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What is recharge automation?

So, you know what intercompany charges are and it is likely you have experienced what a pain they can be to do manually. The first step to making your intercompany charges a more organised, simple process is to run them monthly, and next up: automating them.

Running intercompany charges manually can be hard work.

Intercompany charges are a critical part of accounting correctly where you have multiple related business entities. While the output is critical, the process for running intercompany charges has historically been cumbersome and time-consuming. It has required:

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Exporting transactions from the related entities' accounting systems;

Manually identifying the appropriate recharge treatment for each transaction;

Preparing a spreadsheet to calculate the correct charges.

Recharge automation transforms this process.

Recharge automation transforms this process. It does for intercompany charges what cloud accounting systems have done for filing VAT/GST/sales tax returns. Evaporating the hours of manual work and replacing it with minutes to review and make any amendments to automated calculations.

Recharge automation enables you to:

  • Set rules for how an entity’s transactions should be treated

Using a combination of factors like account code, tracking category, customer or supplier contact or transaction description to guide the rule as to which transactions it should apply to. You can then use these rules each time you’re calculating your recharges;

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  • Connect your recharge automation software to your entities' accounting systems

Transactions for a particular period can then be pulled through automatically via the application programming interface (API). The rules will automatically calculate the ensuing recharges;

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  • Review the application of the rules to the transactions for the period

You make any adjustments needed to apply a different rule to particular transactions. You then click okay and you have your recharges for the period, which can be posted back to your accounting system.

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Recharge automation saves users time, provides greater accuracy and enables accounts and recharges to be produced monthly with minimal effort. With Mayday Recharger, you can do exactly that - enabling you to do in minutes what used to take hours. Find out more here.

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