Value Proposition: An operational file for closing Intercompany before consolidation: IC Listing (Both sides) → Matching + Variances → IC Adjustments/Eliminations JEs → Tie-out → Consolidation Pack instead of IC variances being discovered at the Consolidated TB.

In 20 Seconds: What Will You Get?

• Intercompany Tracker to consolidate IC transactions and balances (credit/debit) with the same transaction reference.
• Matching Rules: Document/Invoice/PO/GRN number + Period + Currency + Counterparty.
• Variance Log to classify variances: Timing / Posting / FX / Cut-off / Missing invoice.
• IC AR/AP Tie-out: Linking IC subledger with IC control accounts in GL for each company.
• Eliminations Starter: Ready-made elimination entry templates (IC AR/AP + IC Revenue/Expense + IC Loans/Interest… as per your scope).
• IC JE Log to document intercompany settlement entries or eliminations at the group level.
• Pack Index for indexing deliverables: Listings + Matching + Variances + JEs + Tie-outs.

CTA related to deliverables: Receive IC Tracker + Variance Log + Eliminations JEs to finalize IC balances before Consolidated TB and prepare the Pack for delivery.

Suitable For

• Group / Consolidation Accountant looking to close IC monthly before the Eliminations phase in consolidation.
• AR/AP Leads within companies needing a matching file that identifies variances and the responsible party for closing them.
• Groups with recurring IC transactions (internal sales/services/advances/shared expenses) requiring a consistent Tie-out.

Not Suitable For

• Those without any Intercompany Listing (no Subledger or GL tag) — data organization is required first.
• Groups needing very advanced Eliminations (such as Unbilled IC revenue with multiple contracts or Unrealized profit in inventory) without sufficient movement details.

Without the Tracker / With the Tracker (Quick Comparison)

Before Use: 5 Symptoms of Intercompany Transactions

• IC AR/AP does not close because each party has a different Listing and there is no unified reference for matching.
• IC variances are closed with aggregate entries without specification (Timing vs Posting vs FX).
• Cut-off discrepancies between two companies (invoice in one company and shipment/receipt in another) with no follow-up record.
• IC Loans/Interest are recorded in one company and forgotten in another or recorded in a different currency without explaining the FX difference.
• At consolidation: Eliminations are made and then variances appear because IC was not tied out at the company level first.

Intercompany Transaction Matching: Implementation Method (3 Steps Without Gaps)

Step 1: Preparation and Report Gathering

• Extract Intercompany listings from each company (IC AR/AP, and possibly GL extract for IC transactions).
• Identify the counterparty and currency and reference period for each transaction.
• Identify IC accounts in GL (Control accounts) to ensure Tie-out between Listing and GL.

Step 2: Matching + Variance Classification + IC JE Log

• Run the matching within Intercompany Tracker based on Matching rules (Invoice/Doc no. + Date/Period + Amount/Currency).
• Record any variance in Variance Log with a classification of the reason (Timing/Posting/FX/Cut-off/Missing docs) and identify the owner of the item.
• Prepare intercompany settlement entries as needed (correcting Posting/Cut-off) and document them in IC JE Log.

Step 3: Eliminations Starter + Tie-out + Pack

• After closing the main variances, implement Eliminations Starter at the group level (IC AR/AP + IC P&L items as per scope).
• Perform a Tie-out: Net IC balances after adjustments should equal what will be eliminated in consolidation (before Consolidated TB).
• Compile IC Pack: Listings + Tracker + Variance log + JEs + Tie-outs + Index for delivery/audit.

Product Components (Clear Inventory)

