ERP system functional requirements

MFO Credo LLC uses several systems in its day to day operations. Each system has its own scope and
purpose.

Main systems are:

1. Temenos t24 R10

2. Front office operations (business rule and controls)
3. Finance/Accounting (Current in use Infor SunSystems)
4. HR Point (Onyx Smart package)
5. Other supporting systems

Credo requires implement an ERP system that will provide business support units with effective tools
to manage company, enable effective usage of the assets, provide solid framework for process
automation and controls. Project does not consider change of front office business applications, or
back office banking software.

Requirements for the clients rights management

A system shall enable:

o Determining different roles and functions for different types of consumers;

o Management of limitations for consumers by a company’s authorized person;

Structure of the plan of accounts

Structure of accounts shall be of the following type: the first four digits shall be the number of the plan
of accounts determined by the national bank of Georgia and the following 2 digits shall be sub-accounts
depending on the company’s needs (for the identification of operation type);

Determination of the plan of accounts within the system shall be possible by the user. The system shall
ensure the prevention of duplication of accounts.

The account shall have the following features:

 account number (with above given structure);

 account name (Georgian and English);
 status of the account (active, suspended, cancelled);
 four digits synthetic code of account (summarizing upper level);
 balance code;
 profit and loss code;
 currency;
 liquidity;

There shall be additional analysing codes within the system: a branch code, a staff member, a car,
budget code, taxes, etc. There shall be definite analysing code schemes for each operation (account)
(a necessity and significance criteria); if necessary it may be possible to add features.
Counteragent (suppliers, staff, banks) data (code) shall be marked in a separate field and not in the
account code;

Counter agent reference data (name, surname, identification code, telephone, contact person, etc)
shall be kept in additional Tables and shall be easy to search in case of necessity;

Data on goods and assets shall be marked in the system (name, group, dimension, location, etc);

Purchase process
Requirements for purchase and orders
The purchase process shall involve the following stages within the system:

 purchase budget;
 purchase request;
 balance verification – in case of stocks;
 order for the issue from the warehouse – when the balance is enough to meet the request;
 purchase quota - when the balance is not enough to meet the request and it is necessary to
send request for prices to the supplier;
 purchase order – on the basis of purchase quota or when a supplier is determined for the
requested stocks (expenses);
 acceptance to the warehouse – in the case of a stock;
 acknowledgement of liabilities towards the supplier;

During the purchase the following shall be possible within the system:

 purchase budget import from Excel in view of departments, branches, stocks or service groups;
 purchase request registration by the staff member;
 formation of a purchase order upon a request and without a request, according to the decision
of an authorized consumer;
 formation of several purchase orders on the basis of a request;
 types of services to be purchased and stock groups shall be selected from preliminarily
determined base;
 an authorized person shall take a decision during the verification of the balance in the case of
stocks – on the matter whether to issue directly from the warehouse or to continue the
purchase process (whether to make a direct purchase or to select a supplier);
 Determination of the major list of suppliers according to the types of services and stock groups
as well as determination of recommended group of suppliers;
 During filling up of an order of purchase when selecting stock or service groups, selection of
suppliers designated for this group only;
 During filling up of an order of purchase the price of requested stock or service shall be
automatically completed in the quotas or from the prices preliminarily included according to
the suppliers; prices may be changed only by an authorized person.
 comparing of the requested stock and service in terms of their prices and quantity with
preliminarily determined data. In the case of deviation –request of additional authorization
and determining reasons of such deviations;
  the request and the purchase order shall undergo appropriate authorization levels before the
activation;
 determination of authorization levels depends on the purchase type and amount limit;
 generation of the purchase agreement for the consumer in accordance with a template
included in the system;
 registration of agreements and control of dates;
 monitoring of receiving goods and/or service depending on the purchase and control of dates;
 generation of the forms of invitation for the purchase quotas from for suppliers; export to
excel and then importing already supplied and completed prices;
 selection of suppliers for quotas by tender or request for quotation.
 keeping a history of suggestions received from suppliers.

