Accountio / Templates / Reconciliations / Intercompany reconciliation

Intercompany reconciliation template in Excel

Agree every balance between group companies before the consolidation: put both sides next to each other, explain the difference with items in transit, and chase whatever is left. This intercompany reconciliation template is one Excel workbook with a row for each pair of companies and a list of reconciling items with an owner and a date to post.

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What the workbook looks like

Intercompany reconciliation template
What the workbook coversSheet or column in the workbook
Month end, cut-off and tolerance
✓
EntitiesMonth end date, the cut-off date agreed with the group and the tolerance for a mismatch
Every company in the group
✓
EntitiesCode, entity name, country and finance contact for up to 30 companies
One row for each pair
✓
Pair code, Entity A (receivable), Entity B (payable)A is owed the money and B owes it, so each balance has one home
Both sides of the balance
✓
Per A's books, Per B's booksBoth entered as positive amounts in the group reporting currency
What does not match
✓
Difference A less B, Explained by items, UnexplainedReconciling items are added up for each pair automatically
Mismatches to chase
✓
CheckMismatch: agree with the other company, plus wrong codes, a pair listed twice or a missing balance
What explains the difference
✓
Reconciling itemsCash in transit, an invoice not yet booked or a recharge not accepted, with the pair code and amount
Who clears each item
✓
Which company posts it, Owner, Date to postFlagged as past due when the posting date is before the month end
Group totals
✓
Totals, Pairs with a mismatch, Pairs still to completeThe count of pairs left to agree before the consolidation

When you need an intercompany reconciliation

An intercompany reconciliation agrees the balance one group company shows as owed by another with the balance the other company shows as owing. Consolidated accounts under both FRS 102 and IFRS eliminate intragroup balances in full, so both sides have to match before they cancel out. Use this one when:

  • The consolidation is held up every month by intercompany differences
  • Recharges are invoiced by one company and never booked by the other
  • Cash sent between group companies near month end lands in different months
  • A new subsidiary joins the group and needs to be added to the month-end close

How to use the intercompany reconciliation template

  1. Set up the Entities sheet. List every group company with a short code and a finance contact, then set the tolerance and the cut-off date.
  2. Send the cut-off date. Before month end, ask every group company to book all recharges and settle in cash by that date.
  3. Enter both sides. One row per pair. Enter the amount A shows as receivable from B and the amount B shows as payable to A.
  4. List the reconciling items. Enter each item with its pair code, the amount by which it makes A's balance bigger than B's, the company that posts it, an owner and a date.
  5. Clear the flags. Agree every mismatch with the other company and post the reconciling items before the consolidation.

Questions

What is an intercompany reconciliation?

A check that two companies in the same group record the same balance between them. The amount one company shows as receivable should equal the amount the other shows as payable, after items in transit.

Why do intercompany balances not match?

Cash sent at month end that the other company receives a few days later, recharge invoices booked by one side and not the other, disputed recharges, different exchange rates and postings to the wrong group company.

What is the intercompany reconciliation process?

Agree a cut-off date, collect both sides of each balance, work out the difference, explain it with reconciling items, agree what is left with the other company and post the corrections before the consolidation.

Why are intercompany balances eliminated on consolidation?

Group accounts present the parent and its subsidiaries as one business, and a business cannot owe money to itself. FRS 102 and IFRS 10 both require intragroup balances and transactions to be eliminated in full.

Who should post the reconciling item?

The company whose books are behind. Cash in transit is usually booked by the company that has not yet received it, and an unbooked recharge invoice by the company that received the invoice.

Also in the reconciliations pack

Bank reconciliationBalance sheet reconciliationStock reconciliation

See the whole pack →

Who it's for

Finance teams and group accountants who close the books each month for more than one company.

Last checked

Checked against FRS 102 Section 9 and IFRS 10 consolidation rules in November 2026.