Intercompany Automation and ERP Functionality

Many organizations have realized the efficiencies that can be made through centralizing production, support, sales and distribution. This gives rise to the need to sell into multiple countries, and thus multiple tax authorities, from centralized locations.

In many organizations where centralization is inappropriate, intercompany activity arises on a small scale and does not raise a significant problem. However in organizations that can fully embrace centralization, the need for intercompany activity can escalate to involve almost every trade sale made by the company.

It is this escalation in scale that puts the need for the automation of intercompany activity center stage for many organizations.

Traditionally, functionality for intercompany activity is provided piece meal, and works in different ways in different areas of the ERP solution. In general the functionality is designed to address low volume activity, and becomes unwieldy when applied to high volume applications.

The need for intercompany activity is driven by the desire to centralize, whilst meeting regional tax compliance. The challenge is that tax legislation is different around the world, and changes frequently. Consequently business methods deployed to maximize efficiency in both operational and tax efficiencies, necessitates that software solutions must be flexible and easily adapted to changing circumstances.

The challenge is that the solution to intercompany activity cannot be predefined in the software. The functionality needs to be defined by configurations that can be monitored and adapted easily by the business community. Creating the flexibility needed to meet current and future intercompany requirements.

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