The following information shall be included in the purchase order:

o a unique code shall be assigned to purchase;

o on the basis of which request such order was made;
o which supplier is the order made for;
o group of service or stock;
o concrete name of service and stock;
o quantity;
o dimension;
o price;
o warehouse/branch/department where balance should be reflected;
o comment;
o order authorization status;

It shall be possible to receive different stocks in one warehouse, and in the case of service it
shall be possible to assign to different departments or branches;

It shall be possible to generate amount request form from the system. Amount request form may be
necessary before or after supply of goods/services. The form shall be printed out from current orders
and from registered/received orders.

Amount request form, depending on the need of requested amount, shall contain different fields and
shall undergo appropriate authorization.

Stock registration
Nomenclature of goods

The following shall be possible within the system:

 creation of stock catalogue;

 determination of stock category;
 assigning unique numeration to the stock;
 determination of different features for the stock such as color, style, size;
 determination of supplier’s code and name for the stock;
 more than one dimension unit shall be determined for each stock, for which the supplier shall be
able to determine conversion ratio, based on which this system will atomically recalculate stock
balance to the warehouse in relevant dimension unit;
 control of stock balances in view of the nomenclature, category, period and warehouses;
 reflecting stock-taking results.

Warehouse

The following shall be possible within the system:

 registration of several warehouses;

 determination of the location of the warehouse and a person in charge of the warehouse;
 monitoring of matters related to possible receiving and issuing according to the dates and
warehouses;

Accepting/issuing goods and moving goods

The following shall be possible within the system:

 registration of receiving of goods and making a link to particular purchase order. In the case of
deviation between purchase order and actually received goods the process of receiving goods
shall be continued by an authorized person only.
 after making a link with receiving of goods, the system shall automatically assign a status
“closed” to the purchase order;
 movement of goods shall be registered within the system on the basis of goods movement
order;
 determination of the type of movement (whether it is necessary to upload a bill of lading on
RS website);
 determination of the person in charge of the movement of goods;
 creation and activation of appropriate type of bill of lading on the portal of revenues on RS
website;
 registration of the issue of goods from the warehouse on the basis of appropriate order
created within the system (order of sale, order of write-off, returning the order);
 printing out of the form of acceptance from the system;
 type of write-off when writing-off stock and indication for audit;
 registration of stock selling;
 a buyer, the selling price or the audit assessment (if needed) shall be determined during the
selling;
 creation and activation of appropriate bill of lading from the system on the portal of RS website
during the selling;
 registration of stock destruction;
 upon the destruction of stock the evaluated price as a result of audit shall be determined;
 automated formation of appropriate accounting records;

Stock-taking

The following shall be possible within the system:

 organization of stock taking process;

 formation of stock taking list according to the warehouses;
 reflection of stock-taking results;
  integration of stock-taking number reader;

Registration of fixed assets

The following shall be possible within the system from the viewpoint of fixed assets:

Putting fixed assets into exploitation

 creation of groups and sub-groups and assignment of particular assets to appropriate groups
and sub-groups;
 creation of an individual card for each fixes asset with appropriate individual code;
 printing out of the number assigned after the stock-taking;
 assignment of a stock-taking number;
 determination of the person in charge, location and structural unit for each fixed asset;
 determination of the methods of financial and tax tear and wear and calculation and accrual
of tear and wear;
 accrual of accrued tear and wear according to the branch and department indicated on the
fixed asset;
 putting into exploitation on the basis of direct purchase and from the warehouse;
 reflection of expenses necessary for putting into exploitation in the value of fixed assets;
 reclassification of fixed assets, movement from one group to another;
 registration of fixed assets before the exploitation;
 Setting and de-setting;
 registration of components of fixed assets;
 determination of individual tear and wear for the composite parts of the fixed assets (where
necessary);
 devaluation of fixed assets;
 automated formation of appropriate accounting records;
 formation of appropriate analytical accounts;

