Corporations need to automate intercompany pricing in the ERP systems to efficiently implement transfer pricing and customs valuation policies and mitigate compliance risks.
This requires the translation of aggregate intercompany pricing policies into a set of transaction-level pricing rules, which can be a complex exercise for businesses characterized by (i) thousands of product SKUs with widely different profit margins by product, (ii) multiple sources of products with differing cost-structures, (iii) multiple sales channels, or (iv) multiple customer segments with varying degrees of price discrimination.
CRA experts have designed and embedded intercompany pricing logic into clients’ ERP systems to automate transfer pricing at the SKU level. Such automation has generated significant operational transfer pricing efficiencies by reducing the necessity of large post-transaction income adjustments and the tracing of such adjustments to specific counterparties and transactions/products, as well as reducing compliance costs associated with customs duties and VAT.
