A $5B Leading Global Coatings Company Success Story
For most organizations, managing legal entity profitability and operational transfer pricing is a complex challenge. And for one global company, this challenge was exacerbated by an impending SAP ECC to SAP S4 migration. This transition would take several years to complete.
The company overcame these hurdles and transformed their financial operations with the help of PlaidCloud.
The Challenge: A Multifaceted Problem Needing a Complete Solution
The company’s process was collapsing under its weight. The urgency for a solution was evident. Teams of analysts struggled with countless spreadsheets containing millions of data records. This not only exposed the organization to significant risks but also proved to be unsustainable.
- A Need for Comprehensive Legal Entity Profitability Analysis: The client required a complete analytic tool to monitor and analyze legal entity profitability across various dimensions and measures, including those necessary for tax purposes. This encompassed manufacturing, distribution, intermediates, and more.
- Lack Of Operational Transfer Pricing Management: The application also needed to handle the administration of operational transfer pricing, which included price setting, review, calculation, revision, and associated GL entries.
- Migration Complications: The imminent SAP ECC to SAP S4 migration was adding complexity to the situation. The solution had to remain flexible and adapt to changes in cost centers and company codes during this multiyear migration.
An automated solution wasn’t nice to have, it was an absolute necessity.
The Solution: Convert To a Robust & Automated Solution
The company turned to PlaidCloud, a renowned financial analytic engine with a best-in-class operational pricing solution. PlaidCloud tackled this organization’s complex challenge head-on.
- Data Integration & Harmonization: PlaidCloud’s strength lies in its ability to consume data from any system, in any format, and harmonize it seamlessly. This made reporting effortless and ensured a smooth transition from SAP ECC to SAP S4 without manual data manipulation.
- Flexible Allocation Models: Unlike other technologies, PlaidCloud’s point-and-click functionality allowed for easy updates to allocation models once data migrated to SAP S4. This flexibility saved valuable time and resources.
The Results: Experiencing The Transformative Power of Technology
The benefits of this transformation are significant and transformative, including unified reporting, multi-currency capabilities, and the ability to optimize margins and pricing strategies.
- Unified Ledger: They achieved the goal of having one clean monthly ledger feed and consolidating data from various inputs including ERP systems and localized transactions for different countries. This unified ledger was previously challenging to obtain within the ERP.
- Multi-Currency Reporting: PlaidCloud empowered the client to report in multiple currencies on the same ledger. This facilitated global financial analysis.
- Margin Optimization: The company gained insights in areas that could enhance margins to increase profits. They also identified their biggest cost drivers that allowed for informed decision-making.
- Categorized Sales: Vital for margin calculations, the new system categorized sales by function – distinguishing entities that resold products from those that manufactured them.
- Full Traceability & Auditability: PlaidCloud provided full traceability. This enabled the company to examine margins by product, function, and entity across the organization. This transparency proved invaluable for audit and compliance purposes.
- Early Transfer Price Adjustments: The company could now make material transfer price adjustments early in the year. This prevents last-minute surprises and unnecessary tax overpayments.
This success story showcases the power of technology-driven solutions in solving complex financial challenges. PlaidCloud not only streamlined legal entity profitability analysis, but also facilitated a seamless transition during a critical ERP migration. With PlaidCloud, this company survived and thrived in a challenging financial landscape. Their stage is now set for future growth and success. Want to learn more? Start with a conversation. Contact PlaidCloud today >