Umicore Case Study
Umicore: key information
|Business sector:||Materials technology and recycling|
|Company status:||Public company listed in the BEL 20 stock exchange|
|Global presence:||34 countries|
Summary of benefits perceived by the customer
- Efficient closing process
- Improved reliability
- Increased quality of group-level financial information
- Increased quality of entity-level financial information
- Elimination of audit-trail issues
With 132 entities requiring consolidation and an active “external-growth policy”, Umicore experience a continual increase in the number of intercompany transactions. By the end of 2013, these transactions accounted for 185.000 lines of transactions on the balance sheet and income statement.
The diverse accounting systems, accounting standards and cultures added to the complexity of the consolidation process.
Since 2005, the group has used software for the reconciliation of intragroup transactions. However, by 2012, the application no longer met internal and external reporting requirements.
Umicore’s Financial Department was therefore tasked with identifying a reliable software from an expert in the field of financial consolidation, who could evolve with the group’s changing needs.
The selected solution
Following a competitive sourcing process, Umicore selected and successfully implemented Sigma Conso Intercompany. 150 end-users were trained to use the software autonomously. Our software enabled Umicore to:
- Manage intercompany information by Business Unit and by Business Line
- Reconcile intercos at transaction level
- Generate detailed activity reports
- Adjust to the needs of the group
- Introduce a user-friendly Software
With Sigma Conso Intercompany, the group now has the ideal tool for an optimal intercompany reconciliation process at both group and entity levels. The data is imported in the software on a monthly frequency to minimize the workload at the six-month close. Umicore benefitted from time-saving in the consolidation process immediately.
The responsibility of the intercompany reconciliation was fully delegated to the entities. The set-up of materiality thresholds at the interco rule and at transaction levels resulted in further automation of the process.
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 (BL) or business unit (BU), net of intercompany impact. Previously, the consolidation team had to manually reallocate the intercos to the right BU and BL in the reporting software.
Increased quality of entity-level financial information
Reconciliation at transaction level and at BU/BL levels 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 Sigma Conso 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.
There is a direct link between Sigma Conso 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 supplier. 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, the implementation of the software has led to significant improvements in terms of efficiency.”