Increased efficiency through the implementation of IFRS accounting and profit centre accounting
Together with our partner FAS, Tesat’s aim was to standardise processes and reduce complexity in finance and accounting. This also included streamlining administrative procedures (lean management). The goal was to increase the added value in the finance department and to be able to manage the company more effectively and efficiently in future. This included implementing parallel accounting in accordance with IFRS standards in SAP ERP.
About "Tesat Spacecom"
Tesat-Spacecom, with head office in Backnang, Swabia, is Europe’s largest equipment supplier in the field of satellite communications with around 1,250 employees. Tesat-Spacecom has been an independent subsidiary of today’s Airbus Group since 2001.
Why Tesat needed the introduction of parallel accounting according to the IRFS standard
Despite being part of the international and capital market based Airbus Group with ongoing internal and external reporting requirements in accordance with International Financial Reporting Standards (IFRS), Tesat continued to prepare its accounts in accordance with German commercial law (HGB), as is customary for many medium-sized German companies, and reconciled them manually to IFRS on a monthly basis for group reporting purposes. This parallel accounting according to HGB, IFRS and tax (balance sheet) was implemented in the SAP system years ago using the company code method. This coexistence of different valuation approaches without a consistent changeover of the system was extremely inefficient.
The project started with the design and implementation of the SAP New General Ledger for parallel valuation and accounting. The dominant valuation was changed from HGB to IFRS. Other SAP standard functions (e.g. profit centre accounting and cost of sales accounting) were also set up.
The next step was to adapt the controlling approach:
- Extended use of the SAP Project System (PS) module
- Development of standard project structures
- Parallel determination of results in accordance IFRS and HGB at the end of the month with automatic posting to the financial accounting ledgers.
- Automatic calculation and posting of provisions for contingent losses and unrealised costs enabled.
- Time recording for projects using CATS (Cross Application Time Sheet)
- Recording and analysis of unrealised costs (Cost of Non-Quality) by extended SAP Standard
An increase in efficiency was achieved through a centralised and standardised BW in the last step
- Convenient project cost planning with BW Integrated Planning (IP)
- Establishment of a standardised project reporting system with the Business Explorer, BEx Analyzer
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The implementation of the new general ledger has laid the foundations, both procedurally and technically, for future increases in efficiency in finance and accounting. Changing the dominant valuation to IFRS will eliminate the need in future to prepare the HGB monthly financial statements under great time pressure before they can be transferred to IFRS for group reporting. There are significantly fewer reconciliation invoices and less manual reconciliation work. This is further reinforced by the ledger method now used, with largely automated gross postings. This has also increased transparency in the finance department.
By activating and customising Profit Center Accounting and Cost of Sales Accounting in SAP, the basis was created to manage the company more efficiently in the future.
Transparent cost tracking for all project phases (from offer to order processing to warranty phase) thanks to standard project structures
The SAP Business Warehouse at Tesat now collages all the relevant project information and, with the BEx Analyzer, allows for convenient and multidimensional reporting with functions such as drill-down and roll-up directly in Microsoft Excel.
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