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Overcoming the Top 7 Intercompany Accounting Challenges in SAP ERP Financials
David Cohen EY
1
In This Session
• Discuss common issues in Intercompany (IC) processes
• Review common design solutions for seven main processes
• Examine project challenges for implementing IC processes
• Consider how existing and future HANA functionality can improve
efficiency of IC processes
• Explore Leading Practices in the areas of systems, master data,
processes, and people related to IC
2
What We’ll Cover
• Intercompany Processes and SAP ERP
• How Can HANA Improve IC Processes?
• Challenges for Implementation
• Leading Practices – Systems, Master Data, Processes, and People
• Wrap-up
3
Intercompany Processes
• Intercompany Product Sales
• Intercompany Charge of Services
• Intercompany Lease of Assets
• Intercompany AP/AR Reconciliation
• Intercompany Treasury (In-House Cash)
• Intercompany Profit Elimination
• Intercompany Month-End Closing
4
Common Intercompany Issues
• Top-side, high-level entries
• No ability to isolate Foreign Exchange (FX) impact on IC profit reserve
• Limited ability to analyze gross profit on a consolidated cost basis
• Intercompany profit reserve based on estimates and averages
• Lost goods, goods stuck in transit, COGS without revenue, revenue without
COGS, etc.
• Lack of established policies and procedures driving IC activities
• Not leveraging common processes across multiple countries into one Shared
Service Center
Manual
Processes
Poor Visibility
Lack of
Control
Lack of adherence to a process resulted in unexpected IC write-offs and tedious
manual processing
• Long close cycle times and difficult reconciliation of IC processes
• Highly manual and spreadsheet-based process
• No ability to adjust obsolescence, revaluation, PPV, or consumption
variances for IC profit
• Poor data quality and inconsistencies
• Low accuracy of product costing
5
Why Is Intercompany a Challenge in SAP?
• Strictly from an SAP functional perspective:
Many IC processes are not represented by specific SAP
functionality
Sometimes there is no out-of-the-box standard solution
There might be multiple possible designs and solutions for a
specific IC process
IC processes are very dependent on company and the industry
• Processes in this presentation are depicted as generic
suggestions and not as specific “unique” solutions with all
steps
• GAPs will vary depending on company, industry, processes,
and systems architecture
6
Intercompany Processes
• Intercompany Product Sales
• Intercompany Charge of Services
• Intercompany Lease of Assets
• Intercompany AP/AR Reconciliation
• Intercompany Treasury (In-House Cash)
• Intercompany Profit Elimination
• Intercompany Month-End Closing
7
Design Principles
• Adopt Stock Transfer Orders
• Establish Transfer Price agreements harmonized with SAP ERP
design
• Use EDI to automate booking of payable upon creation of
receivable – no manual intervention after Goods Receipt
• Handle Invoice Receipt automatically without manual intervention
(reduces time required for month-end closing)
Special care needed for:
• Country Taxes (might require implementation of User Exit)
• Additional Lines (freight, customs, etc.)
8
Process Flow (Main Activities)
9
Key Enablers: Stock Transfer Order and Goods-in-Transit Functionality
• Stock Transfer Orders (STO) are used to move materials between
companies integrating both processes
• Both companies need to implement Materials Management and
Purchasing (MM) and Sales and Distribution (SD)
• Process is initiated by company that needs to receive the material
• It is necessary to pay attention to fulfilling country statutory
requirements – usually revenue recognition, transfer price, and
settlement of receivables/payables must be performed as if the
companies were independent
• The additional usage of Goods-in-Transit improves the financial
controls of inventory ownership
10
Key Enabler: Goods-in-Transit Functionality
• SAP ERP 6.0 with EHP5 supports full automation of intercompany
accounting, including accruals for stock in transit
Seller location
On-hand In-transit
Buyer location
On-hand In-transit
Transfer to
in-transit (681)
Issue paired with
receipt (685)
Goods receipt
(101)
Transfer to
in-transit (681)
Issue paired with
receipt (685)
Goods receipt
(109)
Logical receipt
(107)
Transfer to
in-transit (683)
Goods receipt
(109)
Goods receipt
(107)
Seller ships goods and retains
ownership while in transit. Buyer
confirms receipt, which
automatically books goods issue
and receipt to on-hand.
