Intercompany journals at month-end without the spreadsheet panic

Intercompany journals are the silent failure mode in mid-market group accounting. They start small — a management fee from holdco to opco, a recharge for shared services — and quietly grow into a parallel ledger maintained in Excel by whoever is closest to the keyboard. By the time the auditor asks for the intercompany reconciliation, the spreadsheet has its own internal politics.

Sage Intacct's intercompany functionality is designed to eliminate this entirely. Set it up correctly during implementation, and intercompany journals stop being a month-end ritual; they become routine ledger activity.

The foundation — inter-entity AR and AP accounts

Every entity in a Sage Intacct group has dedicated inter-entity AR and inter-entity AP accounts, configured per counterparty entity. When you record a journal from entity A to entity B, Sage Intacct automatically posts:

• In entity A: debit to expense (or whatever the substance is), credit to inter-entity AP (B).
• In entity B: debit to inter-entity AR (A), credit to revenue (or whatever the substance is).

Both sides match by design, both sides have audit trail, and on consolidation the inter-entity AR (A) and inter-entity AP (B) eliminate against each other. No spreadsheet required.

Recurring allocations — automate them

If the same intercompany journal posts every month — management fees, shared service centre recharges, group insurance allocations — configure it as a recurring journal. Sage Intacct generates and posts the journal on schedule, with the matching automatic. Your finance team does not re-key it.

For more complex allocations (cost pools split across entities by headcount or revenue ratios), Sage Intacct's allocation engine handles the calculation each period and posts the journals.

The matching report — your early warning system

Sage Intacct's intercompany matching report flags any unmatched balances between paired entities. We recommend running this on day three of the close — early enough to investigate and correct, late enough that all routine activity has posted. The report should be clean by day five.

Eliminations on consolidation

On consolidation, the inter-entity AR and AP accounts eliminate. Intercompany revenue eliminates against intercompany expense. The eliminations apply automatically, with a visible elimination ledger your auditor can review.

If your finance team is posting manual eliminations on top of the consolidation engine, something is misconfigured. Investigate before year-end.

Cross-border intercompany — currency and tax

For SA groups with offshore subs, intercompany journals cross currencies (e.g. ZAR holdco recharges USD sub for a management fee). Sage Intacct handles the FX translation on both sides at the appropriate rate. The transfer pricing dimension — whether the recharge meets arm's-length pricing — is a tax and policy question, not a software question, but the system supports good documentation of the rate, the rationale, and the period.