SAP at Accenture

Implementing SAP Intercompany billing drives high performance

Business challenge
Accenture provides consulting and outsourcing services in more than 300 legal entities that span more than 75 countries. It increasingly relies 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 its projects and commercial arrangements.

What Accenture did

In the early 2000s, Accenture operated a custom solution to manage internal financials. Intercompany invoices were processed in batch at the end of each month, and processes were not optimized to settle the invoices on a timely basis. In the ensuing years, to support its strategic growth objective, Accenture made the decision to implement a single, global enterprise resource planning (ERP) system on SAP. The intercompany billing capability in SAP was one of the drivers behind Accentures ERP system selection, and the intercompany billing functionality that was deployed represents one of the value drivers for the ERP implementation project. A key success factor for the project, states Dan Kirner, Accenture managing directorInternal IT Applications, was that Accenture had an exceptional level of interaction, partnership and ownership between the CIO 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.

At the core of Accentures intercompany billing solution are standard SAP components Dynamic Item Processor, SDResource Related Billing, Pricing Procedures and Conditions and Material Master. Although the guiding principle was to use standard SAP functionality as much as possible, minor customization was required in order to accommodate the scale and complexity of Accentures business. 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. Accentures 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, Accenture implemented custom intercompany billing solutions for royalties, central training, cost sharing and share-based compensation. These custom systems source information that is maintained outside of SAP, create intercompany billing journals and interface them into SAP where they are invoiced and settled. For example, the Cost Sharing application enables Accenture Tax to define pools of internal costs, including detailed narrative describing the cost pool and the base on which the cost pool should be distributed among legal entities.

The true value of Accentures intercompany solution, notes Jamie Shachoy, Accenture Global Tax Managing Director, was born out of aligning process and technology to support tax strategy. The result is an IT solution that is compatible with Accentures legal agreements. This capability allows automated intercompany billing and eliminates the need to negotiate pricing between countries for each internal activity or client engagement. Accenture deployed the SAP Treasury module, which brought Accenture onto a single treasury system. As part of this effort, Accenture automated the settlement of intercompany invoices through the use of in-house banking. Because intercompany billing customization was minimal at the outset, compatibility among the standard SAP modules was maintained, enabling the settlement process to occur easily and smoothly. Addtionally, Accenture enhanced their corporate forecasting system to include Income Before Tax by legal entity. This enabled forecasting intercompany revenue and expense geographically across the management organizations. Today, Accenture has an automated, robust and stable intercompany solution that has grown with the business and has been flexible enough to accommodate change. Penny Bessman, Accenture Geographic Tax and Reporting Lead and Doug Andor, senior managerAccenture Financial Applications agree that Several factors contributed to the successful deployment of Accentures Intercompany solution. Among these were Accentures deep skills in delivering SAP solutions, expert functional knowledge, rigorous solution delivery methodology and a strong partnership between the Accounting and IT organizations.

High performance delivered

Accenture relies on its ERP system to successfully operate and manage its business, and ultimately deliver high performance. It places strategic value on a single source of the truth through its global, single SAP instance. The implementation of SAP Intercompany and Treasury has delivered numerous benefits. Accenture has automated the endto-end intercompany process from billing through settlement and has put in place industry-leading intercompany processes. Accentures intercompany solution creates intercompany invoices daily, for each days activity. Through end-to-end automation and process improvement, Accenture is able to reconcile all intercompany accounts at the trading partner level and resolve elimination errors before the end of the month, preventing delays in the monthly close process. 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 Accentures 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. As a result of the investment in intercompany solutions and processes, Accenture has been able to scale the business dramatically, without scaling the support organization.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with approximately 275,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the worlds most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com.

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