1. Intercompany Tracker (Matching Log)
   • Practical Purpose: Consolidate IC transactions from both parties in a single table with fields: party/counterparty/document reference/currency/value/period.
   • When to Use: Monthly before group closing or before starting consolidation.
   • Output Evidence: Tracker shows matched and unmatched transactions and the status of each transaction.
2. Matching Rules & Data Dictionary (Matching Rules)
   • Practical Purpose: Standardize “what is the key” for matching between the two companies to prevent random matching.
   • When to Use: During initial setup + annual review or when adding a new entity/system.
   • Output Evidence: Written rules defining required fields and how to name references.
3. Variance Log (Variance Log)
   • Practical Purpose: Classify variances and identify the closing owner and timing instead of leaving the variance “unknown.”
   • When to Use: Throughout the month and until the closing of the IC cycle.
   • Output Evidence: Variance log with closing date and note of the action taken.
4. IC AR/AP Tie-out Sheet (Linking Listing with GL)
   • Practical Purpose: Ensure that the IC listing equals the balance of IC control accounts in GL for each company.
   • When to Use: Monthly before approving IC numbers within the Tracker.
   • Output Evidence: Tie-out specifies whether the variance is from Subledger or from GL posting.
5. Eliminations Starter (Elimination Entry Templates)
   • Practical Purpose: Prepare standard elimination entries at the group level based on IC balances/transactions.
   • When to Use: After matching and closing main variances, and before issuing Consolidated TB.
   • Output Evidence: Documented Eliminations JEs ready to be included in the Consolidation JE Log.
6. IC JE Log (Settlement and Elimination Entry Log)
   • Practical Purpose: Document entries resulting from IC variances or elimination entries: reason + support + approval + impact.
   • When to Use: During closing variances and while preparing Eliminations.
   • Output Evidence: JE Log linked to each transaction/variance within the Tracker.
7. IC Pack Index (Delivery Index)
   • Practical Purpose: Consolidate everything related to IC in a single delivery: Listings + Matching + Variances + JEs + Tie-outs.
   • When to Use: At the end of each Month-End/Year-End cycle when delivering the group file.
   • Output Evidence: Index specifying sections and files and where each evidence is located.

CTA related to deliverables: Intercompany Tracker + Variance Log + Eliminations Starter + IC JE Log for delivering IC before consolidation.

What Should Be Included in the Delivery?

• 01 – IC Listings: IC AR/AP reports from each company (at a minimum) + IC GL extract if available.
• 02 – Tracker: Intercompany Tracker file (transactions + matching status + counterparty).
• 03 – Matching Rules: Page of matching rules + data dictionary for the fields used.
• 04 – Variances: Variance Log with reason classification + owner + closing date + action (JE/correction/document).
• 05 – Tie-outs: IC AR/AP tie-out for each company between Listing and GL control account + explanation of any variances.
• 06 – JEs: Intercompany settlement entries (if any) + group-level Eliminations entries + reference for each entry.
• 07 – IC JE Log: Log of entries with supporting reference and approval.
• 08 – Pack Index: Index specifying the location and names of files and linking them to transactions/variances.

After Implementation (Two Key Points)

• Operational Outcome for the Team: IC closing becomes a clear monthly cycle: Listing → Matching → Variances → JEs → Tie-out, instead of processing IC variances under consolidation pressure.
• Control/Audit Outcome (Evidence & Traceability): Every IC variance is documented with a clear reason, responsible party, and action, and every elimination entry is linked to a transaction/balance within the Tracker in an indexed Pack.

FAQ — Questions Before Purchase

Is the product designed for consolidation or for closing IC within companies?

For both, but its strength lies in closing IC before consolidation: matching balances and transactions, then generating an Eliminations starter to be included in the Consolidation JE Log.

Does it fit any accounting system?

Yes. The key is the ability to extract IC listings or at least a GL extract with counterparty/IC accounts tagging.

What is the minimum data required to get started?

IC AR/AP listings from both parties + balance of IC control accounts in GL. IC Revenue/Expense and Loans/Interest data improve quality when available.

Does it support multiple currencies?

It supports them from a matching perspective through currency fields and tracking FX variances within the Variance Log, but the translation of the overall listings is done within the consolidation software (FX translation) and not within this product.

Does it provide ready-made elimination entries?

It offers Eliminations Starter for standard rules (IC AR/AP and IC P&L items). Final entries may need adjustments based on Mapping, group currency, and transaction nature.

Is it suitable for very large groups?

It is suitable if the IC listings are organized and have clear references. If IC volumes are excessively large without a unified reference, IC data needs to be improved first (counterparty tagging/invoice reference discipline).

Does it cover unrealized profit eliminations in inventory?

No, as a core product. This is a “Starter” for standard eliminations. Unrealized profits require internal inventory movement data and additional pricing and quantity details, often needing a separate template.

Is there a template for delivering references?

Yes. The IC Pack Index includes Listings + Tracker + Variances + JEs + Tie-outs as an organized and traceable delivery file.

Ready to Close Intercompany Before Consolidation?

You will receive: IC Tracker + Matching Rules + Variance Log + Eliminations Starter + IC JE Log + Pack Index to prepare Month-End/Year-End within the group.