Seller retains ownership for part of
transit time. POD at title transit
point moves inventory to in-transit
to buyer. Final receipt moves
inventory to on-hand at buyer.
Intercompany sale recognized
immediately at time of goods
issue. Buyer holds inventory in-
transit until physical receipt, which
moves inventory to on-hand.
Intercompany invoicing is automatically triggered
when title transfers between companies
Inventory location by status, ownership, and movement
User task performed in SAP
Title transfer point that triggers billing
1. Ship goods
1. Ship goods
2. Create proof of delivery 1. Ship goods 3. Receive goods
2. Receive goods
2. Create proof of delivery
11
Intercompany Processes
• Intercompany Product Sales
• Intercompany Charge of Services
• Intercompany Lease of Assets
• Intercompany AP/AR Reconciliation
• Intercompany Treasury (In-House Cash)
• Intercompany Profit Elimination
• Intercompany Month-End Closing
12
Design Principles
• Use Intercompany Charge of Services process to create and
charge a variety of expenses between Company Codes
• Accumulate charges either by direct posting or with periodic
assessment into Work Breakdown Structures (WBS)
• Calculate and post invoices (AP/AR) at month end or ad hoc
• Use EDI and IDoc integration to automatically create the Accounts
Payable invoice, booking it at the same time as A/R
• Consider each type of process carefully. As this is not a standard
process in SAP, there are several alternatives on how to trigger
the process or how to deal with specific charges (IT fees, HR ex-
pat charges, training, etc.)
13
Process Flow
14
Design Principles
• Consider the creation by the Buyer of a blanket PO authorizing the
charges while seller creates a Sales Order for automatic billing
The reference PO is used to post charges to the receiver cost
object
Other types of POs can be considered depending on specific
business process
• Based on the WBS charges, the sales price is calculated and the
following documents are created: Billing, Accounts Receivable
Invoice, and Accounts Payable Invoice
Charges are collected on a WBS by direct posting or
by allocation of expenses from Cost Centers or other
objects
15
Design Principles (cont.)
• Trigger Billing and Invoicing periodically and automatically. It is
possible to add an ad hoc billing event as well.
• Activate Extended Withholding Tax (WHT) functionality for all
countries – you will need it
• Resolve issues with billing through Dispute Management − do not
hold back month-end closing
SAP GAPs:
• Full Processing of WHT in receiver side
• Posting Payable Invoice to the correct cost object
16
Key Enabler: Resource-Related Billing
• RRB allows for the summarization of data based on Project, Sales
Order, Service Order, and other cost objects in order to calculate
COGS and Revenue (Sales Price)
• RRB is powerful, but requires standardization and rationalization
of different business processes and scenarios
• There are several standard possibilities for billing: Cost-Based
Billing, Quantity-Based Billing, Fixed Price, Surcharges, and any
combination of these. They are used when simple Milestone or
Periodic Billing are not enough.
• RRB has extensive possibilities for configuration with the
possibility of custom logic by using User Exits
17
Example: Usage of WBS and RRB
Service Charges
Labor – $2,000
Fringe – $1,000
Other Costs – $3,000
IT Cost Center
WBS 123
Country A
Charges
Labor – $2,000
SAP – $5,000
Support – $8,000
Transferred to WBS 123
Labor – $500
Fringe – $100
Other Costs – $300
WBS 123
Labor – $500
Fringe – $100
Other Costs – $300
Allocated to WBS 123
IT Charges – $1,000
Allocated from IT
IT Charges – $1,000
Month-End
Billed – $1,900
COS – $1,900
A/R – $2,000* Revenue – $2,000
*Difference between COS and A/R is due to markup and surcharges
18
Intercompany Processes
• Intercompany Product Sales
• Intercompany Charge of Services
• Intercompany Lease of Assets
• Intercompany AP/AR Reconciliation
• Intercompany Treasury (In-House Cash)
• Intercompany Profit Elimination
• Intercompany Month-End Closing
19
Design Principles
• Leverage the key design principles from IC Sales of Products and
IC Service Charges processes
• Use a zero-dollar value PO (STO) to request rental equipment or
an asset
• Match Asset or Equipment to a Non-Valuated Material through
Serial Number
• Enhance SAP solution through user exits to handle all scenarios
of Withholding Tax and other Fees
Most prevailing technology nowadays:
Excel spreadsheets!
