Overhauling intercompany processes? Why it pays to get IT on board first
Close collaboration with your IT counterparts will increase the odds of an optimum outcome.
Is optimising inter-company accounting on the agenda for your conglomerate or group in FY2025? If the answer is yes, it’s likely to prove an excellent move.
That’s because there’s a host of benefits associated with maintaining standardised back-end processes, underpinned by an automated intercompany financial management solution.
Provided you choose one that’s compatible with multiple invoicing, Treasury and
ERP systems, you’ll be able to ensure intercompany transactions are posted promptly and accurately, for starters.
When it’s implemented, there’ll be the opportunity to create a visibility layer that gives your finance team oversight of each ERP platform in the group’s finance ecosystem, and to deploy a centralised tool to enable those solutions to interact digitally.
Once individual charges and balances are fully aligned and visible, intercompany balances can be settled in a streamlined manner. And because the entire process is automated, that can occur as often as daily, rather than weekly or monthly as was the case in the past.
Adopting an intelligent approach to change
But while the case for intercompany accounting optimisation may already be made out, implementing the processes and platforms necessary to achieve it isn’t always a straightforward matter.
Unfortunately, examples of failed digital transformation initiatives are legion – by McKinsey and Company’s reckoning, an extraordinary 70 per cent don’t achieve what they set out to do – and the consequences when that happens are often far reaching.
In addition to the time and resources that must be written off, organisations can be left struggling with the same old legacy systems they started with, and no chance of upgrading them until corporate memory fades.
The stakes couldn’t be higher. That’s why it pays to do everything you can to ensure your intercompany optimisation initiative becomes an exemplar of success and not a textbook example of how not to execute on a business-critical project.
Involving ICT from the outset
Ensuring you are closely aligned with the IT department from the get-go is critical. Perhaps your spheres of responsibility and influence haven’t intersected a great deal up to this point – aside from when the latter has been called upon to deliver technical support – but breaking down those silos can help you move ahead faster.
During the initial information gathering phase, your IT colleagues should be able to provide valuable insights, into which aspects of your current systems are wasting time and resources, and where things might conceivably be improved. Obtaining their input on whether existing systems can achieve the key objectives can also be helpful: coming to agreement at this early juncture avoids damaging debate down the track and will ensure you present a united front when seeking C-suite approval for your project.
Once you’ve jointly decided an upgrade is warranted and obtained agreement for it in principle, you’ll need to develop a detailed, strategic plan. Doing so in conjunction with ICT will give decision makers greater confidence your optimisation strategy is sound, and the solution architecture you’re considering is fit for purpose.
And having your IT colleagues on the case when you’re selecting an intercompany solutions provider should help you settle on a vendor that ticks all the boxes when it comes to functionality, interoperability, implementation time and costs, support requirements, and time to value.
Moreover, the benefits of working together won’t end when your new intercompany solution is up and running. Strengthening ties with IT will make it easier to get their buy-in on future finance initiatives, while the time and cost savings you’ve generated will free both teams up to get started on brainstorming and strategising.
Towards a stronger future
Improving intercompany processes can result in enhanced visibility of your group’s position, accelerated cash flow and greater ability to take advantage of emerging opportunities. Those are powerful benefits for businesses of all stripes and sizes, particularly in today’s challenging economic climate.
That’s why it pays to pull out all the stops to ensure your intercompany optimisation initiative meets and exceeds its goals. If that’s a priority for you and your team in FY2025, constructive collaboration with your counterparts in IT is likely to serve you extremely well.
Rosie Cairnes, Regional Vice President, Australia & New Zealand at BlackLine
