Intercompany accounting covers transactions between legal entities within the same corporate group. Each transaction must be recorded in both entities' books, the corresponding balances reconciled, and any amounts due settled. During consolidation, intercompany transactions and balances are eliminated so the group doesn't report transactions with itself.
The principles are straightforward. The execution is far more complicated. Every pair of entities introduces another relationship to reconcile, often involving different accounting teams, currencies, and systems. Differences that aren't resolved before consolidation can lead to elimination discrepancies and delays in the close.
This guide explains the common types of intercompany transactions, journal entries with worked examples, classification and foreign exchange treatment, eliminations, and how intercompany accounting works in NetSuite. It also covers the supporting documentation needed to make each entry accurate and auditable.
Consider a common scenario: a parent company pays an expense on behalf of a subsidiary. When the transaction originates and remains within a properly configured ERP, much of the accounting can be automated. NetSuite, for example, can record both sides of qualifying intercompany transactions, revalue outstanding balances, net eligible amounts, and eliminate designated entries during consolidation.
The harder problems arise when transactions originate outside the ERP or require additional investigation. A parent might process payroll for employees across three subsidiaries. Thousands of ledger lines may need to be classified before the team can determine which entity owes what. Or an intercompany payment might arrive several days late, with a small difference caused by bank fees or foreign exchange movements. These are the situations that consume accounting teams' time, create reconciliation discrepancies, and delay the month-end close.
Key takeaways:
ERP intercompany frameworks can automate transactions that originate inside the ERP. Activity that arrives from a payroll system, a bank or another ledger is where the manual work remains: producing the intercompany journal and the classification behind it.
Intercompany work passes through three stages: the ERP's own intercompany framework, a preparation and matching step that builds journals and reconciles balances from source data, and downstream consolidation or treasury work that eliminates, translates, nets or settles. Groups on a multi-entity ERP already have the first. The effort usually sits in the second, and consolidation does not remove it.
One of the hardest judgments in intercompany is classification, not arithmetic. Whether a parent-funded cost is a payable the subsidiary repays or a contribution that sits in equity decides the entry, the FX treatment and the elimination.
Maxima prepares intercompany journals across entities and matches and reconciles the balances behind them, so that eliminations, wherever they run, start from reconciled figures. It is not the consolidation engine and does not produce the cash flow statement.
Types of intercompany transactions and the accounting lifecycle
Most intercompany transactions fall into five categories, each with different accounting implications:
Sales of goods or services between entities. One entity invoices another, creating an intercompany receivable and payable. The corresponding revenue and expense must be eliminated during consolidation.
Expenses paid on behalf of another entity. A parent company pays payroll, vendor invoices, or employee expenses for a subsidiary. The subsidiary records the expense, while the parent records the amount owed by the subsidiary.
Cost allocations and management fees. Shared expenses are allocated or charged to the entities that benefit from them, sometimes with a contractual markup.
Intercompany loans, advances, and cash pooling. Funds move between entities, creating intercompany balances that may accrue interest or require foreign currency adjustments.
Capital contributions and dividends. Transactions involving equity rather than ordinary receivables and payables, with different accounting and consolidation requirements.
Regardless of the transaction type or accounting software, the intercompany accounting lifecycle follows the same general process: establish the terms, record the transaction in both entities' books, reconcile the balances, settle or net outstanding amounts where appropriate, and eliminate intercompany balances and activity during consolidation.
Where the manual work remains
Ask a controller at a multi-entity company where their team spends the most time on intercompany accounting, and the answer is unlikely to be recurring management fees. Once configured, an ERP can typically generate both sides of those transactions. The real work begins when transactions originate outside the ERP or lack the information needed to account for them correctly. Three common scenarios illustrate this challenge.
1. Payroll and expenses paid by the parent company
A parent company processes payroll or reimburses expenses for employees across multiple subsidiaries. While the cash leaves the parent's bank account, the expenses belong to the respective subsidiaries.
Accounting teams must extract payroll data, identify which employees and costs belong to each entity, calculate allocations, and prepare the corresponding intercompany journal entries. When employees work across multiple entities or the payroll system doesn't support multi-subsidiary journal entries, much of this work happens manually in spreadsheets.