20
Process Flow
21
Key Enablers
• Link Assets, Equipment, and Non-Valuated Material by serial number
• MM/SD are the drivers for shipping the asset and creating the documentation
• For some scenarios, Cost Centers can be used as an indirect assignment of the location (country) of the equipment in order to derive invoice and tax charges (e.g., IT charges to different countries)
• It will probably be necessary to develop custom reports to manage end of lease and other management information
• Potential GAP for different country taxes
Use combination of Vendor, Country, and other Sales Orders/ Billing characteristics to derive correct tax calculation
• There is a need to keep synchronization between AM and MM modules for quantity (i.e., asset disposal)
22
Intercompany Processes
• Intercompany Product Sales
• Intercompany Charge of Services
• Intercompany Lease of Assets
• Intercompany AP/AR Reconciliation
• Intercompany Treasury (In-House Cash)
• Intercompany Profit Elimination
• Intercompany Month-End Closing
23
Leading Practices
• Use automatic Intercompany Reconciliation Process (ICR)
• Periodically process (during the month) the reconciliation of IC
payable and receivable – no need to wait for month-end closing
• Implement Dispute Management process for issues about price,
quantity, or quality
• Reconcile the documents and afterwards deal with the dispute
Subsequent debit and credit memos derived from the dispute
resolution will also be reconciled
Dispute does not interrupt month-end closing
The automatic creation of payable (in buyer’s GL) upon the
creation of the receivable (in seller’s GL) should reduce the
number of discrepancies to a minimum
24
Process Flow
25
Option 1: SAP ICR (Intercompany Reconciliation) Tool
• Solution collects data from Accounts Receivable and Payable
invoice level detail and enables matching analysis during the
month. It can accommodate non-SAP data.
• There is an opportunity to correct before month-end close,
reducing differences at month-end. Nevertheless, it is a batch
process.
• There is a process for automatic and manual matching with
standard or customized rules for reconciliation and matching
• ICR is an analysis tool. It does not correct the problem at the
source, but can initiate a dispute.
ICR works better in an SSC environment (centralized processing)
26
Option 1: SAP ICR (Intercompany Reconciliation) Tool (cont.)
Navigation Tree with
Differences to Reconcile
by Company and Partner
Company Unassigned
Documents Partner Unassigned
Documents
Matched Documents
27
Option 1: SAP ICR (Intercompany Reconciliation) Tool (cont.)
Communication (Email)
Workflow (Custom)
Dispute Case
28
Option 2: SAP BusinessObjects IC Reconciliation Tool
• Easier to include mixed ERP data
• Good integration with Consolidation (BPC)
• Good functionality for mixed currencies
• Works well in decentralized environment
• It can force agreement by generating adjustment posting
• More complicated integration to Dispute Management
How does it compare to SAP ERP ICR?
29
The total of the invoices
is equal to the balance in
the child account
The total of the
invoices differs from
the balance in the child
account
Matched invoices
(in Black font)
Unmatched invoices
(in Blue hyperlink)
Matching takes place
based on Invoice
reference created by
ERP System
Uploaded data
Amount not
matched
Option 2: SAP BusinessObjects IC Reconciliation Tool (cont.)
