Intercompany Documents

Intercompany documents record transactions between entities in your corporate group. This article explains how to configure intercompany accounts and create intercompany journal entries.

# What Are Intercompany Transactions?

Intercompany transactions are financial activities between entities within the same corporate group:

Examples:

• Parent company loans cash to subsidiary
• Subsidiary sells products to another subsidiary
• Division A charges Division B for shared services
• Entity A transfers assets to Entity B

These transactions don't go outside the group, so they're eliminated during consolidation.

# Setting Up Intercompany Configuration

Before creating intercompany journal entries, configure which accounts are used for intercompany postings.

1. Go to Settings (gear icon) → Chart of accounts (under the Records section)
2. Open the Intercompany rules tab
3. Click + Add intercompany rule
4. Fill in the fields:

At least one of debit or credit intercompany account must be set. You can click any existing config row to edit it.

# Creating an Intercompany Journal Entry

1. Go to Accounting → Journal entries
2. Click + Create journal entry and select the intercompany type
3. Fill in the header fields:

4. Configure the FROM line (source entity):

   • Entity — the originating company entity
   • Account — the GL account
   • Eliminate — whether this line is eliminated at consolidation (Yes / No)
   • Description — optional line note
   • Tax code — optional
   • Debit / Credit amount

5. Configure one or more TO lines (receiving entities) with the same fields. Use + Add line to add more TO lines.

6. Review the Net impact panel (bottom of the form) — shows a real-time preview of the net effect per entity and account as you enter amounts.

7. Click Save to keep as Draft, or Post to finalise.

Good to know: Debit and credit totals are shown at the bottom of the lines table. The entry must balance before it can be posted.

# Voiding a Posted Entry

If you need to reverse a posted intercompany journal entry:

1. Open the posted entry from Accounting → Journal entries
2. Click Void
3. Confirm the action in the dialog — all individual journal entry postings will be reversed

This action cannot be undone. The entry's status changes to Archived and the GL impact is fully unwound.

# Statuses

Note: If you need to reverse a posted intercompany entry, you can void it. Open the posted entry and click Void in the top-right actions. Confirm in the dialog — this action reverses all the journal entry postings that were created when the entry was posted, effectively unwinding the GL impact. Only posted entries can be voided; draft entries can be deleted instead.

# Net Impact Preview

While a journal entry is in Draft, the Net impact panel updates in real time as you edit lines. It shows the net effect of the transaction per entity and account before you commit.

After posting, the panel shows the actual posted net impact. The tooltip reads:

"Displays the net effect of intercompany transactions. These are reversed via elimination entries to ensure accurate reporting, while this view highlights their original impact."

# Entry Detail Tabs

When viewing an intercompany journal entry, three tabs are available on the right panel:

# Filtering the Journal Entries List

The intercompany journal entries list can be filtered by:

• Posting date (defaults to current quarter)
• Valuation date
• Currency
• Status (Draft / Posted / Archived)

Free-text search is also available.

# Elimination and Consolidation

The Eliminate field on each line and the Eliminate source line toggle in intercompany config determine which lines are flagged for elimination when producing consolidated statements.

At consolidation:

• Lines marked for elimination are excluded from the consolidated GL
• Intercompany receivables and payables offset each other
• Only external transactions remain in consolidated output

Entity-level GL reports still show intercompany amounts in full.

# Regulatory and Tax Context

GAAP / IFRS:

• Intercompany transactions are eliminated in consolidated statements
• Entity-level statements still show intercompany amounts
• Intercompany profits may be deferred (upstream/downstream sales)

Tax:

• Intercompany transactions must be at arm's-length prices
• Transfer pricing regulations apply to significant intercompany amounts
• Documentation required for tax authorities

# Best Practices

• Standardise accounts — use consistent intercompany account naming across entities
• Set up config first — configure account ranges before creating entries so elimination flags apply correctly
• Reconcile monthly — ensure intercompany balances across entities agree
• Review net impact — use the preview panel to verify the effect before posting
• Document the purpose — use the description field and attachments to record the business reason

# Related Articles

• Multi-entity ledger management
• Creating manual journal entries
• FX revaluations