Intercompany Netting and Invoice Reconciliation

Centralize FX risk, reduce transaction volume and minimize disputes

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Only the extremely wealthy can afford to operate without netting

If your subsidiaries engage in intercompany business and you are not netting your AP/AR, you are throwing your money away.

Not only do bank fees and FX deals from multiple accounts cost you over and over and over again, but the process of reconciling millions or billions of dollars’ worth of transactions eats away at available man-hours. By confirming all invoices before they get settled in the netting center, tm5 structures your intercompany business, combining multiple transactions into a single balance per subsidiary. This leads to improved efficiency in hedging and simplifies your cash management. There will be fewer FX swaps, less FX risk, and a drastic reduction in workload for all participating parties.

This makes multilateral netting one of the easiest ways to become a corporate hero.

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How netting in tm5 is unique

Agreement-driven netting

Do you still come across intercompany invoices that were issued years ago but never settled due to a disagreement? Maybe in currencies which no longer exist? Finally clear these positions thanks to the structured and automated dispute process of tm5, giving you the best of both payables- and receivables-driven processes.

Virtual netting

Not all countries allow netting, but your subsidiaries within them should still be fully integrated into your reconciliation process. With virtual netting, the invoices of these subsidiaries are not netted, but their invoices and receipts are still matched, and disputes processed through the agreement workflow.

Intercompany balance reconciliation

Use tm5’s automated reconciliation process for all balances between your subsidiaries. Our system automatically matches balances, and highlights discrepancies between companies, making reconciliation a structured, efficient process.

Advantages of multilateral netting and invoice
reconciliation in tm5

  • Decrease the total number of intercompany transactions and limit netting settlement to one currency per company.
  • Drastically reduce the workload within the process of intercompany reconciliation.
  • Manage disagreements in connection with outstanding intercompany invoices directly in the system.
  • Centralize funding and FX risk to where it can be handled best: central treasury.
  • Gain a view of your entire intercompany trade flows, and their evolution over time.

Interested in learning more about multilateral netting and invoice reconciliation?

Speak with one of our experienced solution experts to better understand how BELLIN can help solve the unique challenges of your business.

Just a few of the 500+ companies we work with

Additional Resources

Netting White paper
White Papers
White Paper - Mitigating Costs and Exposure with Multilateral Netting

An immersive look into multilateral netting by dissecting the steps to establishing baseline protocol for implementation, the associated benefits and potential hurdles to ponder.

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Fact Sheet Netting MockUp
Fact Sheets
Fact Sheet: Intercompany Netting and Reconciliation for Global Corporations

This intercompany netting fact sheet highlights key challenges for global corporations with intercompany invoicing, as well as essential solutions.

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Netting in Finance: An Immersive Guide to Global Reconciliation Preview Image
Blog
Netting in Finance: An Immersive Guide to Global Reconciliation

This is an immersive guide to netting in finance, which is the process of reconciling and off-setting intercompany invoices between two parties.

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