The declaring company’s invoices are compared to the partner’s. The invoices are matched automatically:
• Have the same transaction reference
• Contain the same transaction amount
30
Intercompany Processes
• Intercompany Product Sales
• Intercompany Charge of Services
• Intercompany Lease of Assets
• Intercompany AP/AR Reconciliation
• Intercompany Treasury (In-House Cash)
• Intercompany Profit Elimination
• Intercompany Month-End Closing
31
In-House Cash Concepts
• Simulate an internal bank and use it to fulfill financial services to group companies
• It can provide services such as: Provision of FX, Interest Rate Calculation, Liquidity Management, Intercompany Liability, Funding Management, Centralized Management of Payables and Receivables
• Two scenarios for Payables and Receivables
External Incoming and Outgoing Payment via In-House Cash (IHC)
All Incoming and Outgoing Payment with external entities is processed through the In-House Cash Center of the parent company
Internal Payments
The In-House Cash Center is used to manage all payments between company units and thus keeps cash resources within the group and optimizes how they are applied
32
Example: Vendor Payment Process Flow
33
In-House Cash
• Principles:
IHC is set up at the group headquarters
IHC is a virtual bank where subsidiaries have current accounts
Technically, it is a separate engine – that is the reason for the
complex ALE/IDoc configuration and the multiple steps in
processing
Accounts can be maintained in any currency
The handling of intercompany payments is fully automated
within IHC. On the due settlement date, the IHC accounts and
the general ledgers of the paying and recipient intercompany
counterparties are updated automatically with the relevant
postings.
34
In-House Cash: How Does It Help?
• Benefits:
Centralized payment and receivable transactions on a regional
or global level
Reduced cost and number of payment transactions, bank
account numbers, and bank fees
Surplus cash can be used for financing purposes; cash
resources are kept within the group
Better control of financial interest of subsidiaries
Processes internal payment transactions on a cost-effective
basis
Reduction of the number of external banks and associated
interfaces
35
Additional Points
• Critical configuration: ALE and IDocs. Functionality makes
extensive usage of IDocs. Users might have to be trained in
troubleshooting them.
• Accounts Payable has two steps (instead of one)
• SAP ERP functionality works well, but additional custom
management reports and interfaces might be required
• Plan enough time to test with banks
• IHC cannot be implemented for certain countries (e.g., China)
Difficult to have 100% adherence to IHC (country
regulations, external systems, etc.)
36
Intercompany Processes
• Intercompany Product Sales
• Intercompany Charge of Services
• Intercompany Lease of Assets
• Intercompany AP/AR Reconciliation
• Intercompany Treasury (In-House Cash)
• Intercompany Profit Elimination
• Intercompany Month-End Closing
37
Accounting 101: Intercompany Profit Elimination
Intercompany Sales has a
profit of $200.00
Overall inventory is overstated
by $200.00
Inventory must be adjusted (by
eliminating IC Profit) and taxes
deferred (30% of ICP, as an
example)
What is Intercompany Profit Elimination?
38
Accounting 101: Intercompany Profit Elimination (cont.)
• It looks simple until you add:
Balances from previous years
Price Purchase Variances (PPV)
Exchange Rate Differences
Currency Adjustment Translation (CAT)
Production Variances
Price Adjustments and Rebilling
Legal, Group, and Functional Currency
Billing Currency
Daily and Monthly Exchange Rates
Complex Production and Supply Chains (such as tolling)
39
Leading Practices
• Keep in mind that there are two processes that must be
addressed:
Determination of Actual Costing across Company Codes
Determination of Company Uplift (or Delta Profit, ICP)
• Use the latest SAP functionality in this area:
Parallel Valuation in Material Ledger (Legal and Group/
Management) with single and multi-settlement
Implementation of STOs for intercompany sales
Actual Company Uplift (EHP 5 – business function
LOG_MM_SIT)
Companies must be in the same Controlling Area
40
Option 1: Intercompany Profit as a Cost Component
• Inventory value is tracked in legal valuation and group valuation
in Material Ledger
• Company Uplift is a cost component of Group Costing
IC Inventory Profit is reported,
revaluating inventory and goods
movement based on Management
View:
• Inventory at hand
• Good Issue (for relieve of IC
Profit)
• Returns
• Scrap
• And so on
41
Option 2: STO Updating ICP
Invoice $1,100 Invoice $1,300
• IC profit is recorded in Legal Valuation
• Group Valuation excludes IC profit
• Actual costing is calculated based on Legal Valuation
• After period end, price differences and variances from sending
plant are transferred to the receiving plant in multi-level
settlement in group valuation
42
Option 2: STO Updating ICP (cont.)
