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Transforming intercompany transactions drives frictionless close

Malgorzata Bateup
14 Oct 2022

Leveraging digitalization and a frictionless, end-to-end approach to reimagine intercompany transactions helps you move closer to implementing a continuous close – leading to improved decision-making, fewer errors, and better control of your balances.

The intercompany process – specifically reconciliation and balancing transactions between trading partners – is considered by many organizations to be one of the largest bottlenecks in financial close.

Indeed, the effectiveness of the intercompany process impacts the speed of the close, accounting complexity, and regulatory risk exposure – and many organizations are looking to transform the intercompany process, as part of a wider transformation of their finance and accounting (F&A) operations.

Simplify intercompany transactions

To achieve this, you firstly need to look at intercompany transactions from end-to-end – starting with the agreements made between trading partners, through to invoicing and posting, and reconciliation and settlement.

The key to a seamless way of working is proper implementation of polices and rules, and an operating model that ensures compliance with them. Defining, communicating, and executing your intercompany policies globally help to eliminate or minimize inconsistencies and set up transparent expectations that are easier to achieve. For example, including obligatory pre-agreement or re-approval processes for intercompany charges in your policies, helps to eliminate disputes and reconciliation issues.

Establishing an intercompany Center of Excellence (CoE) can also ensure that rules are followed, which improves your policy adoption levels, control, and process standardization of the intercompany process.

Digitalization helps intercompany processes become invisible

The second element of intercompany transformation is digitalization. Leveraging ERP-integrated workflows – with the help of digital technology solutions such as BlackLine and Trintech Cadency – enables automated invoice posting and automated reconciliation processes.

These solutions complement your intercompany policies to create an entirely invisible intercompany process that requires minimal human intervention. And by adding pre-agreed charges into the process helps you eliminate the need for invoice approvals, which reduces reconciliation differences.

Automated invoice posting and cut off time also gives you more time to monitor your intercompany transactions, which helps improve decision-making and minimize errors prior to the close. This enables you to control your balances on an ongoing basis, not just during the close.

In conclusion, taking an end-to-end approach, and leveraging digitalization to transform your intercompany transactions, can help you move closer to implementing a frictionless, continuous close.

Discover more about how Capgemini’s AI.Controllership – part of our Frictionless Finance offer – helps bring more automation to your R2A processes, while taking you one step closer to realizing a continuous close, contact

About author

Malgorzata Bateup

Record to Analyze Global Process Owner, Capgemini’s Business Services
Malgorzata Bateup focuses on developing new products in the record-to-analyze area. She has over 20 years of experience in finance and accounting, with the last 12 years dedicated to transforming our clients’ processes and operations.