Virtual data room is a web-based solution that combines all known tools for working with customers and automating business processes. So, how can this software impact intercompany transactions?

What is the intercompany transaction?

Most modern companies can be represented as a set of separate relatively independent divisions performing certain functions (for example, purchasing resources, manufacturing, sales, administrative and financial support, etc.). Economic relations always arise between these parts of the company, in particular regarding the intra-company turnover of goods, services, or other objects. The form of price as a familiar regulator in a market economy is used in this case as an instrument of intercompany regulation, subordinate, first of all, to solve the problems of the company as a whole.

Intercompany transactions are any type of business transaction that occurs between two or more companies. These companies may have some type of affiliation, such as belonging to the same parent company while maintaining their identity, or there may be a buyer/supplier relationship between them. Activities of this type should not be confused with intercompany transactions, which involve the execution of tasks between two or more units that are part of the same operation. 

One of the most common examples of intercompany transactions is the sale of goods or services by a supplier to a customer. For example, a lawn furniture company may strike a deal with a retailer to supply tables, sun loungers, and outdoor loungers to the retailer’s outlets for sale to the general public. Since the transaction is structured in such a way that the retailer buys lawn furniture from a supplier, the transaction involves the need to complete the transaction with the creation of an invoice that is presented upon delivery and with the payment terms that both parties have agreed upon is reasonable.

How to manage intercompany transactions via Data Room?

Intercompany accounting will continue to be a major focus for global organizations. In combination with the ongoing transformation of people and processes, technology can be the solution for companies that currently do not have an efficient intercompany process. The result will be improved controls and lower risk and higher in-house processing efficiency, especially when dealing with multiple financial systems. So, Virtual Data Room is the most suitable technology in this case. 

TheData Room system is designed to automate business processes. It can be applied in different types of companies and completely different areas. The main goal is to minimize operations that require employee participation. In addition, the collection, processing, and accumulation of data to streamline production is also an area of application for the Data Room. In simple words, it is an integrated computer program for managing resources, production, and operations, reducing the need for “manual” actions for the sake of enterprise productivity.

The development of Data Room software has now led to the fact that they are used not only in manufacturing enterprises but also in government agencies, service companies, non-profit organizations. There are the following Data Room advantages that are vital for intercompany transaction management:

  • saving resources;
  • process optimization;
  • data consolidation;
  • customization (individual revision and adjustment);
  • end-to-end business processes;
  • minimizing the risk of errors due to human factors;
  • improving the quality of service and work with clients;
  • an increase in profits in the end.

A single automated Data Room software makes it possible to achieve efficiency in planning and managing all types of resources of large and medium-sized enterprises, regardless of their structure, scale, and territorial distribution of business.