• Uplift included in Legal Valuation plus Actual Costing in Group
Valuation
• Delta Profit is updated based on STO information
Condition type PR00 – legal valuation with profit markup
Condition type KW00 (group valuation) – value of the material in
the sending plant to be used as the invoice value on the
receiving side in group valuation
Updates Delta Profit with:
Purchase Price Value – Sender’s COGS (KW00)
• Can use BAdI for changes in how values are calculated and
updated
43
Changes in Development
• SAP and a partner client are developing and implementing a
solution that enhances Delta Profit calculation
Delta Profit is calculated based on
Transfer price – COGS selling Plant
Variances in multi-level settlement are forwarded to receiving
plants and update Delta Profit
External Sales or transfer of goods decrease Delta Profit in the
material/plant
More Information on upcoming SAP developments
Attend SAP Financials 2015 presentation:
Sanjeev Walia, EY, “Key Design Considerations for Legal and
Group Valuation in SAP’s Material Ledger”
44
Intercompany Processes
• Intercompany Product Sales
• Intercompany Charge of Services
• Intercompany Lease of Assets
• Intercompany AP/AR Reconciliation
• Intercompany Treasury (In-House Cash)
• Intercompany Profit Elimination
• Intercompany Month-End Closing
45
Leading Practices
• Implement one of the two SAP options for managing month-end
closing
SAP Closing Cockpit − standard SAP tool to monitor and
control the entire period-end closing cycle
SAP Financial Closing Add-On
More Information on SAP Financial Closing Add-On
Attend SAP Financials 2015 presentation:
Genco Odevci, EY, “I Implemented SAP Financial Closing
Cockpit in SAP ERP 6.0: Now What?”
46
Key Enabler: SAP Closing Cockpit
• SAP Closing Cockpit works through the definition of templates
and tasks lists executed during period end
• The key design elements are:
Defining organizational hierarchy for closing
Defining period close template
Assigning tasks to template
Defining task dependencies
Creating and releasing a task list – ongoing each period
47
Key Enabler: SAP Closing Cockpit (cont.)
• It provides a structured list of financial activities that
occur periodically
• The single-screen layout presents a period-close-centric view
• The purpose is to replace spreadsheet-based close checklists.
Embedded task dependencies can help prevent timing issues.
• Once a task is being worked on, its status will be visible to all
• Support documentation or a note can be attached to tasks
• Auditors accept completed task list printout as proof of close
completion
• SAP transactions or custom T-Codes can be directly called from
the Closing Cockpit. Task execution captured with a time
snapshot.
Source: Genco Odevci “Expert Techniques for Making the Most of the SAP Financial Closing
Cockpit” (SAP Financials 2014).
48
Additional Option: Usage of SAP Financial Closing Add-On
• It requires a separate license agreement
• It connects to multiple SAP ERP systems for remote runs
• It offers automated closing tasks, even in remote system. All task
types (transactions, programs, jobs, workflow, CPS [Central
Process Scheduling by Redwood] tasks) are available for the local
and remote systems.
• It has reusable task groups
• Tasks can automatically start when predecessors are done (e.g.,
run transaction in test mode; if successful, run in production
mode; if errors, send mail using workflow)
• It offers collaboration, notifications, and workflows
• It offers better real-time insight into the closing status
49
What We’ll Cover
• Intercompany Processes and SAP ERP
• How Can HANA Improve IC Processes?
