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What is the frequency at which key reconciliations should be performed? What are reconciling items and how are they classified? How do you reconcile a supplier statement to the AP ledger? What is the GR/IR reconciliation and why does it matter? How does automation (reconciliation software) improve the process? How do you reconcile accounts receivable to revenue? What is a three-way reconciliation (e.g., for trust/client accounts)? What makes a reconciliation 'review-ready' for audit? How do you reconcile petty cash and expense floats? What is the account reconciliation process at month-end close?
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Accounts Payable & Receivable › Reconciliations

How do you reconcile intercompany AP/AR balances?

Intermediate

Answer

Intercompany reconciliation matches what one group entity owes (AP) against what the counterparty entity is owed (AR); they should mirror each other. Differences from timing, FX, disputes, or missed postings are identified and resolved before consolidation so intercompany balances eliminate cleanly and don't distort group results.
Real-world example Before consolidation, Entity A's $80k payable to Entity B is matched to B's receivable; a $3k timing gap is aligned.

Common follow-ups: Why must intercompany balances mirror? | What happens if they don't eliminate?

Reconciliations Aging Analysis Vendor Management
All 23 Reconciliations questions