Customer Details

Customer: RCS Group
Website: http://www.rcs.co.za/home/
Country or Region: South Africa
Industry: Financial Services Industry
Partner: Datasmith 

Company Profile

The RCS Group is an independent,  financial services company that operates  in South Africa, Namibia and Botswana.  Since its inception in 1999, RCS has  provided credit and financial services to  more than one million customers. 

From its humble beginnings, as a  specialist personal loans provider, it has  expanded the available product range  offered to customers to include private  label cards, retail cards, personal loans,  home loans and insurance.  

Moving to a consolidated and efficient accounting systems

The current RCS Group evolved from two independent businesses. The merger resulted in duplication and inefficiencies and led to extensive manual intervention.

Business Needs

RCS Group was operating on multiple  financial accounting software systems,  while the Foschini Group used SAP R/3  Financials. The amalgamation of these two  companies resulted in the following  challenges:

1) Inefficiencies due to duplication of  processes and procedures, software  licensing costs and considerable  reconciliations.
2) Extensive manual intervention and  senior management involvement were  required in order to meet reporting  deadlines, timeously.
3) Additional head count was required  with new acquisitions as the current  platforms were not robust and flexible.
4) Significant manual and Excel  intervention required to produce the  necessary reports to facilitate  business decisions and needs analysis.
5) The many customisations of the  platforms created a cumbersome and  inefficient general ledger  infrastructure, with unnecessary risks and people-dependant processes.
6) System enhancements, such as online  procurement, were complicated and  difficult to integrate and implement.

Solution

It was decided to provide a single business  management solution by replacing SAP  R/3 and Pastel with one ERP system to  ensure valid, accurate and complete  financial records, as well as a fully  integrated procurement system. Dynamics  GP and the Information Worker suite of  products were selected for this purpose 

This meant re-engineering all of the accounting processes and procedures.  Data conversion and migration were also  required for the historic financial  information. 

At the same time, various aspects were  taken into consideration and ownership of  financial results and commitments were

transferred to the various cost centres, verbal communication and misunderstanding of the processes were ironed out and the amount of manual work, which led to duplication, was reduced. Another reduction was in the printing and paper costs which had previously been considerable.

The new system allowed creditor statement import for reconciliation, master record management, with respect to group creditors, including the management of the trading name, multiple addresses, contact details, VAT number, BBBEE score, public benefit organisations’ number, payment terms and settlement discount rates. The approval process of vendor reconciliation was also streamlined. 

The maintenance of creditor bank details  can now be better managed through  segregating the capture and approval of  changes to banking details and specific  rights are required to perform these  changes.

The procurement budget has been  decentralised and, when a supplier has been  used more than three times and the  business owners have not completed a new  vendor application, no funds will be disbursed until an executive has authorized such an invoice.

An exception report is required for  immediate rejections of payments to  creditors. These include an incorrect bank  account number of the beneficiary, closed  bank accounts, etc. The matching rejections must be authorized by a supervisor.

There is now improved reporting and  reconciliation of creditors, bank accounts  and general ledger accounts. Treasury  reporting, a VAT leakage report and  foreign exchange gains and losses  (including foreign currency translation  reserve) are automatically calculated in  terms of IFRS.

The system is able to store and report  against budget capital expenditure, by cost  centre and asset category, and a consistent  hierarchy of General Ledger accounts is  available across all the companies,  enabling financial reporting on the  different company groups. Maintaining  this integrity across group companies is  critical. Centralised and controlled  maintenance is required, preventing the  creation of new GL accounts and vendors  in the entity hierarchy, unless they exist in  the master plan. Various other approval  processes have been introduced.

Benefits

The new system is secure and offers RCS Group IT compliance. The robust security and applied segregation of duties is important in managing the budget, expense authorisation, beneficiary banking details and creditor payments.

An established internal process, assigning responsibility to specific staff members, is now in place which means that access to information is through system controls and is easily managed.

With procurement, for instance, the automated processes ensure that the approximately 3 000 creditors’ invoices are processed across the group, monthly. The same applies to the company’s 300 trade creditors. 

With the transfer of ownership for financial results and commitments to individual business units, the company is able to deliver accurate, complete and relevant financial information in a timely manner. This makes for better decision-making and enhances the RCS Group franchise value. Added to which administrative tasks have been simplified by keeping all financial records and reporting consolidated in one central system and location. Financial reporting, a checklist of the month-end finance calendar and bank statement processing are also simplified.