German consulting for Russian businesses

Ulf, as far as we know, before you decided to start your own business and set up a consulting company SCHNEIDER GROUP, you had worked in Russia for several years as an employee. Why then, more than 20 years ago, did you choose Russia to build your career?
Once in my childhood, my dad and I were in Poland, thus I turned up on the border with the Soviet Union. My dad told me that there was no way further because of the Iron Curtain. Like for any boy, it was difficult for me to put up with the impossibility, the prohibition. It’s like the saying – “forbidden fruit is sweet” – it always becomes especially interesting and desirable. Since then, I had a strong wish to move to Russia. During my student years, the desire became so strong that I decided to study Russian. It became my hobby.

Already an adult, while working for Procter & Gamble in Germany, I often communicated with the Moscow subdivision. As I accumulated information, Russia became more and more interesting in terms of career and prospects. Once I realized that I was ready to go to work in Russia to check on my own experience everything that I had previously read and heard from colleagues. Back then the plans were to work for 2 years and return. So I have been living and working in Russia for 20 years.

How did you come to start your own business? Why consulting? Why did Russia become the first country in which you set up your business?
I dreamed about my own business for a long time. It has been well said that dreams should come true, although not without effort, of course. Before starting a business, I had worked for five years as CFO at the German company Allianz.

In 2003, I paid attention to the fact that more and more Western companies began to open their representative offices in Russia. I realized that they needed help, since tax and accounting legislation in Russia is complicated. As this is my specialty, I saw an opportunity to help them in the field of accounting and taxation so that they could focus on their core business. So I set up a consulting company that took over all the auxiliary, administrative work.

Please tell us about how it all began. What difficulties did you face and what helped you overcome them?
Before setting up my own company, I shared the idea with my Moscow friends to start a business. They replied that it would take a million dollars to invest in the idea to make it work. Back then I was not thinking about the investments, only about the fact that I wanted to earn a million dollars myself, and did not stop.

The first difficulty I faced in Russia was bureaucracy. Fortunately, in terms of bureaucracy, I turned out to be an experienced businessman, since Germany also has it.

Since we were doing accounting for clients, I often had to communicate with the tax authorities. Here I confronted the second difficulty. In 2003-2004 the tax authorities were highly corrupted, and I had a principle – no corruption.

When the tax officials realized that, we began to work efficiently, and the relationship with the tax authorities became excellent. But, you know, creating such relationships took time.

You position SCHNEIDER GROUP as a partner for foreign companies in the Russian and CIS markets. Does it mean that you work exclusively with foreign companies? Do you have any Russian clients?
Until recently, we were focused exclusively on Western companies, primarily German, Austrian and Swiss. Rarely could we find a Russian company among our clients.

Now we are actively developing relations with Russian companies and are ready to offer them such services as financial management, transformation of financial statements in accordance with IFRS, support for entering the markets of those countries in which we have offices, for example, in Belarus, Ukraine, Kazakhstan, Uzbekistan, Armenia, Poland, Austria and, of course, Germany.

What industries do you work with?
We have a very wide range of clients. I can’t say that we are focusing on any specific industries. There are clients from the automotive sector, fashion industry, construction industry, many trading companies, and also those which are planning to localize in Russia.

What areas of consulting are most in demand from SCHNEIDER GROUP today? And why do you think that is?
At the very beginning, we launched a business line of accounting outsourcing, which is actively and rapidly developing: at first it was only accounting, then accounting management, and now it is financial management and analysis.

This year the interim management service is in noticeable demand; this means that we take on the functions of the general director, finance and administrative director. This is very convenient for clients who need temporary help in running a company. It often happens that a company, for example, has a strong team of sales managers, while the owners outsource all other functions. After that SCHNEIDER GROUP comes to the rescue.

We try not to offer our clients one-time services, but to select a package of services to solve urgent tasks. For example, when a client launches production localization in Russia, he needs not only legal and tax support, but also market analysis, recruiting and others.

Now, especially after self-isolation, many companies are thinking about increasing efficiency through digital business transformation. Do you have any services and solutions that can help your current and potential clients make this transformation?
Having launched a business line for accounting outsourcing, we immediately began to offer our clients IT services. Already in 2004, we started the first projects for the accounting automation. Then we used Russian accounting software “1C”: we modified it to a full-fledged ERP. Currently we are also offering SAP implementation.

Today I can state that SCHNEIDER GROUP has vast experience in automation and implementation of innovative services for solving accounting and financial issues.

Currently we have begun to offer our clients and the market our own development – Client Login online platform for the complete transfer of HR administration to a paperless basis. This platform allows you to create, edit, reconcile employee statements, expense reports, waybills and other HR documents online, and relieves employees from working with paper documents.

In conclusion, we want to ask: Ulf, what was the key factor in the success of your company? And what advice can you give to Western companies, including German ones, which are just going to enter the Russian market or have recently entered it?
I get asked this question very often, although not everyone likes the answer: you need to work very hard, every time to reach new heights and never stop there.

An important point is to pay attention not only to the big picture, but also to the details in your work, then there is a chance not to miss something very important.

When I start a conversation with potential clients about the possible localization of business in Russia, they say that it is difficult, and they would rather spend their resources on developing business in the European Union.

Since SCHNEIDER GROUP team has already helped a large number of clients in localization, I can confidently say that developing a business in Russia is no more difficult than in any EU country.

I can give some examples. If we are talking about German companies, then the chances of successful localization in Russia are high, because the Germans and the Russians are very similar in terms of national characteristics. The Russians also value the quality of German goods very much and willingly buy them.

Clients often say that it is easier to sell goods in France and Italy, since these are the countries of a single customs union, a single market, while in Russia there are difficulties with customs clearance and certification.

Over the past five years, in Russia, these procedures have been greatly simplified and have become similar to those that exist in the European Union.

So do not be afraid to do business in Russia and never stop in your achievements.