Accounting outsourcing in Russia
Advantages of outsourcing Russian Accounting and Bookkeeping
SCHNEIDER GROUP offers you the possibility to outsource all of your accounting in Russia. Especially for smaller and medium-sized enterprises, accounting outsourcing will lead to higher cost efficiency and will enable you to focus on your core business in Russia. Accounting outsourcing includes daily bookings and preparation of documents and reports for the Russian tax and social authorities.
High complexity of Russian accountancy and finance
A challenge in finance in Russia is that Russian accounting and reporting is highly formalistic and bureaucratic. Tax regulations are also much more influential in Russian bookkeeping and finance systems than in Western ones. Combined with the obligation to file complete reports quarterly, the effort that needs to be put into accounting in Russia is much higher than in Western countries.
Our services concerning Russian accounting outsourcing and tax reporting:
- Conducting all daily bookings
- Accounting of fixed assets
- Salary accounting
- Quarterly reports to Russian tax authorities, including preparation of all relevant closings and reports to social funds
- Calculation and reporting of all types of taxes
- Preparation of all bookkeeping documents for monetary transactions
- Filing of bank reports
- Consulting on Russian finance, daily accounting and taxation matters
- Preparation of all HR documents demanded by Russian law
Payroll accounting outsourcing in Russia
Appraisal of Russian payroll accounting and salary in Russia
Payroll accounting in Russia is an integral part of the accounting and tax system. Russian payroll accounting outsourcing includes generating various extensive documents about salary and personnel administration, such as monthly overviews of working hours and diverse internal adjustments.
Payroll accounting outsourcing in Russia – complexity and opacity
Even in standard cases, the complexity of the Russian payroll accounting astonishes most Western investors. For example, when taking vacation, an employee does not receive his/her regular salary, but the average salary of the previous 12 months. While the regular salary in Russia is reduced by missed working days, the salary during vacation is based on calendar days, which leads to even more complex and opaque calculations in the Russian payroll accounting.
Our services for payroll accounting outsourcing and salaries in Russia
- Calculation of payroll, twice a month (according to Russian law)
- Calculation and declaration of contribution to social funds
- Calculation and declaration of withhold personal income tax for each employee, residents and non-residents
- Calculations of payroll taxes and social taxes for preparation of payment orders (monthly)
- Calculations of payments for sick-leave
- Calculations of payments for vacations
- Monthly calculation of unused vacation reserve
- Data on personal income (2NDFL), personalised pension fund report Preparation of pay slips with details about salary calculation
- Monthly preparation of overview of bookings related to payroll accounting
- Management reports on payroll accounting tailored to your needs
- Preparation of all salary / tax / pension payment orders
- Annual overview of vacation of all employees
- Annual preparation of the list of staff members, changes in the list of staff
5 reasons to do payroll with SCHNEIDER GROUP
- We apply the 4-eye principle
- We do not only process payroll but advise on related tax and compliance matters
- We build efficient and clear payroll and HR business processes
- We optimize via automation of routine operations and data exchange (e.g. electronic payslips)
- We work with almost all common ERP systems
We are a proven partner of many global payroll providers.
Reporting and taxation in Russia
Taxation and Reporting System in Russia
Reporting in Russia, as well as taxation, is very complex because Russian accounting is not predominantly influenced by commercial law, but by tax regulations. Russian accounting is thus extremely formalistic, and the legal requirement for a quarterly reporting system, including the balance sheets and profit and loss statements, leads to an enormous amount of work. About 15 documents must be filed each quarter for reporting in Russia.
Our accounting services help you to prepare all necessary reports as required by the tax and reporting system in Russia. Apart from compiling reports for Russian authorities in Russian, we can also prepare summaries for you in German and English.
US GAAP and IFRS in Russia
Differences between Russian accounting & IFRS / US GAAP
In Russia, accounting standards are dominated by tax regulations rather than commercial standards. The focus is on ensuring accurate tax calculations rather than having useful data that shows the full economic picture of the company. Furthermore, the rigid tax regulations exclude many transactions either due to non-deductibility, insufficient documentation standards, or for other reasons which will, in contrast to IFRS and US GAAP standards, not show up in the accounting. Thus the full economic view of the company will be distorted.
The most important differences at a glance
Russia is making a consistent effort to migrate towards IFRS, but this will take many years. Currently, the most significant differences are:
- IFRS / US GAAP focus on substance over form
- IFRS and US GAAP show most assets at fair or present value
- Under Russian GAAP, only those transactions which actually occurred and which are supported with signed documents can be recorded in the accounting system
- IFRS and US GAAP treat revenues generated from long-term contracts differently
- Russian GAAP has significantly different rules for accruals and depreciation than IFRS
- Russian tax accounting allows changes to prior periods which create reconciliation issues in IFRS
- IFRS and US GAAP provide more opportunities to capture revenue and expense that is omitted in local GAAP
Types of IFRS financial statements we provide:
- Preparation of full scope IFRS and US GAAP financial statements, including Balance Sheet, Profit and Loss Statement, Statement of Changes in Equity, Cash Flow, and Notes
- Preparation of limited scope, pro-forma financial statements under IFRS or US GAAP
- Preparation of management reports under IFRS and US GAAP
Transformation from Russian standards to IFRS / US GAAP
To better understand and use your Russian accounting data, it should be converted or transformed to Western accounting standards. Our financial experts are knowledgeable and have the right certifications to complete transformations to IFRS, US GAAP, or to your specific corporate reporting standards. We provide several different options for this service.
We work closely with our business partner, ITAN, a company that implements leading software solutions for international financial and management accounting.
Management Reporting in Russia
Management Reporting in Russia
As Russian accounting regulations are very formalistic and consequently have very little economic significance, it is often recommended to prepare additional reports based on Western accounting standards. Cost centers and cost unit calculations are unknown in Russian accounting. Even cost categories are not represented in the standard profit and loss statements.
As experts in the field of financial analysis, we will generate various types of management reports for you:
- Management reports according to your requirements. We can adapt standards already in use in other countries to Russian accounting.
- Simple Aggregate Amount and Account Balance in German or English, supplemented with comments on balances.
- Reports with cost centers.
- Short summaries in German or English about the numbers, resulting from reports for the Russian authorities.
Timing is often a crucial point. While Russian authorities don’t know about Fast Closing (very quick closing, using some estimations), we are aware of your need to receive a report shortly after the end of the reporting period.
B2B EDI in Russia
Electronic document flow reduces the time for document processing and provides quick access to archived documents, as well as automated control, processing, and guaranteed delivery of documents. As a result, the cost of invoice processing is reduced and the transparency of financial and contractual work is increased, as document flow becomes more manageable and electronic copies are easier and faster to receive and control. This helps reduce the operational and financial risks associated with processing and storing paper documents. Various studies show that the introduction of electronic invoices saves up to 70% in both time and money compared to paper documents. For more information, click here.