From Rules to Results: Fully Automated Intercompany Allocations in M3
Project Type
Finance Automation
Date
Oct 2024
Location
Adelaide, Australia
Role
Finance Solution Architect
Client Industry
Grocery Retail
Tech Stack
Infor M3 REST APIs
Infor ION (API and Event Orchestration)
XtendM3 (Custom technology layer)
Me Events Framework
JSON (API Payloads)
The Client
The client is a privately owned Australian supermarket chain operating hundreds of stores across South Australia and Queensland, with a strong focus on community-based retailing, fresh food, and everyday value. The organisation runs a complex, multi-entity operating model supporting high-volume transactions, centralised finance functions, and strict intercompany accounting and control requirements across its retail network.
The Challenge
Challenge
The client operated a multi-entity supermarket group with centralised cost structures, including marketing spend, shared services, and head-office overheads that needed to be recovered across operating entities. Intercompany recoveries were calculated manually outside the ERP using spreadsheets, with percentage-based allocation rules applied inconsistently across entities and periods. This led to delayed recoveries, frequent intercompany control account imbalances, limited audit traceability, and significant effort during month-end close to reconcile and correct journals across multiple legal entities.
The Solution
To automate intercompany allocations for centralised costs such as marketing spend and shared services, a fully event-driven, rule-based solution was implemented within Infor M3:
Automated Event Job – A custom after-hours event job was created to extract relevant postings from the general ledger.
API-Orchestrated Data Flow – The job output is captured and passed through a sequence of REST APIs orchestrated via M3 ION, with each response converted to JSON and fed into the next API call.
Eligibility Validation – Configuration rules within M3 evaluate whether the GL codes and Cost Centres/Stores are eligible for intercompany allocation. Non-eligible postings are automatically excluded, preventing unnecessary processing.
Allocation Calculation – For eligible postings, the system retrieves allocation rules to determine target legal entities, percentage splits, intercompany receivables/payables, and GST treatment where applicable.
Automated Journal Construction & Posting – Middleware constructs balanced intercompany journals and posts them automatically to the originating and target entities, ensuring control accounts reconcile in real-time.
Performance Optimization – Load testing using JMeter determined the optimal number of parallel threads and maximum load the system could handle without degrading performance, ensuring the solution scales to high-volume supermarket transactions.
