Ventana Research defines intercompany financial management (IFM) as a discipline for structuring and handling transactions within a corporation and between its legal entities that is designed to maximize staff efficiency and accounting accuracy while also optimizing tax exposure, minimizing tax leakage, and ensuring consistent tax and regulatory compliance. Better execution of IFM can have a meaningful impact on the bottom line, improve financial control, and reduce reputational and other risks. Yet few senior executives are aware that common but unobserved gaps in financial systems, communications and coordination within their organization pose challenges to IFM. Through our efforts to call attention to the issue, Ventana Research asserts that by 2025, one-half of organizations with 10,000 or more employees will have implemented IFM to achieve tax, risk management and financial close benefits.
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