Intercompany Loan Management
Cittros has developed a new functionality for handling Intercompany loans between companies in the same company group.
Intercompany loans are loans made from one business unit of a company to another, are commonly used by treasurers as a balance management tool. When one entity needs to borrow and another entity has excess cash, it makes sense to replace bank loans with an intercompany loan to avoid bank spreads and fees.
With an intercompany loan, the borrowing entity and the lending entity are part of the same group. The lending entity pays the loan principal to the borrowing entity at the start of the loan, and then the borrowing entity repays the principal plus interest to the lending entity at the end or maturity of the loan.
When an intercompany loan is created, it should be fully documented, including the amount of the interest rate to be charged and principal repayment terms.
The loan functionality provides a global overview of all the intercompany loans made between companies in D365 Finance.
The Intercompany Loan Management functionality enables the easy handling of loans between two companies in Microsoft Dynamics 365 Finance. The functionality includes creation of the loan, issue of the loan, payment on loan and interest calculation with a global view of all the transactions and loans status.
Furthermore, it is possible to print an overview of all open loans including how much remains to be paid in a loan account statement.
Why is Intercompany Loan Management so
important?
Because it is used as a cashflow management technique by the head of the cash department of the holding company or group company, so it supports the entity’s operations in a group that has lower cash resources or cannot raise finance through a bank or another institution. Intercompany loans are provided for short-term finance, and thus, settlements in the same time frame make the job easy.
What are the Benefits?
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Strategic management tool
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One place to find all the information for loans
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Take full control of you loans to generate payments and calculate interest in the two legal entities at the same time
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Avoid personal dependence
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Uniformity in business processes
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Manage risk and compliance on loans
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Save time and effort (i.e., documentation, follow-ups, payment schedule, etc.)
Pricing
Price for the intercompany loan functionality is 500 EUR per month + taxes. It include one tenant.
Support for install and end-user support is charges by hours. Subscription is invoiced yearly.
When you choose CITTROS, you choose QUALITY, HONESTY, and INDUSTRY LEADERSHIP.
