At the end of the period (typically monthly), these accounts are netted out during the close process. The key to these accounts is that when combining or consolidating the financials, these intercompany account balances must be eliminated.
Many companies struggle with the intercompany reconciliation process, often experiencing high-dollar out-of-balances and/or lengthy month-end closes in order to research the differences. Oftentimes, these out-of-balances start with small dollars, but if proper controls aren’t put into place, the dollar amount continues to grow until it becomes a problem. For companies with multiple systems (general ledger or sub-ledger), the process of identifying differences is arduous.
BlackLine Systems has the ability to quickly highlight the out-of-balance condition, giving management a chance to address it before it gets out of hand. Data from multiple systems can be merged to help alleviate some of the challenges around trying to reconcile intercompany accounts, especially if they contain high volumes of intercompany transactions. BlackLine’s Account Reconciliations module streamlines the process, providing companies with a more efficient mechanism for performing these reconciliations.