• Challenges for Implementation
• Leading Practices – Systems, Master Data, Processes, and People
• Wrap-up
50
How Can HANA Improve IC Processes?
• ICR (Intercompany Reconciliation)
ICR works directly on the open items in AP/AR (central ERP instance)
Always ready to reconcile – no batch loading or matching
New Management Dashboard
• Material Ledger
Side-car solution implemented in several clients
Accelerated Closing Runs:
Material Selection
Single and Multi-Level Settlement
Post-Closing
In-memory computing increases speed of tasks due to almost
instantaneous fetching of data from the virtual “hard-disk”
51
SAP Simple Finance (Optimized Financial Data Architecture)
Legal/External
Accounting (FI)
Documents
Legal/External
Accounting (FI)
Totals tables
Management
Accounting (CO)
Documents
Management
Accounting (CO)
Totals tables
ERP Financials
Market Segment
Data
Legal/External
Accounting (FI)
Documents
Legal/External
Accounting (FI)
Totals tables
Management
Accounting (CO)
Documents
Management
Accounting (CO)
Totals tables
Profitability Analysis
(COPA)
Documents
Market Segment
Data
• No Data Redundancy
• Easy Reconciliation
• High Flexibility
• Less Data Volume
• High Performance
• One-stop shop for all operational financial reporting
• Drilldown to atomic detail
One Unified Accounting Document
• Data Redundancy (Totals tables, Data Warehouse)
• High Reconciliation effort
• Low Flexibility
• Higher Data Volume
• Performance issues
Physical Data
Virtual HANA views
Reports
Reports
Reports
Profitability Analysis
(COPA)
Documents
Data
Warehouse
Simple Finance on HANA
52
Central Journal
• Finance data is copied from source systems
onto a Central Journal instance. Source
systems can remain in place and continue
with local transaction processing.
• Real-time harmonized global financial
information on a HANA platform with atomic
detail, allowing flexible reporting using robust
reporting tools
• Single Uniform Global Data Model for external
(FI), internal (CO), and Profitability/Market
Segment (COPA) accounting
• No reconciliation across instances
• Central Journal is an adoption scenario that enables implementing Simple Finance with
minimum disruption to existing systems
• It provides real-time replication of financial information from diverse instances that are
harmonized into a Central Journal
• Can provide consolidated financial and management reporting, central process execution and
transaction, planning, consolidation, and reporting based on the same (single source of truth)
data set
Consolidation Reporting
SAP ERP
6.0
SAP ERP
6.0
SAP R3 4.6
Non-
SAP
Central Journal SAP Instance with
Simple Finance
53
What We’ll Cover
• Intercompany Processes and SAP ERP
• How Can HANA Improve IC Processes?
• Challenges for Implementation
• Leading Practices – Systems, Master Data, Processes, and People
• Wrap-up
54
Project Perspective
• IC processes are frequently an afterthought
• Seen as only an integration issue instead of a process
Integration: Communication or connection between modules
(e.g., account determination for material movements)
Process: Series of connected steps accomplishing a goal (e.g.,
P2P, O2C, R2R)
• IC processes frequently “break” during integration tests or after
go-live
• Create a specific project work stream to deal with
IC processes
• In a phased rollout, think about interim stage
• Give the team the right resources (business and
functional)
55
Interim Stage Challenges
• Projects frequently think in terms of to-be processes of final design
• This works fine with big-bang style implementations, but most Global implementations are phased by business and/or geography
• The Key Decision is whether or not to integrate the IC processes in the interim stage
• Unless the company works with two or more disconnected systems in terms of IC processes, there is a need to link all systems from day one
The design for the interim stage can absorb significant resources from the project team (up to 30% to 40% of work)
To-be might need to be adjusted to work together with the interim design (need for compromise)
The Key Decision is whether or not to integrate the
IC processes in the interim stage
56
Interim Stage Challenges: Integrating All Companies
• In a phased rollout, a design decision to integrate companies that
have not migrated to the new environment into the IC processes
has advantages and disadvantages
• Immediate benefit to IC processes by
implementing leading practices
• Better management reports
• Faster closing
• Alleviates issues with
communications
• Easier transition in future rollouts
• Early work on master data
harmonization
Advantages
• Complexity of implementation
• Consumption of project resources
• Potential issues with differences in
business processes (e.g., transfer
prices, material valuation)
• Need to compromise a few to-be
design decisions
Disadvantages
57
Interim Stage: STO Integration
• Integration can be done through a custom development
(Intercompany Data Transfer)
• Need to customize IC Data Transfer for each IC process
58
What We’ll Cover
• Intercompany Processes and SAP ERP
• How Can HANA Improve IC Processes?
