more-arw search

Q&A Forum

Intercompany cross-charging options

I am working for a publicly traded company that has a couple of subsidiaries internationally. We charge items to entities that keep their books in another currency and vice versa on monthly basis. Our monthly intercompany cross-charge process has become an issue, in terms of P&L items eliminating, intercompany balances eliminating after conversion. What is the best way of treating the above transactions in the books of the two companies? Can someone share best practices (checklist/template) to follow in this case?

Answers

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Anon
What software packages are in use:
-at the holding company?
-at each subsidiary?
Do you book transactions in each company in both the transaction and reporting currency (e.g. is an US$ interco charge to a EU subsidiary recorded in the EU company in both US$ and EU)?
Do you raise invoices for these charges?
Are you using a multi currency consolidation reporting package that can help manage interco balances?

The software in use may influence the way you manage the interco process.

Process design means a lot if you want to reduce reconciliation conflicts:
How many interco transactions occur each month?
How do you make sure both sides book the transaction in the same period?
How do you prevent/resolve disputes about the charges?

Your feedback may help others answer in a more targeted way.
Regards

Anonymous
(Agent) |

At HQ, we do use multi currency reporting software called EPM for consolidation. Each company record the transcation in local currency and raises invoices on monthly basis. They all use different systems. Thanks

307 views
Products and Companies

Get Free Membership

By signing up, you will receive emails from Proformative regarding Proformative programs, events, community news and activity. You can withdraw your consent at any time. Contact Us.

Business Exchange

Browse the Business Exchange to find information, resources and peer reviews to help you select the right solution for your business.

Learn more

Contribute to Community

If you’re interested in learning more about contributing to your Proformative community, we have many ways for you to get involved. Please email content@proformative.com to learn more about becoming a speaker or contributing to the blogs/Q&A Forum.