2. Intercompany transactions without sufficient context
Ledger entries don't always contain enough information to identify the underlying transaction or determine the appropriate intercompany classification. Accountants must investigate source records, identify the relevant entities, and determine how each transaction should be recorded before reconciliation can proceed.
3. Settlement timing and amount differences
Intercompany payments may arrive several days after they're initiated, sometimes with differences caused by bank fees or foreign exchange movements. Accounting teams must investigate these discrepancies, distinguish timing differences from actual errors, and determine whether adjustments are necessary. These scenarios, explored further in our guide to intercompany reconciliation, share a common challenge: the information needed to complete the accounting exists, but it's scattered across systems, source documents, and transaction records.
The ERP can record and reconcile transactions once the necessary information is available. The manual effort lies in gathering that context, determining the correct accounting treatment, and resolving discrepancies.
As companies add legal entities, the number of potential intercompany relationships grows rapidly, increasing the volume and complexity of this work. The challenge is finding a scalable way to connect the underlying data, apply accounting policies consistently, and resolve exceptions without requiring accountants to reconstruct every transaction manually.
Three worked examples
The following three examples illustrate common intercompany accounting scenarios: expenses paid on behalf of another entity, funding transactions that require classification, and cost allocations with contractual markups.
Worked example 1: the parent pays, the subsidiary owns the cost
A US parent runs payroll for the group through one payroll platform, funded from the parent's operating account. The January run is $412,600. The payroll register maps each employee to an entity, except two shared employees, costing $9,000 and $12,000 for the run, who are split 70 percent to Subsidiary A and 30 percent to Subsidiary B. Their $21,000 has to be divided before any entity total exists:
Entity | Employees assigned directly | Share of the two shared employees | Total for the run |
|---|---|---|---|
Parent | $214,900 | $0 | $214,900 |
Subsidiary A | $113,600 | $14,700 | $128,300 |
Subsidiary B | $63,100 | $6,300 | $69,400 |
Total | $391,600 | $21,000 | $412,600 |
Cash left only the parent's bank account, but the expense belongs to three entities. Recording it therefore takes intercompany accounting journal entries across all three books. Assume in this example that the payroll provider draws the full $412,600 from the parent on the pay date. If employee withholdings are remitted later instead, that portion remains a payroll liability until payment.
Parent:
Account | Debit | Credit |
|---|---|---|
Salaries expense | $214,900 | |
Intercompany receivable, Subsidiary A | $128,300 | |
Intercompany receivable, Subsidiary B | $69,400 | |
Cash | $412,600 |
Subsidiary A:
Account | Debit | Credit |
|---|---|---|
Salaries expense | $128,300 | |
Intercompany payable, Parent | $128,300 |
Subsidiary B:
Account | Debit | Credit |
|---|---|---|
Salaries expense | $69,400 | |
Intercompany payable, Parent | $69,400 |
In this example, employer taxes and benefits follow the same entity allocation, so the register produces a set of these lines for each cost element. In a multi-subsidiary ERP the three entries above can be a single advanced intercompany journal with lines in each subsidiary, balanced per subsidiary. The reviewer then sees one transaction and one audit record rather than three entries that were supposed to agree.
What the preparer needs from software here is not the debit and credit but the work around it. The register has to be read, the entity mapping and split rules applied, the detail summarized to the level the group books at, and the multi-entity entry produced every pay run without anyone rebuilding the split by hand. The definitive guide to journal entries covers the support any entry should carry; what intercompany adds is in the packet section after the four examples.
Worked example 2: payable or contribution, and the lookup that gets it wrong
In this intercompany accounting example, the hard part is a decision, not a calculation. A project entity's January ledger shows two lines funded by the parent. One is an $86,400 hosting invoice the parent paid on the entity's behalf. The other is $1,350,000 of equipment spend that the parent funded and the entity capitalized as construction in progress. Both lines are intercompany, and they are not the same kind.