• Challenges for Implementation
• Leading Practices – Systems, Master Data, Processes, and People
• Wrap-up
59
Leading Practices
• Single instance with consistent global template
• Leverage dual posting (Seller AR and Buyer AP)
• Use the matching and reconciliation functionality for AR/AP and GR/IR
• Use ERP (SAP In-House Cash) netting functionality
• SAP ERP 6.0 since Enhancement Pack 5 – provides Goods in Transit visibility
• Use workflow and IDocs where possible
• Single point consolidation (avoid sub-consolidation) and leverage a tool (HFM, BPC, etc.)
Systems
Master Data Management and Governance
• Establish a governance policy to manage strategic changes to master data
• Establish master data policies and procedures for change management
• Ensure that all projects that impact systems include master data team participation
• Assign full responsibility of master data to individuals for maintenance
60
Leading Practices (cont.)
• Establish materiality thresholds for posting of IC transactions
• Establish a detailed monthly calendar for IC tasks
• Establish a Dispute Resolution Policy with a Committee that arbitrates disputes
• Establish upfront approvals
• Consider tax needs (provisioning, transfer pricing) when establishing timing of billing
(monthly, quarterly, annual) for corporate pass-downs
• Establish policy on currency for transactions between entities with different currencies
for reconciliation and settlement
• Document and communicate IC policies and procedures
Processes
People
• Centralize IC accounting (where possible), but maintain a single point of contact for IC
transaction inquiries for each company
• Document and train for specific roles and responsibilities, including handoffs
• Train and provide job aids/contact information for all personnel involved in IC
transactions
• Document review/approval/escalation points for IC transactions
61
What We’ll Cover
• Intercompany Processes and SAP ERP
• How Can HANA Improve IC Processes?
• Challenges for Implementation
• Leading Practices – Systems, Master Data, Processes, and People
• Wrap-up
62
Where to Find More Information
• SAP Financials 2015 presentations
Sanjeev Walia, “Key Design Considerations for Legal and
Group Valuation in SAP’s Material Ledger” (Las Vegas, 2015).
Genco Odevci, “I Implemented SAP Financial Closing Cockpit
in SAP ERP 6.0: Now What?” (Las Vegas, 2015).
• Prem Ramlal, “Manage Cash Flows and Reduce Bank Costs with
an Integrated Treasury System” (SAP Financials 2014, Orlando).
• Financials Expert (http://sapexperts.wispubs.com/Financials)
Janet Salmon, “Calculate Actual Costs Across Multiple
Company Codes Using a New Business Function in SAP
Enhancement Package 5 for SAP ERP 6.0” (Financials Expert,
December 2010).
63
7 Key Points to Take Home
• Consider IC processes as a project work stream
• Automate transactions and postings across company codes
• Use a formal process of Dispute Resolution to avoid interruptions
in the IC processes
• Standardize IC processes and manage the necessary change to
accomplish them
• Review policies to support the implementation of leading
practices
• Do not forget about the interim stage with a phased rollout
• Be bold – You will live with the system for the next 15 years!
64
Your Turn!
How to contact me:
David Cohen
Please remember to complete your session evaluation
65
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