

Client overview

Client is a private Swiss company in the fragrance and flavour business. It is the largest privately-owned company in the field and comes under top 3 worldwide.

Business need

Client had two separate legal entities for its operations in India, which mandated separate accounts with separate banks for transactions related to their collections and payments. The client had to maintain two sets of audit books and go through tedious and time consuming audit exercises with multiple authorities. Our client also had to perform separate tax calculation activities for each entity and reports such as financial statements, trial balances etc. had to be sent to multiple authorities. Hence, the client decided to merge the company codes to have a centralized collection and payment process through a single bank.

Solution

Quinnox set up an Information Service (IS) team that consisted of domain and technology experts (Finance, O2C and ABAP) for this Merger Implementation Project. Quinnox did a passive merger of both the entities using our proprietary processes, and created a Financials 360 that provides the management consolidated financial reports with a 360 –degree view of the company health. The entities were merged into one with a new Company Identification Number (CIN) generated for the merged entity. Quinnox team did a detailed analysis across people, operations, systems and technologies of the as-is process and conducted multiple requirement gathering sessions with the business stakeholders to understand the requirements for the to-be process to be implemented for the merger. Since the client was using SAP as their CRM, major changes were to be configured within SAP to merge both the entities and developed financial reports with consolidated financial details (Consolidated Trial Balance, Consolidated financial statements, stock transfer report), and made changes in the various forms and the Data Medium Exchange formats (files sent to the bank for remitting payments).

Benefits

• Improved business operations with better control on operations.
• Faster intelligence because of consolidated financial reports.
• Effective control of finances with the implementation of a centralized collection and payment mechanism with a single bank 360-degree view of the company financials for the customer’s senior management.
• Reduction in operational costs owing to:
  1. Reduced fees and costs relating to redundant minimum taxes.
  2. Reduced number of resources to handle the operations for both entities.
  3. Reduction in bank account service fees, transaction charges.
  4. Reduced capital costs associated with minimum deposit requirements and cash forecasting.
  5. Reduction in fees and costs relating to statutory audit.
• Tax Calculation on Profit earned for any given Financial Year for Merged Affiliates will result in a net Tax Saving of 38.66% USD per year.