Inter/Intra-company Reconciliations

Key Benefits

  • Automate inter-company and intra-company trading account reconciliation
  • Provide a standard and workflow-enabled tool for the resolution of intercompany exceptions
  • Speed time to close books at month and quarter end
  • Ensure visibility into cross-border internal trades

 

Overview: The ReconArt solution supports the reconciliation of balances and transactions between and among different trading entities within the same parent organization.

Purpose: Businesses comprised of multiple companies, often in different geographies and dealing with various currencies, typically trade goods and services among themselves. There are often multiple ERPs and other sub-systems involved. To ensure the accuracy of reported financial statements at period end, both balance and transaction level data needs to be properly matched and reconciled. Where discrepancies exist they need to be researched, addressed and appropriate adjusting entries made in the ledgers of one or more entities.

Compliance: Healthy intercompany reconciliation avoids regulatory and statutory exposure by addressing those requirements supported by best practice. With governments’ taxation bodies increasingly scrutinizing intercompany trading to determine if it is being done solely for tax avoidance purposes, the need for a clear and audit-efficient way to match all trading activities between companies and across borders is ever more valuable.

Challenges:

Level of effort; Quality of work. Intercompany reconciliation is typically done manually or semi-manually with high staff costs. This intensive work is also prone to error.

Pressure at Close. A time consuming intercompany reconciliation slows the period close process as it typically starts later in the close cycle as part of consolidation of accounts.

Distributed source data. Data is often derived from multiple sources, in different formats and can be complicated further with different currencies and moving exchange rates.

The Solution:

  • Data preparation and matching. ReconArt™ allows for both balance and transaction level data to be imported, normalized and enriched prior to matching. Any number of intercompany match rules can set up by business users, leveraging exchange rate and other lookup tables as needed.
  • Allocation of codes and work. Where discrepancies are identified ReconArt™ can automatically categorize them and route them to the appropriate person for review. The simple yet powerful exception and case management functionality within ReconArt™ ensures and enforces a streamlined and consistent workflow for the review and resolution issues.
  • Workflow and control. Using standard functionality, adjustments can be identified, reviewed and approved. Journals are then created to be posted back to the relevant general ledger systems.
  • Complete transparency and audit-ability. ReconArt™ provides a complete audit trail of how intercompany activity is accurately recorded in all base systems and in the consolidated financial statements of the parent or holding company.
  • Efficiency and speed. ReconArt™ intercompany reconciliation significantly shortens the time taken to consolidate multiple entities’ books and close the period.

 

Setup Versatility: The ease with which business users can define the mapping, importation and enrichment of data from multiple sources makes ReconArt™ particularly suitable to handling high volume, complex intercompany reconciliations.

 

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