Intercompany reconciliation is the process of matching transactions between legal entities that share common ownership or control, so that both sides of each intragroup transaction agree before the group's accounts are consolidated. Because these transactions are internal movements rather than economic activity with third parties, they must be eliminated on consolidation. If they don't agree, elimination leaves a residual difference that overstates or understates group revenue, expenses, assets or liabilities.

The causes are structural rather than arithmetic. The most common is a timing difference: one entity posts an invoice in one period and the counterparty posts it in the next, leaving the ledgers legitimately out of step. Others include currency translation mismatches, where two entities record the same transaction at different rates or on different rate dates; period cut-off differences; inconsistent charts of accounts or entity coding; differing accounting policies between entities; and straightforward data entry error.

An elimination is the consolidation entry that removes an intragroup transaction from the group accounts, so that internal activity doesn't inflate consolidated results. A sale from one subsidiary to another is revenue for the seller and cost for the buyer, but from the group's perspective nothing has been sold externally, so both sides are removed. Eliminations only work cleanly if both sides already agree, which is why reconciliation comes first.

No. Aurum does the reconciliation work that has to happen before consolidation: pulling balances from every entity, matching both sides, categorising differences and getting them resolved with an audit trail. Your consolidation or ERP system still performs the elimination and produces the group accounts. The value is that it receives balances which already agree, so eliminations are mechanical instead of a month-end investigation.

Aurum reconciles and evidences intercompany positions, and produces the adjustment journals that follow. It doesn't generate payment instructions or run multilateral netting across cash pools. If netting is a requirement, Aurum gives your treasury team reconciled, agreed balances to net from, which is usually the missing input rather than the netting itself.

Aurum reconciles intercompany transactions and surfaces variances between what was charged and what was recognised, including differences against the transfer price you expect. It doesn't calculate transfer prices or produce transfer pricing documentation. What it does provide is the evidenced, reconciled transaction record that transfer pricing documentation and Pillar Two reporting rely on.

Monthly is the common minimum, but the more useful answer is continuously. Reconciling through the period rather than at the end of it means differences are found while there is still time to correct them at source, so balances already tie out when close begins. Groups that only reconcile at period end tend to discover the same recurring differences every month.

It's the pair of balances recording an amount owed between two entities in the same group: a receivable, or due-from, in one entity's books and a corresponding payable, or due-to, in the other's. In a correctly reconciled group these are mirror images of each other and net to zero on consolidation.

Because it depends on other people. Most reconciliations are performed against an external source that simply arrives, whereas intercompany requires another entity, often in another country and time zone, to have posted the same transaction the same way. When it hasn't, resolution needs a conversation, and those conversations happen in the days you have least to spare.

Spreadsheets can hold the comparison but not the process. There's no automatic pull from each entity's ledger, no consistent mapping between charts of accounts, no record of who agreed what with whom, and no way to separate a timing difference from a real imbalance except by remembering. As entity count grows, the number of pairs to reconcile grows faster than the team, which is why intercompany is usually the first reconciliation to fall behind.