Support costs and internal charges represent a significant chunk of costs in most organizations today and are its fastest growing cost component. Yet organizations are unable to control or manage these costs. Transparent, our Shared Services and Transfer Pricing solution stop the arguing and complaining about internal charges and provides a viable solution to manage internal charging. Control these costs by setting up a Transfer Pricing system for your organization, with agreed upon prices between business units managed and controlled through Service Level Agreements (SLAs). This helps to foster the autonomy of Business Units and drives costs down. All costs then become manageable.
It allows divisions, departments or entities within the organization to use arms length business principles and manage costs in the same way as any other supplier-buyer relationship. Business units enter into service level agreements with each other and negotiated rates and penalty clauses for non-performance.
Cortell can help your organization implement a transfer-pricing philosophy to suit your business and conditions. We have the systems to facilitate the practical implementation of full transfer pricing, taking into account fixed and variable pricing structures, even pricing based on the achievement of service levels or penalty charges. It is a system that allows charging to other entities up or down the organization structure and provides full accounting integrity. The system will show where profits or losses arise based on transfer pricing principles. If required, the system could even generate journal entries that affect your General Ledger, dynamically calculating this based on actual results achieved.
The Cortell Transfer Pricing system (Transparent) is web-based, allowing managers to view Service Level Agreements and the impact of transfer pricing on profitability and business unit costs. It has been implemented in large Financial Institutions.