The group has a written rule. It is a company policy drawn from the funding agreements, not a GAAP rule, and an auditor tests it against those agreements and the substance of each funding. The agreements make operating advances repayable and capital funding equity, so the rule can be expressed by account. Lines hitting operating expense accounts are intercompany payables the entity repays or nets; lines hitting construction in progress or fixed asset accounts are contributions to its equity. The account is a proxy for the agreement, and it holds only while the agreements keep saying the same thing.
Under that rule the two lines end in different entries.
Hosting invoice, operating spend:
Entity | Account | Debit | Credit |
|---|---|---|---|
Project entity | Hosting expense | $86,400 | |
Project entity | Intercompany payable, Parent | $86,400 | |
Parent | Intercompany receivable, Project entity | $86,400 | |
Parent | Cash | $86,400 |
Equipment funding, capital spend:
Entity | Account | Debit | Credit |
|---|---|---|---|
Project entity | Construction in progress | $1,350,000 | |
Project entity | Capital contribution from Parent | $1,350,000 | |
Parent | Investment in Project entity | $1,350,000 | |
Parent | Cash | $1,350,000 |
In this group's process, both lines initially arrive on the project entity's books in intercompany payable. Classification leaves the $86,400 hosting line there but reclasses the $1,350,000 equipment funding: debit intercompany payable, Parent; credit capital contribution from Parent. The parent moves the same amount from its receivable to its investment account. This is the decision the team in the second pattern could not make until it had found, by hand and one line at a time, the activity behind each line.
Suppose, though, that the $86,400 first hit construction in progress on January 12, because the invoice was coded to the project, and was reclassified to hosting expense on January 28 when someone noticed. A rule that reads the first posting classifies it as a contribution; one that reads the line's final account gets it right. An amount-and-location lookup fails too, because it finds a row, not what happened to it. To know the final account at all, the rule has to read the line's history, not a snapshot of its first posting.
The payable and the contribution then travel differently through the close. The payable is reconciled, settled or netted, and eliminated against the receivable. The contribution is eliminated at consolidation, the parent's investment against the subsidiary's equity, and once reclassified it drops out of the intercompany balance confirmation.
If the funding crosses currencies, the FX treatment follows the classification, and there are three cases, not two:
A payable settled in the ordinary course is a monetary balance. The entity holding it in a foreign currency brings it to the current rate each period, with the difference in earnings.
A loan or advance whose settlement is not planned or anticipated in the foreseeable future is still an intercompany balance, but of a long-term-investment nature. In the consolidated statements its exchange differences are reported with translation adjustments in equity under ASC 830-20-35-3(b) rather than in earnings. In the standalone statements of the entity holding the foreign-currency balance, the difference still goes to earnings; the reclassification is a consolidation step.
A contribution is no longer a monetary receivable or payable once it is recorded as equity, so it is not remeasured. At consolidation it is translated at the historical rate of the contribution date.
Worked example 3: cost-plus recharges across project entities
The recharge with a markup is an obvious candidate for automation: its inputs change every month, while its rules change only when a contract does. Costs accumulate in one operating entity and are billed back to project or service entities under contracts that each prescribe what is included and at what markup. It is an allocation, an intercompany transaction and a transfer pricing position at once.
An operating company incurs $244,000 of site operating cost in January for three project entities, covering maintenance, insurance and audit fees. The cost driver attributes $96,000 to Project 1, $84,000 to Project 2 and $64,000 to Project 3, and each contract sets its own terms:
Project | Share of cost | Excluded by contract | Recharge base | Markup | Recharge |
|---|---|---|---|---|---|
Project 1 | $96,000 | None | $96,000 | 8% | $103,680 |
Project 2 | $84,000 | Audit fees, $6,000 | $78,000 | 8% | $84,240 |
Project 3 | $64,000 | Insurance, $4,000 | $60,000 | 5% | $63,000 |
Total | $244,000 | $10,000 | $234,000 | $250,920 |
The $10,000 of excluded cost stays in the operating company as unrecovered cost, and $16,920 of the recharges is markup.
