PodChats for FutureCFO: Why intercompany accounting is crucial for post-merger success

Large companies typically have subsidiary businesses that sell to each other. The idea is to build capability to deliver a vertical stack of services and expertise, and essentially, keep the money in the group. The problem is that most subsidiary businesses have enough independence to decide on what tools and technologies they can use to support their business. Sister companies become just another supplier. The challenge arises when it comes to consolidating the data and transactions, to the parent company. According to EY, organisations are fighting through a thicket of clashing policies, processes and technologies when handling intercompany transactions.99% of intercompany stakeholders participating in a Dimension Research study say intercompany is becoming increasingly complex and challenging, with 58% reporting that the volume is more than five times the annual revenue. But in the quest to understand the challenge, 86% agree that intercompany is a very much misunderstood concept, while 81% agree that intercompany is complex and messy.In today’s PodChats for FutureCFO, we are joined by Victor Ng, regional vice president for Asia, BlackLine, to talk about the concept of intercompany accounting.1.       What is intercompany accounting?2.       How does it relate to intercompany financial management?3.       What are the issues businesses face with intercompany accounting and cash flow management?4.       How do these challenges negatively impact finance & accounting operations? Overall business outcomes?5.       Refinitiv data reveals that global M&A value reached US$5.8 trillion in 2021, up 64% from 2020. Why and how is the automation of intercompany accounting crucial for post-merger success?6.       For CFOs, what are the intercompany red flags they need to be looking out for before they affect the business?7.       Can you name some best practices to achieving intercompany accounting excellence?8.       Advise on the next step for CFOs looking to being in intercompany accounting practice?