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5 best practices for intercompany accounting Logo aicpa

  Sabine Vollmer |   Free |   AICPA |   01 Dec 2016 |   Journal of Accountancy

Increasingly complex multinational value chains, partly the result of industry consolidation of globalization, and more scrutiny from auditors and regulators are causing more and more companies to run into serious and costly intercompany accounting problems. Applying standards across the enterprise can help multinationals meet finance, tax, and regulatory requirements, aiding in the prevention of costly problems. 

Topics covered:
  • Management accounting: Technical: Accounting information systems: Information systems environment, Foundational

1 Comments/Reflections

Bernhard Heyns

Bernhard Heyns Dec 2016

During my period working for a US listed fortune 500 company we faced thousands and thousands of IC transactions monthly, the workload exceeded the capabilities of our accountants on the ground which in return caused the reconciliations to become of out date.

The biggest problems we faced we repatriating cash from certain African countries. The intercompany invoices remained outstanding for long periods which in return then raised the issue with our auditors in these countries.

Intercompany transactions really is a beast on its own, especially when the intercompany branches are in different countries, you then need to start implementing transfer pricing policies to ensure you comply with the local customs regulations.

What did help was to have dedicated intercompany teams reviewing and ensuring the quality en reliability of the intercomany accounts.