Introduction

Intercompany Reconciliation

This is the process by which inter-company accounts should be reconciled and agreed on a monthly basis between the reporting units. It is very important to the integrity of the Group accounts that inter-company accounts are reconciled, especially inter-company receivables and payables. For example, if Unit A invoiced Unit B for $10,000, both units being members of the Group, but Unit B does not book the invoice in the accounting period, then the inter-company receivables and payables will not balance. The Group overall cannot have an inter-company balance with itself, and therefore something has to be done with the net $10,000 inter-company receiveable in the Group accounts. At Group level the accountants will not know whether the difference is a balance sheet effect (not serious), e.g. the $10,000 is stock in transit between Unit A and Unit B and therefore represents an asset to the Group, or whether it is a profit and loss effect (more serious) and therefore needs to be written off in order to avoid overstatement of the Group profit.

For many Groups of companies, huge amounts of time is spent by the Group accountants sorting out such inter-company differences and with considerable risk of mis-statement of the Group accounts. It is therefore very important that each reporting unit reconciles and agrees the inter-company balances with the other reporting unit prior to submission of its figures. The BFC application provides the facility to do this.

> Update Reconciliation Report : The IC Report are based on information that must be ad-hoc refreshed. Please before doing any analysis press this button to update the IC Reports; differently the data could be incomplete. The action takes some seconds only.

The IC Matching is based on the capability for each RU to see the data submitted by other RUs as counterpart.

For security reasons, RU users are expected to have access only to data related to the specific RU they belong to. Therefore, in order to allow users to see other RUs data for IC Marching purposes, data submitted by RU must be "reversed"

The reverse technique is based on an extraction of the cube data, keeping of course all the dimension details, and re-loading the mentioned file into a different cube "reversing" the two dimensions "Reporting Unit" and "IC and Related Parties", that is, loading the RU codes into the IC Party Entity and vice-versa.

The result is that the data submitted by other RUs (which I can't normally see) appear as data "loaded" into my RU, by my counterparts.

The reverse process, of course, works on IC Accounts only. This is what the "Update Reconciliation Report" Procedure is doing.