BlackLine Blog

December 18, 2023

Building the Case for Better Intercompany

Modern Accounting
2 Minute Read

Hilary O'Brien

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Finding Success in Intercompany

In the complex web of multinational operations, the call for Intercompany Financial Management (IFM)—the process and technological approach to handling intercompany transactions—is growing louder. By embracing IFM, companies are not just streamlining processes; they're unlocking operational efficiencies that translate into substantial time and cost savings.

Despite these benefits, many multinational organizations are hesitant to adopt these strategies, relying instead on patchwork solutions that address only the symptoms of intercompany ailments—like persistent imbalances and tax inefficiencies—without curing the underlying condition.

Still, the need for change is apparent. Much like a patient ignoring a doctor's advice to make different lifestyle choices, companies that overlook the need for holistic intercompany optimization will face escalating problems, from dwindling profitability to compliance pitfalls.

To help your organization succeed in intercompany, a solid business case will guide the path forward and ensure that all parties involved are aligned. You know that CFO buy-in is critical for success, but where do you begin?

Making the Case to Finance Leaders

Convincing your CFO to invest in intercompany optimization is no easy task. It requires a compelling narrative, one that resonates with their executive vision while aligning with the company's strategic goals. Here's what’s needed to build a persuasive business case:

1) Define Strategic Objectives: Approach intercompany operations from a high-level perspective. Tie the project to defined metrics and results.

2) Perform an Assessment: Take a current state assessment of the business. Provide clear ROI data that outlines current costs and demonstrates how optimization can lead to significant savings and risk reduction.

3) Strategic Alignment: Ensure your proposal complements the company's broader strategies and fits within the annual budget, highlighting its relevance and urgency.

4) Engage Stakeholders: Collaborate with departments like Tax and Treasury to present a unified front, showcasing the enterprise-wide benefits of optimization.

While these steps are essential, it’s equally as important to identify and address the specific value drivers that are integral to the company's strategic objectives. Demonstrating how intercompany optimization adds value will help your business case rise to the top of consideration.

Value Drivers at the Heart of Intercompany Optimization

When advocating for intercompany optimization, focus on these core value drivers that resonate with finance leaders:

  • Operational Efficiency: Emphasize how process automation and redesign can lead to a more efficient close, free up time and resources, and improve financial integrity.

  • Cost Savings: Detail the direct and indirect cost savings, from reduced FX exposure to lower risk of financial restatements.

  • Talent Retention: Highlight how operational efficiencies can refocus staff on strategic, value-added tasks, crucial in today's competitive labor market.

  • Long-term Sustainability: Showcase the scalability of the solution and its capacity to support growth through mergers, acquisitions, and beyond.

Visualizing the Impact: The Pro and Con List

Change is never easy, but there are clear advantages of embracing modern accounting. A side-by-side comparison vividly illustrates the consequences of inaction versus the benefits of transformation:

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The Longview

For many multinational organizations, the journey toward intercompany optimization begins with a compelling case made to finance leaders—one that makes clear that the business will benefit by shifting the focus from fixing redundant issues to developing sustainable strategies that can steer even the most complex organizations towards financial health and long-term growth.

Learn more about intercompany with this recent global survey that examines the current state of intercompany at multinational businesses. The report captures a wide range of data on the experiences of Finance, Accounting, and other stakeholders with their company’s intercompany processes, from the challenges they face to leadership involvement and the role technology plays in solving intercompany complexity.

About the Author


Hilary O'Brien