Best-in-Class Intercompany Reconciliation Process

Leveraging state-of-the-art applications for a faster close

The purpose of account reconciliation is to ensure account balances are correct between two accounts at the end of a closing period.

Companies must reconcile all balance sheet accounts that could contain a significant or material misstatement. Doing so allows entities to identify and post all necessary adjustments to the general ledger in a timely manner, ensuring completeness and accuracy.

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The critical steps to avoid a shipwreck and achieve a faster closing process

Typical situation

Many organisations are unable to complete the reconciliation process in a timely manner, which introduces risk.

The process is often manual, with a suboptimal controlling environment, which also causes major risks of misstatement.

How it works

The intercompany reconciliation process typically follows these steps:

  • Comparison of account balances between various independent systems
  • Verification of statements and reports for accuracy and investigation of discrepancies where identified
  • Taking action to correct these identified discrepancies
Operational controls
  • Segregation of duties reinforced with structured review and approval process for strict financial control and management of GL accounts
  • Section 404 of SOXCOSO Framework assessment of internal controls over financial reporting
  • Monthly checklists to ensure all reconciliations are complete and approved
  • Logging of queries, issues and corrections, aged and escalated if required

What makes intercompany reconciliations so painful?

Key challenges

International firms across the globe and industries have different organisational structures and subsidiaries. It is vital to look at the key challenges the company will face and how a robust intercompany reconciliation process can help to solve the discrepancies between subsidiaries during daily or closure activities.

The nature of such discrepancies could vary a lot across various industries due to the nature of their business, and the root cause of these is due to:

  • Lack of control: decentralised data sources, sub-ledgers, data formats, multiple accounts, contributors and tasks — these are just a few factors complicating balance sheet accounts.
  • Prone to error: data decentralisation, segregation of duties and lack of controls tend to lead to increased vulnerability to errors and, as a consequence, lack of trust in the reported figures.
  • Manual effort: intercompany reconciliation processes, especially in global enterprises, involve thousands of reconciliations across different locations and business units.

Benefits of a tool: “close to disclose” in a centralised solution

There are several tools available on the market that enable companies to load, match and reconcile their intercompany transactions:

  1. Built-in functionalities in the ECC and S/4HANA systems (e.g. SAP ICR, SAP S/4HANA ICMR which can leverage either accounting data directly setup in S/4HANA or documents replicated in real-time within SAP S/4HANA Central Finance).
  2. EPM software platforms (e.g. CCH Tagetik, OneStream, etc.)
  3. Stand-alone, ‘agnostic’ intercompany solutions (e.g. BlackLine, SmartClose, etc.)
Best-in-class intercompany reconciliation process


The market solutions meet industry requirements and accelerate intercompany reconciliation processes

Contact us

Albert Fässler

Albert Fässler

Partner, Technology Consulting, PwC Switzerland

Tel: +41 58 792 23 22

Murugananth  Chockalingam

Murugananth Chockalingam

Partner, Advisory, PwC Switzerland

Tel: +41 58 792 4633

Alberto  Della Santina

Alberto Della Santina

Director, Advisory, PwC Switzerland

Tel: +41 58 792 49 50

Jozsef Csoka

Jozsef Csoka

Director, Advisory, PwC Switzerland

Tel: +41 58 792 75 16