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Why Transfer Pricing:
- more accurately charge for internal services
- more accurately cost out products, services, customers, channels
- outsourcing decisions
- benchmarking
- so internal customers know what different services cost
What is Transfer Pricing
Transfer Pricing is:
- identifying and costing your activities and services
- charging internal customers for your services either through accounting
system or some report
- internal customers are only charged for quantity of service they agree
to buy
- Service Level Agreements established as part of contract with internal
customers
- Service and activity unit price agreed to upfront.
Institute of Management Accounting (SMA 5G) Implementing Shared
Service Centers
Leahy, Tad, Technology Goes Out, Money Comes Back,
IT Financial Management, June 2001, P.15, (Charging business units for their IT
usage requires)
Thomas, Mike, Transfer Pricing, Management Accounting
Quarterly, Spring 2001, P.4
Triplett, Ann & Jon Scheumann, “Managing Shared Services with ABM,
Strategic Finance, February 2000, P.40
Call or email below Jim Brimson or Pat Dowdle at
972-980-7407 to find out how Transfer Pricing can help people understand and
control shared services.
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