Counterparty
Definition
The other group company in an intercompany balance or transaction.
Why does it matter in a group?
Intercompany balances are compared pair by pair, so every entry needs the right counterparty. A balance booked against the wrong sister company shows as a difference in two pairs at once, which makes it hard to find. Ask each company to report its balances by counterparty and in the transaction currency, and compare as in an intercompany reconciliationIntercompany reconciliationComparing what each group company records with its counterparties and explaining every difference.Open the glossary entry.
A small example
Zenvara shows GBP 1,240,000 due from Fernhollow. Fernhollow booked its payable against Kestrelwick by mistake. The Zenvara and Fernhollow pair shows a difference of 1,240,000, and the Fernhollow and Kestrelwick pair shows (1,240,000). They cancel in total, but they are two open items until the coding is fixed.