Client: Global Consumer Packaged Goods Company

Client Situation

After a global CPG company split, the successor organizations’s Cash, Intercompany Loan and Headquarters Accounting functions were identified as inefficient and prone to risk. The AddVantage Group was engaged to identify and resolve the issues in these functions and to optimize the related business processes

• Substantial unresolved balance sheet reconciling items existed on the company’s GL for cash, HQ and intercompany accounts
• Material errors and control violations had been identified by internal and external auditors
• Daily preparation of manual journal entries was required to accurately record cash transactions
• Staff turnover was high; morale was low

Our Approach

• Clarified bank and loan account ownership responsibilities across finance teams
• Optimized / re-designed the Cash, HQ and Intercompany reconciliation processes
• Identified all transactions throughout the daily cash sweep and intercompany loan funding chain
• Developed client staff and reorganized team responsibilities
• Identified process and support weaknesses associated with the company’s five money center banks
• Provided subject matter expertise to support a cash transaction system implementation

Outcomes

• Multi-year reconciling items for 100+ accounts were resolved
• $100 Million+ in intercompany balance cleanup
• Reduction in financial statement risk
• Audit risk mitigation approach was accepted by internal and external auditors
• Easy-to-understand reconciliation templates and documented procedures were transitioned to client staff
• Reduction in FTEs required to prepare and review balance reconciliations
• Integrated cash transaction GL postings in SAP, requiring very few manual journal entries