Financial management and project control
We arranged outsourced accounting services for the customer and prepared tax forecasts, a monthly profit and loss management statement covering all of the company's projects, a cash flow budget for a specific project, and more.
A European alternative energy provider was working in Russia under an engineering, procurement and construction (EPC) contract, The company was dealing with large budgets that needed to be monitored on an ongoing basis and adjusted as necessary during the project, such as when equipment, logistics or certification costs changed. Furthermore, revenues from the company's Russian activities were earned in foreign currencies but paid in roubles. Currency rate discrepancies could affect profitability if they became too significant. Because of the size of the project and the high volume of bank account activity throughout the project, effective cash flow management was required.
The customer needed well-organised financial management and project control, including the reduction of potential losses caused by exchange rate differences. The Russian legal entity, however, consisted only of working personnel who were not in a position to produce these financial reports for their headquarters.
SCHNEIDER GROUP offered the customer a holistic financial management solution, including:
- Project control,
- Cash management (weekly cash flow)
- Foreign exchange risk hedging.
In addition, we arranged outsourced accounting services for the company.
Our finance team gathered all project-related data and included it in the project's profit and loss budget, as well as a cash flow budget for specific periods. We also created tax projections for the company, including VAT, income tax and other types of taxes. Everything was timed to coincide with the construction projects' milestones.
We also prepared a monthly management income statement for the company's projects as a whole, including real-time financial highlights of the projects, as part of accounting procedures. Financial management, payment and deposit planning, optimal cash allocation and weekly cash flow reporting were all accomplished by our experts.
To regulate and mitigate currency risks, we proposed a method of natural hedging through conversion, with the goal of maintaining the projects’ intended financial results. We also handled receivables and payables to ensure timely payments and paperwork collection for accurate tax outcomes. Finally, we established a supply contract monitoring feature to organise project data.
SCHNEIDER GROUP’s assistance with financial management benefited the customer's operations and local initiatives while allowing them to focus entirely on accomplishing the construction project.
Financial data, progress reports and routine updates on the project's financial health were sent as needed, enabling future decision-making and allowing the head office to respond to ongoing updates quickly. All business processes can now be planned and their financial results established thanks to thorough professional planning, financial guidance and estimates for VAT, income tax and other statutory payments. The head office was able to meet its financial targets thanks to well-tuned cash management and hedging.