Intercompany (IC) eliminations are often described as a headache. Why? Well, they make up one of those recurring processes which is vitally important but very difficult and cumbersome if the wrong tools are being used. When you have an actual headache, of course, a short-term fix is always available. A simple painkiller could give some relief, allowing you to carry on with your day. But unfortunately, for many Finance teams, intercompany eliminations don’t just cause small headaches. Why? Because if the “headache” isn’t treated correctly with a long-term solution, relying on manual processes or spreadsheets for intercompany eliminations can disrupt the financial close and reporting processes – directly impacting Finance’s ability to share reporting and insights across the business.
Why does pain exist so often in the intercompany process? It’s simple, really – organisations find themselves facing many common challenges. The result is a process that takes longer than it should and has a higher margin for error.
Here are a few challenges many Finance and Accounting teams face with intercompany eliminations:
Like in many other corporate performance management processes, not addressing these challenges can compound and prove devastating to Finance teams. Yet the challenges also offer an opportunity for change and transformation. In fact, a long-term innovative solution exists which can significantly relieve the pain for Finance teams.
Enterprise-class financial consolidation software applications such as OneStream provide powerful intercompany eliminations that can handle sophisticated business needs yet allow for easy reconciliation.
OneStream has developed the most advanced financial consolidation, reporting, and data quality solution in the market. This solution provides comprehensive intercompany elimination capabilities that can handle sophisticated business needs yet allow for easy reconciliation.
Using OneStream Intercompany, eliminations automatically occur at the first common parent in every alternate hierarchy. That means the eliminations are calculated at every consolidation point. In other words, each intercompany item has an “in and out” – for example, when matching a receivable and payable, they both offset through a common account. This powerful approach greatly improves insight and seamlessly handles the impact of major business changes (e.g., reorganisations).
Here are just a few of the benefits OneStream Intercompany offers:
The advanced architectural design of OneStream, combined with its reporting and the ability for users to drill down into transactional details, provides an unmatched ability to see and resolve intercompany balances and rapidly close the books at period-end.
Does your organisation need help to manage the complexity of intercompany eliminations? Do you want to avoid recurring headaches by using a robust financial consolidation and reporting platform for the long term? Read our e-book on Conquering the Complexity in the Financial Close, or hear how one of our customers is benefitting from these advanced capabilities in this video about Victaulic.