Business case Umicore

Umicore: key information

  • Business sector: materials technology and recycling
  • Listed company: BEL 20
  • Headquarters: Brussels
  • Present in 34 countries
  • 132 consolidation entities
  • 150 users of Intercompany
  • More information: www.umicore.com

The return on investment – in brief

  • Fast close: a significant time savings in the closing process
  • Automation of the process, which results in less manual reconciliation
  • Increased quality of group-level financial information thanks to the presence of dimensions
  • Increased quality of entity-level financial information thanks to the reconciliation at transaction level and at level of business units and business lines
  • Perfect auditability, thanks to the direct link between Intercompany and the consolidation software

The situation

The group Umicore has an active external growth policy and needs to consolidate 132 entities. This leads to:

  • A constant increase in the number of interco transactions (at the end of 2013 there were 185.000 lines of interco transactions on the balance sheet and income statement)
  • A wide range of accounting systems (SAP, local accounting systems, etc.)
  • Different cultures and accounting schemes due to the internationalization of the group

Since 2005 the group had been using a software for the reconciliation of intragroup transactions. However, the application no longer met internal and external reporting requirements in its original form. The Financial Department was looking for a reliable software, expert in its field, who could evolve with the group.

The solution

In 2013, the group launched a call for tenders with leading software providers and ultimately chose Intercompany because it met all requirements of the group:

  • Manage the concepts of business unit and business line
  • Reconcile intercos at transaction level
  • Generate detailed activity reports
  • Do both automatic and semi-automatic reconciliations
  • Adjust to group needs
  • Software that is easy to implement and easy to use

Intercompany was selected in September 2013 and the full web application could be installed in a short time. The 150 end-users of the local entities were trained to be able to use the software fully independently.

The result

  • Fast Close

With Intercompany, the group now has the perfect tool for an optimal interco reconciliation process, which results in an optimal closing process at both group and entity level. The data is being imported every month in the software to reduce workload at the six-month close. The time savings are significant: the consolidation team had gained two days in the account closing process only after the first period.

  • Automation of the process

The responsibility of the intercompany reconciliation is being fully delegated to the entities. The implementation of materiality thresholds at the interco rule and transaction levels enabled a reduction in manual reconciliation and increased the share of automatic reconciliation. This also leads to a significant time savings.

  • Increased quality of group-level financial information

The group uses the analytical dimensions in the software and is able to quickly highlight the consolidated turnover by business line or business unit, net of intercompany impact. Before, the consolidation team had to manually reallocate the intercos to the right BU and BL in the reporting software, which automatically resulted in a less smooth process and a higher risk on errors.

  • Increased quality of entity-level financial information

Reconciliation at transaction level and at BU/BL level helps to reveal local problems (allocation criteria not included, artificial alignment on the seller, even in the absence of reconciliation – for example, merchandise in transit), which had been negatively impacting the quality of company accounting. One other improvement introduced by using Intercompany is that the transaction reconciliation enables reconciliation of the income statement figures from the beginning of the fiscal period (YTD) with the interco data. With its previous software package, the consolidation team loaded the year-to-date balances and transactions (monthly invoices) in the software. They found it difficult to reconcile the two and a great deal of time was lost trying to find where the differences originated.

  • Perfect auditability

There is a direct link between Intercompany and the consolidation software: data from Intercompany are automatically sent to the consolidation tool and this results in perfect auditability.

Mélanie Servais, Senior Consolidation Manager at Umicore explains:

“What I like about Sigma Conso, is that we’re in contact with the development team which listens to us. Our contacts aren’t just salespeople, which means that there is a real dialogue with the vendor. The dialogue was easy right from the start of the project, because we already spoke the same language. We felt that we were perfectly understood and our suggestions were taken into account. Furthermore, our efficiency is significantly improved thanks to the implementation of the software.”

Reconciliation of intra-group transactions
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