close
Share with your friends

Transfer Pricing Cube

Transfer Pricing Cube

TP Cube is an off-the-shelf cost allocation tool specifically designed around a cost plus/minus allocation methodology.

An off-the-shelf application designed around a cost plus/minus allocation methodology.

Transfer Pricing Cube

While service recharges holds a highprofile within fiscal authorities worldwide,its implementation as well as the actual processof recharging expenses is often overlookedand regularly completed in complex,error-prone spreadsheets.

Our software tool replaces the spreadsheetand is designed to automate the expensesrecharge process harnessing the functionalityof a database.

Errors or gaps in your transfer pricing implementationcan cause substantial financial costs and damage toyour reputation and risk profile within fiscal authoritiesworldwide, so it is essential to ensure that these issuesare managed properly.

Combined with an audit log and powerful reportingfunctionality, TP Cube presents significant advantagesover the typical rigid spreadsheet based approach to costallocation and recharging.

It is also becoming increasingly important for organisationswith complex international structures or transfer pricingagreements to be able to accurately model the effects ofmethodology changes on their recharges position. Businessdecisions may often be made without due considerationto transfer pricing. However, as these amounts can oftenbe significant, early identification of any transfer pricingimplications could be hugely beneficial.

Our approach

TP Cube is an off-the-shelf software application specifically designed around a cost plus/minus allocation methodology.

We will look at your existing systems and processes, reporting, functionality and modelling requirements to determine what you need from the software before advising on an appropriate TP Cube configuration including any specific customised requirements where appropriate.

Typical implementations

The tool is typically used by Transfer Pricing departments to calculate cost recharges and generate invoices to group entities based on allocation key metrics with agreed cost plus mark-ups applied where appropriate.

It is also used for modelling any changes in TP methodology to quickly see the global impact on recharges.

TP Cube allows you to create powerful automatic treatment macro’s to quickly allocate thousand of line item expenses and easily update following year allocations.

Features

  • Cost Allocation: Allocation and classification of data (e.g. by function and recipient) via appropriate allocation keys. Calculation of transfer pricing values using agreed methodology.
  • Invoicing: Automation of invoices for recipient entities and other reporting functionality as required. A wide range of other reports can also be configured, ensuring a visible and auditable data trail.
  • Modelling: Using a real set of transfer pricing data as a basis for carrying out “what if” scenario modelling as required. Intuitive functionality helps ensure that complex scenarios can be modelled accurately in a short time frame.
  • Support Services: Once configured, TP Cube would be tested using prior period data before being handed over to your IT department, along with a complete user manual, for deployment to the relevant staff. We can also assist with your training requirements as appropriate. 

Potential benefits

Our tool provides a robust method to help manage, interrogate and model your transfer pricing calculation process. Automation of the data sourcing and calculation processes can free up valuable time for staff to concentrate on more value added activities. From a S-O 404 and audit perspective, TP Cube can help provide a transparent and consistent process to help assure key stakeholders that you are effectively managing your transfer pricing methodology.

TP Cube is a transparent solution which enables users to view an audit trail and detailed reports on current period and trend analysis data, enabling queries to be answered swiftly and giving management access to a wide range of graphical and tabular reports. The calculation engine can provide recipient entities with a detailed breakdown of the charges received. This can prove invaluable in discussions with their own auditors and tax authorities and assist in the defense of charges to local fiscal authorities in recipient countries. This in turn can help improve the deductibility of recharged costs. The scenario modelling functionality can also provide detailed scenario reports, helping the transfer pricing team play a more value added and proactive role in the business.

How KPMG can help

Our member firms have a rich history of designing and working with clients to implement automated tools to help ensure your transfer pricing systems and process needs are identified and managed. From data sourcing and automated calculations to detailed reporting and scenario planning, TP Cube can automate much of the process, giving your staff time to focus on more value added activities.