‘Critical weakness’ in corporate finance operations exposed by global volatility, says BlackLine

BlackLine’s white paper, Intercompany Under the Pump: How Global Chaos is Exposing Your Weakest Link, suggests that while companies focus on external strategies like supply chain adjustments, they often overlook the profound impact on their internal financial workflows.

These intercompany operations, which include cross-entity sales, shared service allocations, and capital transfers, “are frequently fragmented, poorly governed, and dangerously exposed to disruption”, BlackLine said.

The research underscores “how fragmented intercompany processes have become a critical blind spot, threatening business resilience at a time when global conditions remain unpredictable”, the company continued.

Its findings suggest that such inefficiencies are creating tangible business risks.

“Unresolved balances are trapping cash, inconsistencies in transfer pricing are triggering audit concerns, and delays in month-end reporting are distorting companies' true financial positions,” BlackLine said.

“The research also points to an ‘ownership vacuum’ as a root cause, where intercompany processes lack clear accountability as they cross multiple business units, systems, and borders.”

Moreover, the white paper warned that such internal fragility limits a company's ability to respond to macroeconomic shifts, such as trade restrictions, inflation, and evolving tax regulations.

“The risk is compounded by increasing regulatory scrutiny, as jurisdictions introduce more stringent transparency requirements and real-time audit capabilities, penalising disorganisation and deception alike.”

Speaking about the findings, Mike Goldsworthy, senior manager of intercompany value architecture for BlackLine, said organisations could not afford to let intercompany remain invisible.

“The longer the delay in addressing these challenges, the more it costs in time, cash, and compliance exposure,” he said.

“The good news is that this isn’t a problem of intent. It’s a problem of structure, and structural challenges can be rebuilt.”