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CLIENT CASE STUDY

SAP intercompany billing at Accenture

Accenture's intercompany billing solution scales with Accenture's growth

Overview

When Accenture decided to implement a single, global enterprise resource planning (ERP) system on SAP, the intercompany billing capability in SAP was one of the drivers behind its selection. Our internal IT organization worked closely with our Tax, Controllership, Treasury, and Client Accounting functions to develop a comprehensive design of the solution, and subsequently its build and deployment.

At the core of our intercompany billing solution are standard SAP components. Although the guiding principle was to use standard SAP functionality as much as possible, minor customization was needed in order to accommodate the scale and complexity of Accenture’s business.

The true value of the intercompany solution comes from aligning process and technology to support Accenture’s tax strategy, resulting in a solution that is compatible with Accenture’s legal agreements. This capability allows automated intercompany billing and eliminates the need to negotiate pricing between countries for each internal activity or client engagement, among many other benefits.

Today, Accenture has an automated, robust and stable intercompany solution that has grown with the business and has been flexible enough to accommodate change as Accenture’s business changes.

Opportunity

Accenture provides consulting and outsourcing services in more than 300 legal entities that span more than 75 countries. We increasingly rely upon a global workforce model to provide these services, which results in a substantial increase in intercompany activity. In fiscal year 2012, Accenture billed $20 billion of intercompany activity that represented a 75 percent increase over a five-year time frame. The complexity of the business has increased both in terms of the scope of products and services that Accenture provides to clients and the global nature of our projects and commercial arrangements.

Solution

The intercompany billing capability in SAP was one of the drivers behind Accenture’s ERP system selection, and the intercompany billing functionality that we deployed represented one of the value drivers for the ERP implementation project. A key success factor for the project was that Accenture had an exceptional level of interaction, partnership and ownership between the internal IT organization, and the Tax, Controllership, Treasury, and Client Accounting functions, to develop a comprehensive design of the solution. With a heavy focus on the business processes and internal controls to support the business strategy, the design and build of the solution complemented these strategic efforts.

The resulting intercompany solution reads SAP financial postings and identifies intercompany activity based on the nature of the transaction and entities charged. It automatically creates intercompany receivables, payables and the associated intercompany revenue and expense postings. Our intercompany solution properly records invoicing and settlement activity in both functional and global currency, thereby leveraging standard SAP functionality to record foreign currency gain/loss.

In addition to SAP, we implemented custom intercompany billing solutions for royalties, central training, cost sharing and share-based compensation. These custom systems source information that is maintained outside SAP, create intercompany billing journals and interface them into SAP where they are invoiced and settled.

As follow-on initiatives, we deployed the SAP Treasury module, which brought Accenture onto a single treasury system. Additionally, we enhanced Accenture’s corporate forecasting system to enable forecasting intercompany revenue and expense geographically across the management organizations.

Results

The implementation of SAP Intercompany and Treasury delivered numerous benefits. Chief among them is that Accenture has automated the end-to-end intercompany process from billing through settlement and has put in place industry-leading intercompany processes. Reconciled intercompany accounts in combination with the SAP Treasury module have enabled automated settlement of intercompany invoices within 10 days of the month-end close, which represents a 35-day improvement since 2001. Accelerated settlement substantially mitigates Accenture’s foreign currency risk.

Additionally, the combination of robust document traceability, detailed reporting and standardized transfer pricing provide the necessary support for financial statement, tax return and regulatory audits. Other overall benefits include having real-time reconciliation across all time zones as well as having consistent data and processes in every country due to the single SAP instance.