Operational Transfer Pricing and SAP: insights into EXA’s standard software for IT, finance, and TP managers

Explore the opportunities now available to achieve automated segmentation, forecasting, and price-setting. When an SAP S/4HANA migration is planned, is in progress, or has already finished, why should there be a need for an additional tool for operational transfer pricing (OTP)? Today, TP is more than maintaining condition records; it is about global tax and compliance. It begins with profitability checks by segmenting a legal entity’s P&L statements by transaction group, transaction partner, and TP function to test them against benchmarks. Complex conversion rules are required to enrich millions of ERP records with TP-specific attributes, plus multi-level cost allocations. Calculating and updating transfer prices at the product level adds complexity, as TP methods must be applied. Finally, forecast and customs duties data for simulations are the basis to obtain optimal transfer prices during the year, avoiding year-end adjustments. ERP systems do not deliver such very specific functionalities, so MNEs must decide whether to continue with manual spreadsheets, build or buy an OTP solution, or develop their own OTP applications. ITR will be discussing this dilemma with Dr Frank Schoeneborn, the global head of EXA’s Operational Transfer Pricing software program. The webinar will cover the following aspects: • Beyond condition records – the TP life cycle runs from segmentation to forecasting and dynamic price-setting to final year-end adjustments. • OTP requirements – OTP consists of a full P&L breakdown by transaction group, transaction partner, and TP function performed by the individual entity. • Forecasting, simulations, and price-setting – the webinar will consider how to avoid large year-end adjustments. • Transfer price and customs value – the alignment of TP with customs can justify an investment in an OTP solution. • OTP enterprise-grade software in action – a demonstration of EXA’s solution, which can be integrated into your SAP ERP and/or S/4HANA.