Entity | Account | Debit | Credit |
|---|---|---|---|
Operating company | Intercompany receivable, Project 1 | $103,680 | |
Operating company | Intercompany receivable, Project 2 | $84,240 | |
Operating company | Intercompany receivable, Project 3 | $63,000 | |
Operating company | Recharge revenue | $250,920 | |
Project 1 | Site operating expense | $103,680 | |
Project 1 | Intercompany payable, Operating company | $103,680 | |
Project 2 | Site operating expense | $84,240 | |
Project 2 | Intercompany payable, Operating company | $84,240 | |
Project 3 | Site operating expense | $63,000 | |
Project 3 | Intercompany payable, Operating company | $63,000 |
Some groups credit the cost element of the recharge against the operating company's expense and take only the markup to income; the intercompany mechanics are the same. At consolidation the recharge revenue and the site operating expense eliminate against each other, and the receivables against the payables, under ASC 810-10-45-1. Where a project entity capitalizes the recharge, the markup is intra-entity profit in an asset the group still holds and must be eliminated as well.
Whether 8 or 5 percent is an arm's-length price under the OECD Transfer Pricing Guidelines, or the local rules that apply, is the tax team's conclusion. The entry should reference the intercompany transfer pricing support. The software applies the rate each contract states; it does not choose it.
For software, the point is that the markup, the exclusions and the driver are terms attached to each contract, applied to each month's cost population. A tool that stores the rule prepares the ten lines above from the cost ledger; a tool that stores last month's entry repeats it. The distinction between a recurring entry and a recalculated one is the subject of the journal entry automation guide
Intercompany classification and foreign exchange treatment
Correctly classifying intercompany balances is essential to an accurate month-end close. Whether a transaction represents a short-term payable, a long-term advance, or a capital contribution determines how it is reconciled, eliminated during consolidation, and treated for foreign exchange (FX) purposes.
When intercompany transactions involve different currencies, the accounting treatment depends on the nature of the balance. There are three common scenarios:
Short-term intercompany payables and receivables. Balances expected to be settled in the ordinary course of business are monetary items. When denominated in a foreign currency, they must be remeasured at the current exchange rate each reporting period, with resulting gains or losses recognized in earnings.
Long-term intercompany loans and advances. When settlement is neither planned nor anticipated in the foreseeable future, an intercompany balance may qualify as being of a long-term-investment nature. Under ASC 830-20-35-3(b), the related foreign exchange differences are included in cumulative translation adjustments within equity in the consolidated financial statements, rather than earnings. However, in the standalone financial statements of the entity holding the foreign-currency balance, those differences are still recognized in earnings. The adjustment to equity occurs during consolidation.
Intercompany capital contributions. Once funding is classified and recorded as equity, it is no longer a monetary receivable or payable and is not subject to periodic foreign currency remeasurement. For consolidation purposes, the contribution is translated using the historical exchange rate on the contribution date.
These distinctions matter because two intercompany balances involving the same entities and currencies can require entirely different accounting treatments depending on their underlying purpose and expected settlement. For a worked example of foreign currency remeasurement, including a cash pool balance spanning a month-end close, see our guide to intercompany reconciliation.
Eliminations and where consolidation begins
Intercompany accounting and financial consolidation serve different purposes. Intercompany accounting prepares journal entries and reconciles balances at the transaction level, ensuring that the figures entering consolidation are accurate and confirmed.
Intercompany eliminations remove balances and transactions between entities within the same group, including intercompany receivables and payables, revenue and expenses, the parent's investment against the subsidiary's equity, and unrealized profits held in assets. These eliminations may run through NetSuite's period close, a consolidation platform, or dedicated journal entries. However, eliminations rely on the underlying accounting being correct. They cannot identify transactions that haven't been classified or correct a payable that should have been recorded as a capital contribution. The consolidation system remains responsible for the group roll-up, currency translation, and consolidated financial statements, including the cash flow statement.
Getting intercompany accounting right before consolidation reduces the need for last-minute investigations and adjustments. When transactions are reconciled across entities and intercompany cash flows are identified, the consolidation process can eliminate those flows accurately and produce reliable financial statements. Our guide to financial consolidation covers the process in more detail.
Whatever software runs it, the intercompany lifecycle has the same parts. An agreement sets the terms, both entities book the transaction, the balances are reconciled, settlement or netting happens where it applies, and the reciprocal balances and activity are eliminated in consolidation. The guide to intercompany transactions covers the transaction types and the lifecycle in full.
