Managing intercompany transactions can be complicated, time consuming and let’s be honest, downright frustrating! This post explores how implementing some best practices and cloud accounting software Sage Intacct can make the process easier…
If you’re new to managing intercompany transactions, let’s start with an overview of what they involve.
Intercompany transactions are essentially a transaction between different companies that fall under the same parent company or holding company, or they can be between different departments within one company.
A commonplace practice in multinational organisations, examples of intercompany transactions include one department selling merchandise to another department, or the parent company lending a sum of money to one of its’ subsidiaries.
Often, the multi-currency and multi-entity requirements of managing this complex process throws up a series of challenges, including the following.