Operations & compliance
Intercompany reconciliation
Intercompany reconciliation is the process of matching receivables recorded by one group entity against the corresponding payables recorded by its counterparty, identifying variances caused by timing, FX, rounding or missing invoices, before producing the adjustments needed to bring both ledgers into agreement.
Manual reconciliation is one of the most time-consuming parts of a group close, often involving spreadsheets, email chains between local controllers, and a scramble to explain unmatched items before the books can be signed off, particularly where entities operate on different accounting systems or reporting calendars.
Automated matching tools apply tolerance rules for FX and rounding, categorise variances by root cause, and generate adjustment-ready journal entries, cutting reconciliation time from days to hours while leaving a clear audit trail that shows exactly how each intercompany balance was resolved and approved. This matters in.
In practice
What matters when applying intercompany reconciliation
- Match on invoice, amount, currency and period
- Apply tolerance rules for FX and rounding
- Categorise variances by root cause
- Generate posting-ready adjustment journals
- Keep an audit trail for every match
Frequently asked
Common questions
What causes most intercompany mismatches?+
Timing differences, FX movements between booking dates, rounding, and missing or duplicated invoices account for the vast majority of intercompany mismatches seen during a typical group close cycle.
Can reconciliation be automated across different ERPs?+
Yes, matching engines can ingest data from multiple ERP systems and currencies, applying consistent matching logic regardless of which accounting system each entity uses locally. This matters in practice.
See how the tooling handles this in practice
Our transfer pricing tools calculate intercompany charges, benchmark financing and reconcile the intercompany ledger from your own data. Book a short walkthrough and we will show the workflow on a scenario that matches your group structure, rather than a generic demo dataset.