VW drives off with SunSystems

Working With financial Systems Provider Eclipse computing, Volkswagen International Finance N.V. has managed Several Currency transitions, the adoptionof IAS and reduced month end reporting from 15 to 5 days whilst continuing to support the real time needs of a Capital Market organistation.

 

CAPITAL MARKETS

Volkswagen International Finance N.V. (VIF) is a capital Markets company providing finance for other VW subsidiaries around the world. Over the Past decade the VW group has grown significantly, including the incorporation of Seat and Skoda and boasts some of the world’s most prestigeous marques such as Audi, Lamborghini, Bentley and Bugatti. 
    

Excellent Financial control is a core element of the company’s business. Alexis Oelrich, Managing Director, VIF,explains “we make loans to VW subsidaries worldwide based upon funding raised from capital Markets where we place bonds and notes which are purchased by investors.we also undertake treasury management activites with regards to cash flow, foreign exchange and interest rate risk.”

 

In addition, prior to significant VW group finance consolidation, a sister company, Seat Motors International B.V. used ti handle all invoicing for Seat across Europe and it was this business that originally prompted the company to invest in SunSystems.Complex accounting procedures and a dated system generated pages of paper based reports that were, according to Oelrich, cumbersome, unfriendly and often irrelevant. He adds, “ The system was also terribly expensive.” 
    

 VIF turned to a US based consultant to ascertain its system requirements. Key features highlighted for a new financialsystem included Multi – currency capability, ease of use and excellent report production. VIF then opted to work with SunSystems Implementor  Eclipse Computing B.V., the Dutch Subsidarie of the international financial systems provider. 
 

Says Oelrich,“Underpinning the decision was the expertise in international systems; VIF works in virtually every global currency from Yen to HK$, so Eclipses experience in global deployments was a key consideration and has proved to be a real asset to our business.”

 

CURRENCY CHANGE

Since implememtation VIF has undertaken two Currency migrations. The first was a move from US $ to German DM following the intergration of Seat’s accounting processes in to the VW as part of the companys consolidation and there-fore another conversion of the base currency became necessary in view of the introduction of the Euro.
Says Oelrich, “working with Eclipse the process of Base currency was no problem for us.”
    

The process stood the company in good stead for the introduction of the euro in 2001, a migration that many organisations found extremly costly. “ we had a significant advantage over other organisations with the euro introduction,” he says. “ while other companies spent months getting ready for the euro, Eclipse handled the entire process in one day , with absolutely no impact on the business at all.”
    

Eclipse and SunSystems also ensured a smooth Y2K compliance process that, again, minimised business impact. Says Oelrich “ over the last couple of years VIF’s relationship has enabled the business to undertake significant impoed changes without suffering the negative impact endured by so many other organisations. That close partnership has been a significant asset.”

 

IAS

One of the key requirements for the accounting software was improved

reporting and VIF makes extensive use of SunSystems’ Vision  reporting tool. Angela Scholz, Financial Controller, VIF,  Says, “Vision enables VIF to produce reports very quickly and conveniently.

We can also drill down to the detail to rapidly ascertain, for example, our profitability each month, comparisons to previous months and   years and our leading position to each customer.” The time factor is critical, given that VIF’s corporate finance has reduced the month end accounts reporting deadlines from 15 to 5 days over the past ten years. She says, “The speed of reporting is very important. Our deadlines are now extremely tight and we could not meet  these deadlines without the functionality and flexibility of Vision.”
    

 In Addition , in 2001 VW moved on to the International Accounting Standard (IAS), a move that has been supported by both SunSystems and Eclipse. Says Scholz, “ the main advantage of SunSystems is that it is highly tailor able and flexible, which has enabled VIF to move to IAS easily.”
    

Looking forward, the company will have to address new reporting requirements likely to arise from Basel II, as well as ever increasing European legislation, which again demands new reports. “ We feel confident in our ability to meet these requirements using Vision,” she says.

 

BUSINESS GROWTH

VIF has seen its business expand significantly over recent years, with up to 60 Capital Market issues each year. Says Oelrich, “Over the last ten years Volkswagen International Finance’s balance sheet assets have grown to 8 billion euro’s as a result of a jump in large deals.”
    

Despite this growth, the company has been able to handle financial administrative processes with the same personnel. Oelrich concludes, “Business growth, combined with Y2K, Currency changes and the adoption of IAS have had an impact on VIF’s financial systems requirements. However, both  SunSystems and Eclipse have been able to handle these changes and deliver a system that meets our evolving business needs without requiring major investment or business impact.”