Reconcile Intra Company Transaction – A summary of the activity

Reconciliation is the process of keeping track of transactions that are posted in multiple finance books. The accounts are tallied periodically to avoid discrepancies while retrieving the statutory financial statements. Reconciliation of finance books is required:

• when receipts or payments for one finance book is made by another finance book,

•  when the purchase or sale of goods is made between finance books

•  when assets are transferred between finance books

•  when surplus funds of one organization unit is used in another  and

• when expenses are incurred or revenue is gained due to transaction between two or more finance books.

You can pass journal vouchers to rectify the discrepancies that have been identified. Reconciliation of “Posting” finance books is mandatory before closing the financial calendar of a company.

This activity allows you to reconcile the account balances of finance books. You can also reconcile the account balances of “Posting” finance books that are located in different organization units of the same company. This activity also allows you to view the balances of the finance books after the reconciliation. You can also create journal vouchers that have to be passed for rectifying any discrepancy.

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