Client Snapshot
Industry:
Design, Development & Construction
Location:
United States & Hong Kong
Engagement Type:
Intercompany Accounting, Project Accounting & Financial Reconciliation
Operating Complexity:
Multi-Entity, Multi-Currency (HKD & USD) environment
Key Highlights
Historical Reconciliation:
20 projects fully balanced
AP & AR Alignment:
100% foreign exchange adjustment accuracy
Contract-Based Billing:
Real-time margin tracking enabled
Audit Readiness:
End-to-end traceability established
Client Background
A cross-border trading and construction group operating across Hong Kong and the United States manages a multi-entity supply chain across currencies. Materials flow from a Chinese supplier to a Hong Kong trading entity, then to a U.S. trading entity (USD), and finally into a construction entity delivering multiple active projects.
With approximately 20 ongoing projects, accurate intercompany alignment, currency conversion discipline, and project-level reporting were essential to ensure reliable profitability tracking and financial control.
Business Challenge
Intercompany mismatches, forex gaps, and missing document linkages limited profitability visibility and increased audit risk.
Intercompany Balances Not Reconciling
Balances between Hong Kong and U.S. entities were not aligning across projects.
Exchange Rate Differences Not Properly Accounted
HKD-to-USD forex differences were not consistently tracked or adjusted.
Project-Level Cost Capture and Margin Consistency Issues
Costs and profit margins were inconsistently recorded across entities and projects.
Broken Transaction Chain and No Audit Trail
POs, vendor bills, estimates, and invoices were not properly linked, preventing end-to-end traceability.
Without a structured lifecycle mapping and reconciliation framework, the client lacked reliable project profitability reporting and audit-ready support. A control-driven approach was required to align entities, currencies, and documentation across all projects.
OHI's Approach & Solution
Transaction Lifecycle Mapping
- Mapped the end-to-end transaction flow across entities: Supplier → HK Entity → U.S. Entity → Construction Entity → Final Project
- Reviewed each of the 20 projects individually to validate cost allocation and revenue recognition
Multi-Currency Reconciliation
- Standardized exchange rate application across purchases, intercompany sales, and USD conversion stages
- Identified and corrected realized and unrealized forex differences to align balances post-translation
Intercompany Reconciliation & Alignment
- Reconciled intercompany AR/AP by removing mismatches caused by currency differences
- Aligned markup structures and standardized transaction recording across entities
Documentation Rebuild and Audit Trail
- Rebuilt the transaction chain per project: PO → vendor bill → intercompany invoice → customer estimate → customer invoice
- Established end-to-end traceability from procurement through final billing
Results & Impact
| KPI | Before OHI | After OHI | Improvement |
|---|---|---|---|
| Intercompany Balances | Unreconciled across entities | Fully matched across 20 projects | 100% alignment |
| Forex Accounting | Untracked differences | Properly recorded and adjusted | Accurate reporting |
| Project Profitability | Limited visibility | Real-time margin tracking | Improved decision-making |
| Documentation & Audit Trail | Fragmented and incomplete | Fully structured and traceable | Audit-ready |
| Cash Flow Planning | Uncertain | Forecasting improved | Better visibility and control |
| Working Capital | Inefficient due to misalignment | Optimized through reconciliation discipline | Improved outcomes |
With a structured reconciliation framework and standardized accounting practices, the client achieved full alignment across entities, currencies, and projects—enabling accurate profitability reporting and a robust audit trail to support governance and decision-making.
“We’re very happy with the support from OHI. They have done an excellent job organizing our entities, reconciling records, and keeping everything accurate and up to date. Their communication is clear and professional and have been great to work with. We’re excited to continue working together as we move into the next phase of project and construction accounting.”
Global Trading & Construction Group
CFO
Gain real-time profitability visibility across entities and currencies
Reconcile intercompany balances, standardize forex accounting, and rebuild audit trails from procurement to billing for accurate project margin tracking.
