Published on the 14/09/2015 | Written by Beverley Head

Financial software company BlackLine is readying a new version of its intercompany hub software to better support global organisations’ transfer pricing arrangements…

Transfer pricing has been a hot topic in Australia with the Government and Tax Office going after multinational companies which use transfer pricing arrangements to leverage their global networks, and record most profits in low taxing nations.

While most of these arrangements are entirely legal, they are politically uncomfortable with multinationals often booking profits overseas leaving them with a low Australian tax bill.

BlackLine is now readying a new version of its intercompany hub software that will allow companies to further finesse their use of transfer pricing structures.

Speaking at the company’s Asia Pacific User Group meeting in Melbourne last week, the company’s CEO Therese Tucker said that at present most companies were hard pressed to access and explain their transfer pricing agreements or determine whether they were up to date.

She said that the new version of the inter company hub would allow companies to attach the transfer pricing agreements to their financial management platform as part of a push to deliver “A very fine level of granularity and control.”

In the future Tucker said; “We are heading towards allowing flow to optimise for taxes and currencies.”

Currently being trialled by two organisations including global agricultural and construction equipment manufacturer CNH, the new version of the intercompany hub is scheduled to go live in November.

First introduced in late 2014, the new version of the software can define and manage entity to entity business and financial relationships, intermediaries, and also use a rules-based structure to allocate and manage responsibilities.

Once complete the solution will also automate inter-company reconciliation.

Tucker said BlackLine was also working on a settlement process that would allow a range of settlement options to be harnessed by global enterprises rather than just bilateral netting which could be expensive.

She said that it might be possible in the future to offer a solution which offered multilateral netting between related entities which would allow organisations “to optimise your fees in a big way.”

She acknowledged that the settlement issue had proved a “bit more gnarly” to automate and would be likely released later in the year.

The author attended the user group meeting as a guest of BlackLine