Your automated tool for managing intercompany transactions
Globally operating groups in particular face a variety of challenges when it comes to reconciling intra-group transactions.
Legal requirements stipulate that intra-group activities must be reconciled and eliminated in the consolidated financial statements.
A key hurdle is often the lack of transparency of business transactions between the legal companies and subsidiaries.
For many companies, this leads to very labor-intensive and therefore time-consuming reconciliation, which can lead to considerable delays in the preparation of the financial statements.
In addition, it is becoming increasingly difficult to carry out the reconciliation in a cost-efficient manner.
Motivation to switch to an automated solution
The increase in data quality
Data security
Higher degree of automation throughout the entire process
Linking and sharing for management reporting
Dealing with new requirements
Flexible reporting options
The lack of a group-wide process for reconciling intra-group transactions increases the reconciliation effort.
The various reconciliation solutions may not be compatible with each other.
Overloaded and opaque Excel files are often used for reconciliation and differences are then clarified via email.
The group companies may also work with different ERP systems, which do not record all the necessary information for intercompany reconciliation.
This and non-standardized communication channels make the reconciliation process time-consuming and cost-intensive.
Differing accounting standards and different financial year periods also make reconciliation more difficult.
Uniform reporting may also not be guaranteed.
If the reconciliation is carried out by a group intercompany team, this can also result in a time-consuming exchange between the group accountants and those of the individual companies, as the central team cannot explain and resolve the differences.
The ICMR is designed to minimize precisely these difficulties.
It is a central reconciliation tool that SAP and non-SAP companies can use to reconcile their transactions.
It offers standardized communication channels, automated reconciliations and adjustment postings, workflow and reporting options.
The trading partners can exchange information quickly.
The ICMR enables differences to be identified at an early stage, so IC reconciliation can be started during the preparation of individual financial statements .
Integrated in SAP S/4HANA
The ICMR is integrated as an out-of-box solution in SAP S/4HANA Finance for Group Reporting and has been available in Group Reporting On-Premise since release 1909 and in the Group Reporting Cloud since release 1908.
The ICMR solution is available with Group Reporting as standard, so there are no additional license costs for the tool.
The financial data is reconciled in real time without ETL processes (extraction, transformation and loading processes).
An ETL process is the process in data processing in which data is extracted from various sources, transformed and then loaded into a target system or database.
The ICMR process differs in that data collection, reconciliation, corrections and documentation are handled in SAP S/4HANA.
The matching engine can read the data directly from the source database tables (ACDOCA, ACDOCU and ICADOCM).
Reconciliation at the level of the separate and consolidated financial statements
By integrating data from several sources, the effort required to obtain data can be reduced.
The ICMR can access the ACDOCA accounting database table, the BSEG table (accounting line items) and the ACDOCU consolidation database table as data sources .
The data sources can be accessed in real time.
Changed data can be viewed immediately during reconciliation.
However, it is also possible to create a stable data status via a time stamp.
The data must be available in SAP S/HANA for reconciliation.
If companies are not integrated in SAP S/4HANA, the data can be replicated via Central Finance, brought into SAP S/4HANA via API interface or via file upload.
The file upload (CSV file) of the IC transactions is carried out via the Fiori app ” Flexible upload of matching” in the matching engine (ICADOCM).
Legal requirements
The ICMR tool can be used to ensure compliance with legal requirements.
It documents the intercompany transactions and shows the transaction differences.
According to IFRS and HGB accounting standards, intercompany transactions, balances and transaction differences that occur during intercompany reconciliation must be reported and treated correctly.
This arises from the fact that companies must provide a complete, accurate and transparent presentation of their financial position and performance (IFRS: IAS 1 (Presentation of Financial Statements) & IFRS 10 (Consolidated Financial Statements) and HGB: § Section 264 HGB (Obligation to prepare consolidated financial statements) & Section 297 HGB (Group management report)).
The exact obligations in connection with ICMR, IFRS and HGB may vary depending on the company, industry and individual circumstances.
Automatic document reconciliation
Coordination on the basis of individual rules
Automatic adjustment of differences
Workflow scenarios
Integrated Group accounting
Matching options through the matching engine
Data reconciliation is based on individual matching rules and reconciliation cases, which enables efficient automated filtering of internal transactions.
The dimensions to be reconciled can be customized using various functions.
For example, the reverse transaction currency amount can be reconciled within a tolerance.
Efficient communication
In-app communication
The approval or rejection of an automatic variance adjustment is carried out using the Approve reconciliation completion requests – Inbox app.
This app can also be used to view details of the reconciliation.
When the approval request is sent to a team, a team member can reserve it for processing or assign it to a specific user role.
E-mail traffic
If there is a need to clarify IC differences, it is possible to send an e-mail from the ICMR solution to the IC partner, for example.
The booking document information contained in the e-mail can be controlled via templates.
Notes
To facilitate the clarification of differences, notes can be attached to the documents to be reconciled in the ICMR solution.
Notifications
To facilitate the clarification of differences, notes can be attached to the documents to be reconciled in the ICMR solution.
Group accounting
A new form of elimination measure has been integrated into the ICMR solution.
This is no longer based on a reclassification method, but on automatic posting rules.
The new elimination measure can split the differences into transaction differences, currency translation differences and other differences.
The ICMR solution thus supports the entire reconciliation process up to intercompany elimination.
Focus on strategic management
- Reasons for differences to eliminate the discrepancies
- Reporting: Group companies can view the status of the reconciliation
- Disclosure of transaction, currency translation and other differences
Acceleration of the IC coordination process
- Real-time reconciliation, resulting in more frequent and earlier reconciliation in the consolidated financial statement process
- Automation leads to time and cost savings and ensures that requirements are met
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