Movement of fixed assets

 registration of movement;
 determination of the type of movement (whether or not in needs a bill of lading to be uploaded
on RS website);
 determination of the person in charge for the movement;
 registration of the person in charge, location and structural unit during the movement of fixed
assets;
 reflection of tear and wear of fixed assets during the movement proportionally in the expenses
of an appropriate organisational unit;
 during the movement, where necessary, creation of the bill of lading from the system on the
portal of RS website;
 automated formation of appropriate accounting records;
 formation of appropriate analytical accounts.

Modernization of fixed assets

 registration of modernization as of current repair expenses and capital expenses;

 increase of the value of fixed assets by capital expenses;
 write-off, addition of the composite parts of fixed assets;
  automated formation of appropriate accounting records;
 preparing appropriate analytical accounts;

Insurance and guarantee

 registration of the warranty service for the fixed assets and control of dates;
 registration of insurance policies and control of dates;
 preparing appropriate analytical accounts;

Issue of fixed assets

 registration of the write-off of the fixed assets;

 determination of the causes of write-off when the fixed asset is being written-off and audit;
 registration of the selling of fixed assets;
 determination of a buyer, selling price or the audit assessment when selling fixed assets (where
necessary);
 creation and activation of appropriate bill of lading from the system at RS website portal;
 registration of the destruction of fixed assets;
 determination of the assessed audit value when the fixed asset is being destructed;
 automated formation of appropriate accounting records;
 preparing appropriate analytical accounts;

Stock-taking of fixed assets

 organization of a stock-taking process;

 stock-taking within the entire company as well as in view of departments/branches;
 formation of a stock-taking list according to the departments and branches and persons in
charge;
 reflection of the results of stock-taking;

Registration of expenses by the head office

The system shall enable:

 registration of preliminarily paid amounts on the basis of the monthly instruction (determining
the amount and period) in the expenses registry;
 registration of regular expenses under the agreements with counter agents on the basis of the
monthly instruction (determining the amount and period);
 assignment of expenses to appropriate expense unit (a branch, a department, a car, etc).
 registration of the benefits of staff members according to the types of positions, branches, and
budget (of the departments);
 import of data from fuel software into the system at the end of the month and appropriate
automated registrations on appropriate accounts;

Procedures for the registration of expenses by branches

Both parties to the between-branch operations (issuing and receiving) shall be automatically registered
by the issuing branch with one operation;

The branches shall have the possibility within the system to:

 purchase services;
  receiving and write-off stocks and fixed assets received from the head office;
 registration of other operations by the branch, which are not within bank system;

Procedures for the registration of salaries

The system shall enable to:

 import of salary and bonus calculation excel file according to the positions of the staff
members;
 formation of accounting records on the basis of the imported file according to the type of
salary and bonus for each staff member;
 registration of prognosticated bonus accrual for each month and revere registration for the
date of transferring amount for the following month;
 preparing analytical accounts with regard to salaries and bonuses according to the positions
of each staff member.

Integration with a bank system (T24)

Core purpose of the system is maintenance of all business portfolio, loans, deposits, client accounts,
other assets and liabilities related to business activity.

System is responsible for interest accruals and all transactions related to most of the banking products
available in Credo.

T24 holds detailed information on loans, deposits, respective schedules, maturities, detailed
information on overdue items, etc. Also minimum required detailed information is available for the
clients (unique client id, type, sector, industry, gender and residence) required for the financial
reporting.

