About VMG Group
VMG Group – global investment company uniting 20 companies, such as UAB “VMGcorp”, AB “KLAIPĖDOS MEDIENA”, UAB “SAKUONA”, UAB “Eurovesta”, VMG “Technics”, UAB “VMG Akmenės baldai” and others.
Company employs more than 3 000 employees. Company invests in wood processing and manufacture of sustainable wood products, renewable energy park, innovation, and technology industry development, engineered wood structures for construction and infrastructure, industrial real estate management in the Baltic States, Poland, and other European Union countries. Production is exported in more than 40 countries worldwide.
Project goals
- To adopt ATEA Baltic currently used ERP for accounting lease agreements as requested in IFRS 16.
- To build flexible solution, which will be used not only in ATEA Baltic, but also in ATEA Nordic countries. This way ensuring common approach and solution usage in all companies of ATEA Group.
- To have ready to use solution before officially requested starting day (1st January 2019), thus leaving enough time for transitional period activities.
Why OIXIO?
- Project had distinguished goals and very clear objectives. Previously – single report could take up to 5 workdays to complete. Reporting was lacking speed and compliance. Reporting involved aggregating data from multiple excel files. These files and final data set, usually, had mismatches and involved human errors in data entree. Tasks were time consuming and stramineous for employees. Chief accountant had experience with IFRS16 solutions and have chosen OIXIO as vendor to solve inefficiencies and ambiguities in reporting.
- At the beginning of the project an ambitious timeline was set. OIXIO had to adapt to changing circumstances and scope creep, which is expected to happen when working under ambitious timelines and seeking ambitious goals. Project start was delayed, however OIXIO experts, as soon as start was given, rushed towards finish line. Biggest change was board decision to split one company into two separate entities. This required synergy and seamless communication and collaboration to get project back on track. We are more than happy with dedication we have received.
- As OIXIO team was actively involved in the project we felt constant support. Answers were given here and now, showcasing deep understanding not only of IFRS16 solution. We
ve experienced what it means to be led by experts through the unknown. Results where above what weve expected. - We have learned that leaning on experts is vital for project success. Slight hesitation to ask for assistance led to insignificant delay in the timeline. However as soon as we presented uncertainties and moved towards problem solving – we felt guidance and ability to adapt from the team of professionals. Without prolonged analysis we committed to implement “know-how” of the team and achieved results while saving time and budget.
- Even data migration – process which requires attention to detail and high level of concentration – was completed on time and without mistakes.
Solution description
OIXIO solution – IFRS 16 module, which can be incorporated into ERP of lessee companies to meet IFRS16 requirements.
The main idea of OIXIO IFRS 16 solution is to calculate present value of future lease payments and calculate lease schedules, where contractual monthly payments are split into two parts – present value and interests’ amount. It also includes significant number of features and enhancements that are required by lessees to support lease agreement accounting according to IFRS, starting with its signing, schedule calculation and up to its natural ending or termination.
OIXIO IFRS 16 solution is based on D365 BC and tightly integrated with general ledger, fixed assets and other D365 BC modules.
The core functionality includes:
- Present value calculation using period payment, lease period, interest rate and various other additional parameters.
- Lease schedule calculation (monthly, quarterly, half year, annual).
- RoU Asset Management.
- Contract amendment management.
- Contract ending activities management.
- Lease agreement accounting operations.
- Contracts status flow.
- IFRS16 affect calculation for single and group companies.
Business Benefits and results of the project
It is impossible to measure exact time benefit and calculate data accuracy. However, it is obvious that improvements are significant and well observed by both, CFO and the board. As some calibration and alignment steps are still being carried out, it is clear that during the next year even more time will be saved and processes will be leaned out to ensure transparency and efficiency.
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