CFOtech Australia - Technology news for CFOs & financial decision-makers
Story image
BlackLine launches Intercompany tool to optimise tax compliance & filing
Thu, 30th Nov 2023

BlackLine, Inc., a leader in digital finance transformation, has announced the launch of BlackLine Intercompany, an innovative solution intended to aid companies in their tax defensibility and maximise regulatory compliance. This is achieved by harmonising and unifying data across multiple ERPs, thereby reducing tax filing time and effort along with overall close cycles.

Breaking new ground, this offering from BlackLine Intercompany is the industry's first to address both trade and non-trade transactions. This powerful tool aims at maximising tax defensibility and increasing regulatory compliance, in a time when global minimal taxes and e-invoicing are increasingly pertinent issues.

Intercompany financing remains one of the most complex areas of finance, with intercompany transfers estimated by Grant Thornton, a tax and advisory firm, to constitute between 30 to 40 percent of the global economy, or an immense US $40 to US $60 trillion annually. For large enterprises, these transactions can even attain a value up to 10 times a company’s reported revenue.

Lack of visibility over crucial transactional details, such as price, quantity, and legal entity information, can result in downstream issues, such as tax filing challenges, closing delays, and potential write-offs and restatements. The BlackLine Intercompany solution tackles these hurdles by offering a clear view of all transactions, ensuring correct taxes are applied across entities and geographies.

Commenting on the effectiveness of the solution, Kivanc Pakel, head of intercompany operations at BlackLine, stated, "Case studies show that our customers have reduced tax leakage by as much as $500 million and direct taxes by up to 25%, with some cutting their overall close cycle in half."

Furthermore, this new product enhancement allows BlackLine Intercompany to be the sole solution that can manage both trade and non-trade transactions optimised for multi-ERP environments. The new functionality aids multinational organisations immensely, offering improved transfer pricing policy adherence and increased tax defensibility.

Reflecting on the innovative features BlackLine brings, Robert Kugel, executive director at ISG-Ventana Research, said, "BlackLine is once again bringing industry-first technology and expertise to complex intercompany operations to enable companies to manage this complex business process proactively and effectively."

The newly included trade management capabilities aid customers by fostering interdepartmental collaboration via centralised data and workflow, increasing transfer pricing visibility through billing route configurations, enhancing tax defensibility through validation of sales orders and invoices, and promoting informed decision-making through exception reporting.

According to Pakel, "As one of the top causes of financial restatements, addressing and minimising intercompany transaction errors is critical for organisations to ensure a sound control environment." The resulting benefits for businesses are manifold, ranging from reduced time spent reconciling, leading to a quicker close, fewer write-offs for increased profitability, and improved transfer pricing policy adherence and tax defensibility for regulatory compliance.

The new trade management capabilities are included in BlackLine Intercompany Create solution, part of its portfolio of Intercompany Financial Management offerings. With over 4,300 customers trusting BlackLine to assist them in closing faster with complete and accurate results, the company continues to be a pioneer in enabling digital finance transformations for large enterprises and midsize businesses.