Häufig gestellte Fragen
What exactly does intercompany (IC) mean in the ERP context?
Intercompany — IC for short — refers to business transactions between legally independent companies within the same corporate group, such as goods deliveries, services, loans or licence fees between parent, subsidiary and sister companies. From the individual company's perspective these are normal transactions with a customer or supplier, but from the group's perspective they are internal transactions that cancel each other out. In the ERP system, each company is run as its own client (separate entity), so both sides must be posted consistently and with matching amounts. Intercompany is usually not a separately purchasable module but an end-to-end posting and process capability spanning several areas of the system.
How do I map intercompany postings in an ERP system?
In a multi-client ERP, each group company is run as its own client, and intercompany transactions are marked via dedicated IC accounts and an IC partner indicator so they can be clearly identified later. Ideally, an outgoing invoice from the delivering company automatically triggers the corresponding incoming invoice in the receiving client — this mirrored posting reduces manual effort and avoids discrepancies. Larger systems such as SAP S/4HANA, Microsoft Dynamics 365 Finance, Oracle, Infor or Sage offer native IC logic at varying depths. The specific design varies depending on the group structure, the number of companies and the customizing depth of the respective setup.
Why must intercompany transactions be eliminated in the consolidated financial statements?
In the consolidated financial statements, the group may only report business with external third parties, not transactions between its own units — otherwise it would be presented as larger than it actually is. Internal revenues, receivables, payables and intercompany profits are therefore reversed out. In Germany, the legal basis includes Section 303 of the German Commercial Code (HGB) for debt consolidation (offsetting internal receivables and payables) and Section 304 HGB for the elimination of intercompany profits; in addition there is the consolidation of income and expenses under Section 305 HGB. The prerequisite is cleanly flagged and reconciled IC data, which the ERP system provides.
What is an intercompany reconciliation and why is it important?
Intercompany reconciliation (IC reconciliation) is the process of checking the business transactions posted between affiliated group companies for consistency. It matches open balances between the companies and uncovers discrepancies caused, for example, by differing amounts, posting dates or currency conversions. Reconciliation usually takes place before the individual and consolidated financial statements are prepared, because unreconciled IC balances cannot be cleanly eliminated and delay the close. An ERP with an integrated reconciliation tool makes deviations visible early and thus shortens the month-end and year-end close.
What role do transfer prices play in intercompany transactions?
Transfer prices (transfer pricing) determine the value at which services and goods are billed between group companies and must comply with the arm's-length principle. They are highly relevant for tax purposes and subject to documentation requirements in Germany under Section 90 (3) AO: since 2025, a transaction matrix has been among the documents to be submitted, which — together with the master file — must be provided within 30 days of notification of an audit order for an external tax audit. A master file (Stammdokumentation) is generally required from a group revenue of at least 100 million euros in the previous year, while a local file (Sachverhaltsdokumentation) applies when IC goods transactions exceed 6 million euros or other IC services exceed 600,000 euros. Transfer prices should therefore be managed centrally in the ERP and documented in an audit-proof manner.
Which ERP functions should a corporate group examine for intercompany during system selection?
Genuine multi-client capability is central, so that each company can be run as its own client and IC postings can be automatically mirrored across client boundaries. Also important are integrated transfer-price management, multi-currency capability with exchange-rate difference handling per transaction, and an audit-proof audit trail for all IC transactions. A reconciliation tool that uncovers discrepancies before the close and uniform master data governance across all companies round out the requirements profile. In heterogeneous landscapes — such as a two-tier ERP approach with different systems at headquarters and subsidiaries — it must additionally be clarified how IC data is exchanged via interfaces.