Estimating Time and Cost for Expense Reporting in Russia and how to increase efficiency through automatization
The time spend and the cost associated for expense reporting in Russia naturarally flucutate based on the type of expense report submitted, the number of documents, the currencies involved, the number of expenses paid by the person travelling and the number paid by the company, simply said lots of factors.
Though based on the experience made there are some very simple rules and clear indications what increases the cost and time associated with expense reporting in Russia and what decreases it.
Estimation of a standard expense report – time and costs
A standard expense report takes about 20 minutes to process by an accountant. A standard expense report is consisting of about 5 expenses to be booked, is in rubles and maybe has 1-2 of the 5 expenses which are paid by the company. This very rough estimate is based on year long experience working with accountants.
At e.g. a rate of 1500 roubles to 2000 roubles for a second accountant in an outsourcing company in Moscow this is about 500 to 666 roubles per expense report or just below 10 Euros. A substantial amount of money.
What factors increase the time needed for an expense report and lower efficency of expense reporting in Russia
|Number of Documents||The number of documents increases the time effort needed. If though there are very many documents and they are unsorted the time effort migh not go up only in a linear fashion but much higher as in order to understand clearly e.g. a bigger business trip the accountant needs to sort all the documents to bring them to order. With 30 or more documents this becomes a serious job.|
|Currencies||More currencies in an expense report increase the time effort needed as due to the different options to treat the currencies and due to the time needed to look up the currencies.|
|Quality of documents||The worse the quality of documents the more time is needed. This concerns the physical quality - how good can all be read - but also if the documents are compliant with the laws or recquire follow ups, special treatment in the accounting software as they can not be expenses etc.|
|Languages / Translations||The more languages involved the more issues might arise for an accountant not know the languages and not being able to allocate the expense correctly in the cost categories. Sometimes also, following strict accounting rules, translations need to be provided|
|Timeliness of provision of the documents||The later the documents are provided the more work arises as accountants must look up data further in the past, might have an issue with the periods and book the costs into the past quarter etc. And questions on the cost they might ask need more effort by the traveler to give the answer|
|Questions by the accountant||The more questions an accountant has e.g. on missing documents, certain aspects of the documents provided, late submission of certain documents, docouments provided in different set the more time is needed.|
|Questions by the person requesting to be reimbursed||Questions by the person providing an expense report when incuring the expense, when preparing the expense report or when the expenses are paid can substantially increase the time and effort needed.|
All of these factors increase the time needed to process an expense report in Russia. All of these factors result in higher costs and lower efficiencies in the prepartion of an expense report in Russia.
So when a number of these factors are combined in one expense report the time can increase substantially and the quality of the expense report drop substantially.
Based on the experience of many accountants the pure processing time of an expense report can well be up to 1 hour or more if some of these issues arise. What especially costs lots of time and effort is when documents are incorrect or a missing and an active communication with the person submitting the expense report is needed. E.g. especially when the person does not know all the small details of the expense reporting rules in Russia.
And then there are all the indirect costs. They can be substantial and are often not visible to the managment. They arise if expense are filled in the wrong format and can not be used to lower the tax base but are compensated to the employees. Such expenses then cost 20% – the rate of the profit tax in Russia – very simply. So a not deductable hotel expense of 100 Euro cost right away the company 20 Euro in higher taxes. A hidden cost of expense reporting.
Increasing the efficiency and automatization of expense reporting in Russia using Avansovka
Russian regulations on expense reporting exist and e.g. that original documents must be submitted can not be changed. But there is much that can be done to optimize and make the expense reporting more efficient in Russia.
Avansovka is build around the concept how to make expense reporting more efficient in Russia in respecting all the relevant rules and regulations. Avansovka is being developed by Accounting and IT specialist in Russia knowing where the issues are and in that sense is fundamentally different than other global expense reporting software which are not tied to the Russian legislation and needs. The expense reporting platform Avansovka is especially developed for Russia and the needs or Russian accounting and expense reporting legislation. The SaaS platform is working in Russian and tied to Russian laws and regulations and thus is ideal to increase the effiency in expense reporting in Russia.