Token-Based Settlement Systems for Inter Company Transactions in Multi-National Corporations

Abstract

Inter-company settlements within multinational corporations remain constrained by fragmented
accounting systems, delayed reconciliations, and cross-border regulatory complexities. Traditional journal-based
settlement mechanisms often require manual intervention, generate reconciliation backlogs, and introduce
inconsistencies due to currency conversions and asynchronous reporting cycles. This paper proposes a blockchain
enabled token-based settlement framework that redefines inter-company accounting by representing internal
financial obligations as digital tokens governed by smart contracts. Each token encapsulates transaction attributes
such as entity structure, tax rules, transfer pricing, and forex implications, enabling automated and verifiable
settlement flows. The system integrates with SAP S/4HANA through APIs, allowing real-time posting of token
events into financial ledgers while ensuring data integrity and audit traceability. Case simulations conducted in an
SAP S/4HANA sandbox illustrate how tokenized transactions eliminate reconciliation delays, streamline multi
entity clearing processes, and enhance transparency for auditors and corporate controllers. The proposed model
demonstrates reductions in processing time, improvements in liquidity forecasting, and more efficient cross-border
financial operations. Ultimately, the token-based approach aligns inter-company accounting with emerging digital
finance paradigms and offers a scalable pathway towards automated corporate treasury management.