Intercompany transactions are an unavoidable part of large, multi-entity organisations yet they’re often overlooked. Their complexity, internal nature and lack of visibility can mean they’re put on the backburner in favour of more visible customer and supplier operations.

“In other words, they often end up in the too-hard basket,” says Mike Goldsworthy, intercompany strategy Asia Pacific and Japan at BlackLine.

One of the biggest challenges, he explains, is the lack of clear ownership.

“While intercompany operations technically sit within finance, they also touch logistics, supply chain, legal and tax. There is no single owner and because they involve internal transactions between related parties, they’re often deprioritised compared with external-facing activities,” says Goldsworthy.

Yet this mix of scale, complexity and limited visibility makes intercompany operations ripe for optimisation, and ignoring them can have serious consequences.

“There are underlying risks many organisations aren’t even aware of, including inefficiencies, compliance gaps and cash flow issues,” Goldsworthy adds.

With the right approach and structure, intercompany operations can help organisations respond faster to market changes, scale globally with confidence and make better use of internal capital.

Why prioritise intercompany processes

Two good reasons to prioritise intercompany processes are risk mitigation, particularly avoiding costly material weaknesses and value creation through operational efficiency and improved capital management, says Goldsworthy.

“One of the reasons intercompany should be a priority is that various studies suggest seven out of 10 global transactions occur between related parties. When these transactions are left unsettled, it results in trapped liquidity – cash that remains locked within the organisation instead of being used strategically,” he says.

Additionally, in today’s environment of rising interest rates and increasingly costly external funding, organisations with poor intercompany discipline are penalised twice: once by operational inefficiency and again by avoidable financing needs, Goldsworthy adds.

One way to tackle these challenges is by automating compliance processes, reducing manual effort and improving accuracy and transparency.

“For example, the BlackLine intercompany platform standardises workflows and preserves critical institutional knowledge,” he says. “It helps finance teams strengthen internal controls, reduce risk and support consistent, scalable growth, potentially avoiding costly errors and material weaknesses.” 

Specific regional hurdles

While the issues facing the APAC region are not materially different from those elsewhere, some regional characteristics create unique challenges for intercompany governance.

“In APAC, organisations frequently cross jurisdictional boundaries, for instance, a product manufactured in China and sold in Australia. This means that they can’t rely on a singular set of accounting rules but need to be aware of the tax and statutory requirements in a multitude of different jurisdictions,” he says.

Sudden shifts driven by global events or changes in manufacturing costs further complicate operations. At the same time, region-specific rules demand careful compliance planning, and jurisdictional differences in accounting for joint ventures, eliminations and related-party transactions add another layer.

Transfer pricing is also a growing concern. As inflation impacts manufacturing and supply chain costs, tax authorities are paying closer attention to how goods and services are priced across borders.

Despite these challenges, intercompany should be viewed as a strategic lever, says Goldsworthy.

“With the right structure, governance and technology, it becomes a powerful enabler of efficiency, resilience and long-term value creation,” he says.

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