Intercompany accounting in NetSuite
What NetSuite handles natively
NetSuite OneWorld provides several capabilities for managing intercompany transactions, including journal entries, netting, allocations, and eliminations.
Advanced intercompany journal entries. Since release 2018.1, new OneWorld accounts generally use advanced intercompany journals instead of legacy intercompany journals, unless the Intercompany Time and Expense feature is enabled. A single advanced intercompany journal can include lines across multiple subsidiaries, with debits and credits balanced for each subsidiary. When Automated Intercompany Management is enabled, the Auto Balance function adds balancing lines using the configured intercompany receivable and payable accounts. This is how the payroll allocation in worked example 1 can be recorded.
Intercompany netting. NetSuite's Intercompany Framework supports netting mutual receivables and payables between subsidiaries. Transactions must be matched and linked, with corresponding amounts on both sides. Each subsidiary must also be represented as a customer and vendor in the counterparty's records. Netting offsets qualifying balances and generates settlement transactions, reducing the number of open items at period-end.
Intercompany allocation schedules. NetSuite can distribute shared expenses, such as rent, across subsidiaries using percentages, fixed values, or statistical account balances. Each destination subsidiary receives an advanced intercompany journal. However, standard allocation schedules do not provide the contract-specific markups and exclusions required for the cost-plus recharges in worked example 3.
Automated intercompany eliminations. During period close, NetSuite generates elimination journals for transactions and journal lines flagged for elimination. Intercompany invoices and bills are flagged automatically, while advanced intercompany journal lines can carry the Eliminate flag. Qualifying elimination entries for intercompany receivables and payables are automatically reversed in the following period.
There are important limitations. NetSuite does not generate eliminations for advanced intercompany journals posted to future periods, and its elimination process only handles transactions that have been correctly identified and flagged. It cannot correct an incorrectly classified transaction or identify missing intercompany activity.
NetSuite's 2026.1 release also introduces improvements to elimination traceability, including links between balance sheet elimination entries and their source transactions, along with an intercompany elimination dataset in SuiteAnalytics Workbook. These changes improve visibility without changing the underlying elimination process.
What still requires manual preparation
While NetSuite handles many intercompany accounting mechanics, several activities still require additional preparation, integrations, or custom workflows:
Preparing multi-entity journals from external data. Third-party payroll registers must be converted into subsidiary-level journal entries through imports, integrations, or custom workflows.
Classifying intercompany transactions. NetSuite's standard framework does not automatically determine whether a transaction is a payable, capital contribution, or another funding arrangement based on its posting history.
Reconciling across ERP systems. A single NetSuite instance does not natively reconcile intercompany transactions against detailed records maintained in another ERP.
Accounting for cash pool activity. Bank feeds can import cash pool transactions, but the intercompany framework does not automatically classify those movements and generate the corresponding entries by counterparty.
These gaps are particularly relevant to the payroll allocation example above and the ledger classification and cash pooling scenarios covered in our guide to intercompany reconciliation.
The priority is ensuring that transactions originating outside NetSuite are correctly classified, allocated, and supported before they reach the ERP. The resulting advanced intercompany journals should balance by subsidiary, carry the appropriate elimination flags, and include the applicable exchange rates and supporting documentation.
What supporting documentation should intercompany entries include?
Intercompany transactions create a particular challenge for reviewers: the accountant approving an entry in one entity may not have access to the underlying records in the other.
Each intercompany entry should therefore include enough supporting documentation to verify the transaction, its accounting treatment, and the corresponding balance in the counterparty's books.
Transaction type | Supporting documentation | Reconciliation evidence |
|---|---|---|
Parent-paid payroll or expenses | Payroll register or expense report, entity mappings, and allocation rules for shared employees | Subsidiary payable agrees with the parent's receivable |
Classified intercompany transactions | Final account classification, applicable accounting rule, and supporting funding agreement | Payables agree with counterparty receivables; contributions reconcile to investment and equity records |
Cash pooling | Bank statements, cash sweeps, interest, settlement details, exchange rates, and balance rollforwards | Subsidiary balances agree with the corresponding parent balances after appropriate currency translation |
Cost-plus recharges | Cost ledger, allocation drivers, contractual markups, and excluded expenses | Project entity expenses agree with the operating company's recharge amounts |
The goal is to make every entry independently reviewable. A reviewer should be able to trace the transaction to its source, understand the calculations and accounting treatment, and confirm that both entities recorded the corresponding amounts correctly.
