In the world of spend analysis, intercompany trade is an important distinction for a number of reasons. As opposed to non-related party trade, intercompany trade impacts working capital, cash management, accounting issues and payments in very different ways. We know many Fortune 2000 companies trade with their subsidiaries in other jurisdictions around the world. The US Census Bureau and the US Department of Commerce collects data that reveals related-party trade accounts for more than 40% of total goods traded. So it matters, and the distinctions matter.
Check out the full article at our sister site Trade Financing Matters.