Intercompany matching

Intercompany Matching page is used for "matching" transactions between the companies in a group for the purpose of elimination and reconciliation.

Intercompany matching is necessary when there are differences in intercompany transactions. Reasons for intercompany differences include:

• Invoice is booked by one company and corresponding purchase is not booked by the other company

• Companies ending their fiscal year at different dates

• Impact of currency rates on intercompany transaction

• Transaction with a turnover on one side and a purchase booked as an asset on the other side

• VAT not refundable

Companies considered in the intercompany matching process

Accounts considered in the intercompany matching process

To access the Intercompany Matching page, click Consolidation > Intercompany Matching.

Before you can display any intercompany matching transactions, you must run consolidation to ensure that all Bundles and Adjustments are integrated. You will be prompted by Financial Consolidation to run a consolidation before you can proceed.

Click to prepare and display all the intercompany reconciliation information from running the consolidation in two tables:

• As debit company (above) - code, name, and the local currency of the company identified As debit company for the debit transaction.

• As credit Company (below) - code, name, and the local currency of the company identified As credit company for the credit transaction.

For each company the details of the intercompany matching /unmatching transactions are displayed as follows:

• Rule - the intercompany elimination rule used for displaying the detailed information.

• Account - the account on which the amounts are booked.

• Account Description - description of the account.

• Journal - the journal code and category on which the amounts are booked.

• Journal Entry - the journal entry number.

• Journal Description - the journal description.

• Amount - the amount in group currency.

• - Opens the page where you can correct the intercompany details.

Filtering options

The right-side panel is where you use certain criteria to filter the intercompany information you want to display.

• Threshold - the amount under which any intercompany difference is ignored. See Set Threshold.

• Filter group box includes the following filters that you can select to further limit the intercompany transactions to display:

  • Unmatched Transactions. This option is selected by default.

  • Matched Transactions. Transactions that match.

  • Exclude Equity Method and NC - excludes intercompany transactions with companies that are Not Consolidated or consolidated with Equity Method.

  • Merge Debit and Credit amounts - By default, Financial Consolidation will compare the debit amounts of one company with the credit amounts of the partner company. When you select this option, all debit and credit amounts of one company will be compared against all debit and credit amounts of the partner company within the same Intercompany Elimination rule.

  • As rule - allows you to limit the intercompany reconciliation to one specific Intercompany Elimination rule.

  • As debit/credit company - allows you to filter the intercompany reconciliation to just the transactions of one company against all its partners.

• - applies your criteria to the details displayed.

• - opens the page where you can print the Intercompany Reconciliation information. See Print Intercompany differences or matched transactions.

Set threshold

1. In the Threshold field, click .

   

2. In the Threshold window you can set the amounts at which the differences will not be displayed. There is one line for each Intercompany Elimination rule, meaning you can define different thresholds for different rules.

     Note:  When you enter an amount in the last input field beside and click the button, the entered amount will be copied to all rules.

3. To save the modifications you make to the threshold, click .

    

Correct intercompany details

On this page, you will be able to correct the intercompany details. This page is displayed if you click on the main page. The Intercompany Rule, Company and Partner Company including code, name, and local currency you are working on are displayed.

1. Search for the account on which you want to make the correction. Only accounts defined as Intercompany Accounts will appear on the list.

2. Enter the amount that you want to correct. You can choose to correct the difference in Group Currency or in the Local Currency of the company.

   You can use one of the following two ways to make the correction:

   • modify the statutory bundles directly. See Update Bundle.

   • generate an adjustment. See Generate Group Adjustment.

Update Bundle

  Note:  This correction is allowed only if the difference originates from the statutory accounts of a company, and not if the difference originates from the group adjustments.

1. In the Account field, enter the account code or click to search for, and select it.

2. Click to add the difference amount to the Bundle Amount of the selected account. These modifications impact directly, the statutory bundle of the company mentioned in the Company field, on the account selected in the field Account, and with the partner identified in the Partner field.

   The amount to be added can be indicated either in the consolidation currency (first line of the Amount field), or in the local currency of the company (second line of the Amount field). Conversion to the consolidation currency will be carried out automatically if you choose to correct the amount in the local currency.

  Note:  After modifying a statutory bundle to correct intercompany differences, we strongly advise that you carry out a new validation of the statutory bundle.

Generate Group Adjustment

The second way to correct an intercompany difference is generating an adjustment. The basic parameters to define are identical to those of the Update Bundle option, namely: the company in which the adjustment will be booked (Company), the account to be adjusted (Account), the partner of the transaction (Partner) and finally the amount to be adjusted (Correction), either in consolidation currency or in local currency.

There are three types of adjustments. Select one of them:

• - used for transferring the difference amount from the group transactions towards the out-of-group, or vice versa. Financial Consolidation generates an automatic adjustment.

• - used for reclassifying the difference found on an intercompany P&L account to a currency translation difference account. By definition this type of adjustment can only be used for a reclassification from a P&L account.

• - used for booking the difference found on an intercompany Balance Sheet account to a translation difference account. The difference will be booked in P&L for the current period, and the adjustment will be counter passed during the next period. By definition, this type of adjustment is only allowed for a reclassification from a Balance Sheet account.

Set up adjustments

To set up these Adjustments, click to redirect you to the Custom Events page. On this page, you will be able to modify the “Posting journal” of the “IC-915-1”, “IC-915-2” and “IC-915-3” eliminations.



• Set up the adjustments and click .

• When you have finished on this page, click to close this window and return to the main page.

Print intercompany differences or matched transactions

On the Intercompany Matching page, click to open the Report page and print the intercompany differences or the matched transactions identified during the last Intercompany Matching /Reconciliation process. In order to obtain an up-to-date report with the intercompany differences, it is imperative that you do the reconciliation before viewing the report.

The page automatically identifies and displays the Companies on left-side panel, and on the right-side panel, the rules of intercompany matching for which differences or the matched transactions have been identified.

1. Select one or more companies. If you want to select all lines, then click in the checkbox at the top of the list.

2. Select the criteria to create the report. In the Filter section, you will see the conditions used to run the reconciliation — Unmatched Transactions, Matched Transactions, and Merge Debit/Credit.

3. Next, for the selected companies, two options are possible:

   • Within selected companies - to print out a report that will list all differences within only the selected companies and rules.

   • Within any other company - to print out a report that will list all differences related to the selected companies, regardless of where these differences come from (selected /non-selected companies).

4. In the File type field, select the output file type. Options include PDF, XLS, and XLSX.

5. Click to generate the report. After the report is generated, a download link appears below for you to click and view it in the file type selected.

6. Click to close this window and return to the Intercompany Matching page.

Examples of reasons for intercompany matching

  Example:  Invoice not booked in partner’s accounts

  Example:  Currency translation on intercompany translations

  Example:  Two companies closing their fiscal year at different dates