Supporting documentation should also establish that the journal entry posted to the ERP matches the entry that was approved. Comparing the approved workpaper against the posted ERP transaction, line by line, provides a deterministic check that the preparation and posting are consistent. Without this evidence, reviewers may need to repeat much of the original preparation work to validate the entry.
Intercompany accounting checklist
A reliable intercompany close requires clear ownership of the following activities each month:
Prepare intercompany journal entries using source data from payroll systems, bank statements, contracts, and other ledgers.
Classify transactions correctly according to the group's accounting policies, and flag items requiring further investigation.
Apply the appropriate exchange rates and document the rate, source, and effective date.
Reconcile transactions across entities, including those operating in different ERP systems.
Track outstanding differences with their age, status, and assigned owner.
Prepare settlement and netting entries, accounting for timing differences, bank fees, and foreign exchange movements.
Perform eliminations using confirmed balances, resolving discrepancies before consolidation.
Maintain a complete audit trail connecting source transactions, calculations, accounting rules, approvals, and posted journal entries.
Assigning clear ownership to these activities helps accounting teams resolve intercompany discrepancies before they delay consolidation and the month-end close.
How Maxima automates intercompany accounting
Whether entities operate in the same ERP or across different systems, Maxima's accounting agents can automate much of the preparation work involved in intercompany accounting.
The process starts with the accounting team's existing procedures, including source systems, classification rules, exchange rate policies, and journal entry templates. Maxima retrieves the relevant data, presents an execution plan for review, and prepares supporting workpapers with formulas that accountants can inspect and validate. Journal entries are routed for approval before posting.
Our journal entry automation page explains how this process works, including currency schedules, balance rollforwards, and FX calculations. For intercompany accounting, the critical step is applying the group's policies to determine how each transaction should be classified and recorded.
Classifying intercompany transactions
Accurate classification starts with understanding the underlying transaction. When a ledger line lacks sufficient context, Maxima can investigate the originating bill, bank transaction, or journal entry, along with its internal ID, project or location codes, and posting history.
Using the group's documented accounting policies, Maxima can then classify transactions as intercompany payables, capital contributions, or other applicable categories. For example, a rule may classify operating expenses as repayable balances and capital expenditures as equity contributions, provided that treatment is consistent with the group's funding agreements.
The resulting workpaper documents the final account classification, the rule applied, and the proposed journal entry. Transactions that cannot be classified confidently are flagged for accountant review, allowing the team to focus on exceptions rather than reviewing every line manually.
Where accountants retain control
Accounting judgment remains essential, particularly when transactions fall outside established rules.
Accountants define the policies Maxima applies, including how the organization distinguishes intercompany payables from capital contributions. They also review situations requiring interpretation, such as changes in the nature of a balance, differences between gross and net settlements, conflicting exchange rate sources, or decisions to settle, write off, or carry forward outstanding balances.
Maxima handles the preparation and execution of defined workflows, while accountants retain responsibility for accounting policies, exceptions, and approvals. This division of responsibilities extends across the broader close, as explained in our guide to record-to-report automation.
What Maxima automates
Maxima connects directly to the financial systems involved in intercompany accounting, including ERPs, banks, payroll providers, and billing platforms, through more than 100 integrations. Teams can also upload files when direct integrations are unavailable.
By bringing source data together in one workspace, Maxima prepares intercompany journal entries, matches transactions across entities, and reconciles balances before consolidation. The existing ERP remains the system of record, while Maxima automates the accounting work leading up to it.
Four capabilities are particularly relevant to intercompany accounting:
1. Journal entries prepared from source data
Maxima prepares recurring intercompany journal entries directly from bank feeds, payroll exports, and other source records. For example, teams can configure rules to identify intercompany cash movements, calculate foreign exchange amounts, and populate advanced intercompany journal templates with the appropriate accounts, entities, and dates.
