{"id":5532,"date":"2022-07-26T23:37:14","date_gmt":"2022-07-26T23:37:14","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=5532"},"modified":"2022-07-28T18:07:58","modified_gmt":"2022-07-28T18:07:58","slug":"how-we-fixed-the-intercompany-accounting-process-for-gbs","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2022\/07\/how-we-fixed-the-intercompany-accounting-process-for-gbs\/","title":{"rendered":"How We Fixed the Intercompany Accounting Process for GBS"},"content":{"rendered":"

Introduction<\/strong><\/p>\n

Intercompany Accounting, the process for recording the transfer of goods and services between legal entities, is a great challenge for many companies, even though all parties to the transaction are part of the same company, which would suggest complete automation<\/a> should not only be possible, but it should also be the norm.<\/p>\n

Company Experiences<\/strong><\/p>\n

A Peercast discussion in Peeriosity\u2019s General Accounting (R2R) research area<\/a> featured a global company with $20B in annual revenue discussing the digital transformation of the global Intercompany Accounting Process, with their Director RTR Digital Transformation and GPO RTR leading the discussion.\u00a0 The scope includes accounting for all Intercompany goods and services with specific responsibility for formal invoicing (including sourced cost, mark-up per transfer pricing rules, allocations for equitable cost sharing per arm\u2019s length requirement, and indirect taxes), GL posting of AP and AR to applicable ledgers, Intercompany balancing, setting global Intercompany policy, and ensuring compliance with Intercompany contracts between parties.<\/p>\n

Prior to a one-year project to implement advanced software including Blackline\u2019s Intercompany Hub, there was a three-year effort to create defined standards and rules for Intercompany transactions that could be rigorously applied, with transaction limit thresholds created as appropriate.\u00a0 This effort required close coordination between many impacted process owners including Finance, Tax, Treasury, and Legal. \u00a0Once the processes were defined to a very detailed level, Senior management sponsorship was critical to achieving compliance between legal entities.\u00a0 The rollout required significant training<\/a>, but because of strong sponsorship, there were no debates or discussions regarding what approach would be followed or how specific transactions would be handled.\u00a0 This steady state with no second-guessing for how transactions would be recorded was critical to the successful implementation of new technologies.<\/p>\n

Before the implementation of Blackline, the company did have a purchased solution that met many of their business requirements, but unfortunately, the solution was not able to be upgraded to SAP S4 HANA.\u00a0 Key benefits from the implementation of the Blackline Intercompany Hub included:<\/p>\n