# Intercompany reconciliation

> Comparing what each group company records with its counterparties and explaining every difference.

Source: https://finconsol.com/blog/glossary/intercompany-reconciliation/ (updated 28 October 2026)

## Why does it matter in a group?

Reconciling every month, before the group accounts are built, catches differences while the people who made the entries still remember them. Compare each pair in the transaction currency first, then in the group currency. Differences usually come from timing, rates, coding or a dispute. The agreed amount is then removed with an [elimination entry](/blog/glossary/elimination-entry/), and the rest stays on a list with an owner. See also [in-transit items](/blog/glossary/in-transit-items/) and [counterparty](/blog/glossary/counterparty/). A short list kept from month to month, with an owner and a date on each line, is worth more than a perfect reconciliation once a year.

## A small example

Zenvara's books say GBP 77,377 is due from Palmridge. Palmridge's books say GBP 75,164 is due to Zenvara. The difference of 2,213 is invoice ZI-1182 in transit (1,836) plus a rate difference (377).