Once approved, entries can post directly to NetSuite through Maxima's native integration, with supporting documentation linking each journal line to its underlying source transactions.
2. Transaction matching across entities and ERPs
Maxima reconciles intercompany transactions even when counterparties record them differently or operate in separate ERP systems. Before matching, it can standardize data through currency conversion, account mapping, lookups, and sign adjustments. Matching can span three or more systems, while approved rules execute deterministically to produce consistent results.
This allows accounting teams to reconcile intercompany activity in a single workspace without consolidating every entity onto the same ERP.
3. Agent-led preparation with human oversight
For transactions requiring additional investigation, Maxima's accounting agent, Max, can propose an execution plan before proceeding. Max applies the organization's documented accounting policies, investigates source records, and prepares proposed journal entries with supporting workpapers. Transactions that fall outside established rules are escalated for accountant review.
Entries follow defined approval workflows, with a named reviewer responsible for approving the work before posting.
4. Auditable workpapers and reconciliations
Maxima prepares supporting workpapers, including intercompany balance reconciliations, rollforwards, and FX schedules, using formulas accountants can inspect and re-perform. Teams can continue working with their existing Excel or Google Sheets templates, preserving familiar review processes while automating data preparation and calculations.
Where eliminations are recorded through journal entries, Maxima can also prepare those entries using reconciled intercompany balances.
Built for complex, multi-entity accounting
Maxima supports accounting teams managing large numbers of legal entities, currencies, and financial systems.
Zendesk manages a close spanning more than 25 legal entities, maintaining public-company-level controls after going private. Its team uses Maxima for journal entry preparation, reconciliations, transaction matching, and flux analysis.
Roofstock manages approximately 50 legal entities across four to five ERPs following its merger with Mynd.
Rippling uses Maxima to automate bank journal entries across more than 50 active entities.
For these organizations, the opportunity extends beyond automating individual journal entries. By connecting source systems, applying accounting policies consistently, and reconciling transactions before consolidation, Maxima helps accounting teams manage increasingly complex intercompany workflows without adding equivalent manual effort.
FAQs
What is intercompany accounting?
Accounting for transactions between legal entities in one group means booking each one on both sides, checking that the sides agree, settling where settlement is due, and removing the transaction from the consolidated statements. Crossing an entity boundary can also bring currency, tax and cutoff considerations.
What is an advanced intercompany journal entry?
In NetSuite OneWorld, an advanced intercompany journal entry is a single journal transaction that carries lines in more than one subsidiary, with debits and credits required to balance within each subsidiary. It is the transaction type a parent-paid payroll or expense pushdown lands in when it is recorded as one entry. Its lines can be flagged for elimination, so NetSuite's Automated Intercompany Management generates the elimination at period close.
What FX rate applies to an intercompany transaction?
Under ASC 830-20-30 the transaction is measured at the exchange rate on the transaction date. Under ASC 830-20-35 an open monetary balance denominated in a currency other than the entity's functional currency is brought to the period-end rate, with the difference in earnings. Settling at a rate other than the carrying rate produces a realized gain or loss, also in earnings. For a qualifying intra-entity balance of a long-term-investment nature, where settlement is not planned or anticipated in the foreseeable future, the consolidated statements report the exchange differences with translation adjustments in equity instead. Software should record the rate, its source and its date on the entry.
What is the difference between intercompany accounting and consolidation?
Intercompany accounting prepares the journals and reconciles the balances between entities. Consolidation translates entity statements, rolls up the group and produces the consolidated statements, and some platforms span parts of both. When the two sides do not agree, a consolidation system may route the residual to a configured difference account or require resolution before elimination. Either way, it does not explain the underlying gap.
What is an intercompany payable?
An intercompany payable is what one entity owes another in the same group: a management fee invoiced, a cost paid on its behalf, an intercompany loan it received, or cash advanced to it by the pool header. The counterparty carries the mirror image among its intercompany receivables, and the two must reconcile on a common basis at each close and cancel at consolidation. Whether a parent-funded amount is a payable at all, or a contribution to equity, depends on the funding agreement and its substance as the group's policy applies them, and the classification should be resolved before the close.
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