Reduce risk, improve transparency, automate processes, and maintain a repeatable process for both goods and services.

Immediate benefits

  • View a full P&L across any segment including to the SKU level
  • Profit monitoring using any of the five OECD approved methods
  • Visualize YTD targets and see necessary adjustments for hitting end-of-year targets
  • Reduce risk and improve transparency
  • Allocate overhead costs using simple to complex cost modeling processes
  • Forecast year-end adjustments and pricing changes to hit end-of-year targets
  • Automated template driven repeatable process that reduces effort and time for analysis and changes
  • Complete audit trail including tracing charges through multiple transfers, consolidations, and trade zones
  • Account for inventory runout when calculating cost basis for goods

What you can do

  • Customize how the business is segmented and defined by any number of dimensions
  • Adjust targets throughout the year if needed
  • Set automated price change thresholds while allowing for manual price change reviews and adjustments
  • Leverage out-of-the box reporting and processes while retaining ability for extensive bespoke operations when necessary

Services invoicing to a new level

  • Book 100% balanced AR/AP intercompany services invoices with full matching by default
  • Calculate VAT, GST, Withholding tax, and local taxes on a invoice line item basis
  • Incorporate complex local tax logic for how taxes are calculated with markups
  • Coordinate invoicing across a global heterogenous ERP and offline entity environment
  • Centrally manage and monitor services billing
  • Ensure order of operations is followed for the close schedule including days, intra-day timing, and charge dependencies
  • Allow partial bill out of accounts and cost centers along with allocation driven charges to multiple entities

Transfer Pricing

With the ever increasing Base Erosion and Profit Shifting (BEPS) scrutiny the OECD is spotlighting, tax authorities have increased their sophistication and enforcement of tax compliance. While the intent of transfer pricing is to approximate the true cost of goods and services in each tax jurisdiction, a major theme today is ensuring tax compliance across an often complex set of legal entity routings.

Large end-of-year adjustments have become a red flag and are receiving heightened scrutiny. This can leave substantial amounts of money unrecoverable in tariffs, duties, or higher tax jurisdictions, not to mention the potentially high cost of enforcement actions. Because of this, tax compliance cannot just be about designing an optimal transfer pricing process, it must also measure it in real-time so monthly adjustments can be made in order to hit the targets.

PlaidCloud helps to ensure the designed transfer pricing and intercompany invoicing process is being followed and that adjustments are made throughout the year in a transparent and auditable manner. Applying markups, withholding, VAT, calculating royalty payments, and other critical information is simply part of the controlled process rather than being left as an offline processes which are often over simplified, highly manual, and a significant audit focus. PlaidCloud supports the five approved OECD methods:

  • Resale Price Method (Revenue minus)
  • Cost Plus Method (Cost plus)
  • Transactional Net Margin Method (TNMM)
  • Transaction Profit Split Method (TPS)
  • Comparable Uncontrolled Price Method (CUP)

Detailed intercompany invoicing is an essential element to a successful transfer pricing process as it provides direct evidence that all tax laws are followed and payments for goods and services are arms-length transactions that apply withholding, VAT, GST, local, regional, and surtaxes properly. Production of high quality invoices that comply with country specific language and required elements can be challenging when operated in a decentralized manner. Fully automated invoicing with your system of record (e.g. SAP, Oracle, etc…) ensures full traceability and defensible compliance during tax audits.

PlaidCloud supports multi-layer and sequenced billing scenarios with configurable markups at each leg of the process. In addition, PlaidCloud’s optional integration with SAP allows direct sourcing of financial information for billing including postings for sequenced billing scenarios. Sourcing of information and postings can span multiple SAP instances located throughout the world.

Due to the timing of global operations, their may be a need for accruals after intercompany invoicing completes. PlaidCloud can calculate and post accruals automatically too.

PlaidCloud supports transfer pricing and intercompany invoicing processes at companies with billions of dollars moving between tax jurisdictions for both services and tangible goods.

PlaidCloud is a HANA certified solution so it can also run on-prem or in a private cloud with S/4 HANA. Since PlaidCloud can operate with many different systems simultaneously, a robust transfer pricing process can be established even during ERP system transitions.