Intercompany Accounting
Increasingly organizations are looking to develop new business models in response to changes in tax legislation. With commissionaire or multi-tier models often replacing the traditional Buy/Sell model.

The Virtual Trader solution uniquely provides the core functionality to implement any trading model, and the flexibility to allow companies to continue to evolve their solutions as their market changes, without the need for customization.

Buy/Sell

Virtual Trader supports Buy/Sell activities with additional flexibility around transfer pricing, accounting and multi-tier Business models.

Virtual Trader also supports ‘intangibles’ such as services, supports contracts, software & subscription trade, intellectual property etc.

Commissionaire & Commission Agent

Virtual Trader supports disclosed & non-disclosed commissionaire and commission agent Business models.

Virtual Trader automates commission accounting between the principal and commissionaires.

Virtual Trader can evaluate intercompany tax such as VAT, and withholding tax accruals where appropriate.

Virtual Trader provides printed intercompany Invoices.

With multiple tiers of intercompany activity, Virtual Trader can operate different Business models on each tier.

Cost Plus Support Agreements

An automated system within the Virtual Trader solution that uses nominated cost and revenue values from General Ledger, and applies calculations or uplifts to create intercompany payments for subsidiary entities.

Virtual Trader also supports forecast and ‘true-up’ in arrears, operating on year-to-date figures.

Transfer Pricing

Multi-national organizations are under increasing pressure to have greater control of Transfer Pricing.

This is often achieved through a monthly process, most commonly a reimbursement of operating cost plus markup, often referred to as Cost Plus, and is described in the ‘Cost Plus Monthly Fee & Tax Agreement’ section.

Where transfer pricing is too complex, or a monthly fee is not permitted, then transfer pricing must be evaluated on a transaction basis.

Virtual Trader can provide automated solutions for both monthly fee and by transaction methods.

When operating on a transaction basis, Virtual Trader has the flexibility to select common or client specific Pricing Methods, based on business scenario. It can then automatically select price, discount, cost and markup based on the parameters relating to your business. More complex pricing can also be achieved using spreadsheet style Formula Sets.

Transfer pricing can be controlled independently where multiple tiers of intercompany arise, as with trade through scenarios.

Cost Plus Monthly Fee & Tax Agreements

Multi-national organizations are under increasing pressure to have greater control of Transfer Pricing.

A common approach is a monthly reimbursement of operating cost plus markup, as this is typically a more simple process to administer and audit.

Virtual Trader has functionality designed specifically to automate such schemes. Usually driven by cost and revenue from the General Ledger, additional or alternative sources of accounting can be accommodated.

Standard cost plus functionality is seeded, but can be extended to provide alternative approaches or include more complex algorithms if required.

The process can work on actuals, but also provides forecast and true-up options, operated on a Year-To-Date basis. ‘Trial’ processing allows operation in a report only mode, allowing review, re-run and commit functionality.

Transfer pricing on a transaction basis is discussed in the ‘Transfer Pricing’ section.

Multi-Tier Intercompany Operation

Virtual Trader supports the creation of multiple tiers of intercompany accounting based on business scenario.

The tiers are not restricted to goods movement, and can be used to create intercompany transactions, payment of intellectual property, customs declarations, forwarding costs and commissions etc.

Transfer price; Business model, preferred currency, accounting and more can be controlled separately on each tier.

Intercompany Invoice Print

Where a receivables application is used to produce intercompany transactions, this will usually provide an invoice print capability.

However intercompany can arise in many places and using receivables to get an invoice print is not always a viable or desirable option.

Virtual Trader can produce intercompany invoice documents as an alternative to a receivable sub-ledger. Documents can be produced against any transaction processed through the product, regardless of its origin.

Documents can be produced as discrete invoices, but as these are generally for audit and compliance purposes, more commonly these documents are produced in a consolidated listing style.

As these documents are produced through the standard Oracle BI Publisher functionality, the client can customize the layout of their invoicing through the templates provided by Virtual Trader.

Virtual Trader has functionality to provide invoice numbering, which is usually sequenced by company or by Tax Registration.