Core finance report is DAYTRN – consolidated report on debit and credit transactions based on
predefined criteria. That report includes ALL movements on ALL t24 accounts (including P&L)
populated through the last business day. That report is used to update account balances for the
particular day in the finance/accounting system.

 portfolio operations export from T24 and import to the ERP system;
 import to T24 of all other types of operations except for non-monetary operations reflected in
the ERP system and portfolio operations;
 banking and cash-desk operations shall be simultaneously reflected in the ERP system;
 import of non-monetary operations from the ERP system into T24;
 import into or export from the ERP system shall be carried out using SQL intermediary Tables;
 the account or transaction type existed within the ERP system shall shave the T24 account
assigned;
 total of general accounts within the ERP system and T24 (debits and credits) shall be balanced;
 easy reconciliation tools between two systems;

Monthly operations
The system shall enable to:
  the possibility of the registration of acceptable interest rates on the funds, current accounts
and deposits of the bank by importing the excel file;
 the possibility of the registration of interest rates on loans taken from banks and financial
organizations by importing the excel file;
 registration into expenses/revenues of loan issuing commissions and Origination fee deferral
(expenses/revenues of future periods) using the monthly instruction ( determining amount
and period);
 completion of the following operations using periodic instructions of the closing of the month
(or the day):
o closing of 24054 and 24154 accounts;
o conversion of profit and loss accounts to GEL;
o balancing of 26 accounts;
o transfer of 26 accounts to the head office;
o distribution of the expenses of the head office among the branches.

It is recommended to carry out the following within the system during the day:

 operation of the closing of the day;

 conversion of currency accounts of profit and loss for the closed day and transferring to
appropriate GEL accounts;
 reshuffling of currency positions (balance accounts) for the closed day according to the rate
determined by the National Bank of Georgia;

Tax registration and accounting

The system shall enable to determine the necessity of assigning tax analytical codes for the accounting
and their significance criteria.

Preparation of the VAT declaration

The system shall enable to:

 indicate the number of invoice in a separate field;

 restrict the format of the invoice number for non-resident legal persons;
 completing registry of received invoices, also the base to be taxed by VAT and VAT amount
shall be identified according to the type of received service, stock or fixed assets;
 generation of the registration of services rendered by non-resident persons in accordance with
the type of service rendered by him/her/it.
 formation of analytical accounts of taxed income indicating necessary accounts and logics;
 selection of VAT to be paid from income on the monthly bases using the monthly instruction
and in the case of branches the transfer of the VAT to the head office;
 selection of deductible VAT amount from expenses on the basis of the monthly instruction
indicating taxable and non-taxable income and transfer to the deductible VAT account;
 automated registration of covering reverse VAT;
Preparation of declaration on information about revenues and disbursements
Generation of the registration of operations taxable with income tax depending on the disbursements
for staff members or the type of counter agents and the service rendered.

Declaration of profit
For the annual profit and loss accounting the following shall be ensured by the system:

 taking into consideration different methods for extracting revenues and expenditures data
from the accounts (balance, debit turnover, credit turnover, cash basis, registration of assets,
deducting expenses for car wash coupons and their inclusion into total expenses, etc);
 services rendered by persons with statuses of micro and small business shall be deducted from
all types of expenses;

Property declaration
Generation of analytical reports on the mean annual value (based on financial accounting) of fixed
assets.

Budgeting and reporting

Budgeting
The system shall enable to:

 import budgets from the excel file;

 the possibility of keeping and modifying different versions of budgets;
 using different budget data in the analytical reports;

Technical requirements:
 The system shall operate with MS SQL 2012 or 2014 database;
 Application Server and Database Server shall be placed on different physical and virtual
servers;
 Application should have ability to run on any resolution screen and standard platforms:

o Windows (minimum Windows 7);

o Web;
o Mobile (Windows, Android, IOS);
o Tablet (Windows, Android, IOS);

 server’s operation system shall be minimum Windows Server 2012 R2;

 150 users shall work within the system simultaneously;
 the system shall be accessed by the configuration of access right by the application on the
Domain User;
 it shall be possible to assign desired Group, Role and Permission Set to any user of the system;
 the possibility to export data/reports to Excel, Word, PDF and other standard formats.