Mid-market firms crossing US borders and opening branches overseas are often underestimating the need to do homework in localized ERP selection and architecture design.
Unfortunately we often see the approach when IT director simply calls controller in Sao Paulo subsidiary and tells him something like this: ‘We need accounting for your office. Please make research and call local consulting firms.’ There is no doubt that consultants will show up but they will likely do implementation from scratches where such features as GL Chart of Accounts, Customers and Vendors numbering will be out of synch with what you have in the Headquarters. Now if you suggest the same to the controllers in China, Russia and other countries then how do you expect to produce consolidated P&L and Balance Sheet? How do you expect to do internal audit? Let’s begin with recommendations and then review several case studies:
1. Template Company. Of course it is recommended to have the same system implemented in all offices across the globe but it is not all to worry about. It is recommended to start with template General Ledger Chart of Accounts as this is the key to consolidated financial reporting. Also ERP part might deploy custom fields and tables participating in unique for your organization business logic. These are just two points for template creation. This methodology should be communicated to all the domestic and international offices and IT personnel
2. But why Business One? This is good question as everything should be questioned and analyzed in the sense of alternatives. Here in the United States we are enjoying the competition between accounting software vendors. It is good idea to mention such names as Microsoft Dynamics, Sage, Oracle, NetSuite and SAP. If your business processes are standard and generic then you can pick either one. But when you are crossing national borders you suddenly learn that Dynamics GP is not localized in Brazil, Russia and China and other surprises like this one. On the other hand Business One was designed to be available in major world languages and be localized in major countries and regions
3. Hosting Question. Our recommendation is to host all the companies on central server in US and open client interface to foreign users via Citrix or competing technologies. Important part of IT strategy is control over the data and procedures, including backup plans, consolidated Profit and Loss Statement, GL consolidation just to open the list. Managerial reporting is often done in Crystal and if you have all the databases on the same server then the advantage is obvious
4. Strategic Consulting Partner. This organization preferably should be located here in the USA. But these people should be connected to satellite offices in the foreign countries where you are planning to open locations. The key questions are creating template Chart of Accounts and procedures and implementation the software in the central office. Let’s now come to the recommendations in the specific country or region
5. Brazil. Here we have SPED (Public Digital Bookkeeping System) with its fixed Chart of Accounts and requirements to file AR, AP, Payroll, GL and other tax related documents electronically via internet. Taxation is pretty complicated as rates and formulas depend on the industry code, company size, product classification, ship from and to sites and other parameters. There is SPED add-on as well as taxing issue is successfully resolved in SB1. There is strong competition from the locally programmed product Microsiga so if you like feel free to see its demo. We also published numerous papers in Portuguese to cover the topic
6. Russian Federation. Very strong competition from 1C Accounting as reporting is based on government approved chart of accounts with strong emphasis on manufacturing operations. It might be a problem to print Balance report required for quarterly and annual reporting to tax agency. However SAP BO is transparent to your central office while 1C is not. If you are multinational corporation this argument is apparent. We see strong trend where American and European firms are opening their Warehouse along Novorozhskoye highway and in Siberia, especially in timber and mining industries. Please see our publications in Russian on the same topic
7. China. Here the first question in our opinion is ‘does the software support Unicode meaning Chinese hieroglyphs?’ If the answer is ‘no’ then it is probably a show stopper. Such products as Microsoft Office Word, Excel, Power Point and Access are Unicode compliant but it doesn’t mean that such ERP products as Dynamics GP is also compatible. There are some add-ons for example NJ Star to open GP for Chinese users but they are restricted and they do not provide Tax code compliance
Let’s take few questions
Q. We are opening location in Rio de Janeiro and we are in food industry. Could B1 cover Portuguese user interface for data entry as well as required industry compliance forms and reports?A. It is recommended to review each case individually but based on the information we believe that you should be covered
Q. Is it possible to program SPED, NCM and related requirements in Dynamics GP Dexterity?A. It might be possible from mathematical logic and assuming that you have unlimited budget. But in our opinion better idea is adopt something that is already localized for this region
Q. In Moscow region our office needs strong ERP which is transparent to our management team in Atlanta. We got a feeling that IRS reporting is not ready yet to report in Moscow. Should we implement B1 and wait or should we go ahead and pick 1S Bukhgalteria?A. Guessing about the future is always complex business. We believe that RF should simplify its IRS quarterly and annual reporting requirements and make its form more GAAP compliant. But we are not a part of legislator team in State Duma. At least we believe that Duma is interested in attracting foreign investments. On the other hand Gazprom and oil exporting revenues are strong enough to force our leaders to place the case on hold and probably use it as a trumpet in future negotiations
Please call us 1-866-304-3265, 1-269-605-4904, help@efaru.com. We have local presence in Chicagoland, Southern California, Atlanta Georgia, South West Michigan, Houston and Dallas areas of Texas. We serve customers USA and Canada nationwide and internationally via web sessions and phone conferences (Skype is welcomed). We are working on Brazilian ERP consulting market in Sao Paulo since 2004
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