We have a transfer order going from subsidiary 1 to subsidiary 2, both in different countries. On the item fulfillment, there is a GL impact hitting Inventory in Transit and Inventory Asset as expected, but also hitting the Intercompany Clearing Account (crediting subsidiary 2 and debiting subsidiary 1). On the item receipt, there is no line items for the Intercompany Clearing Account, which is messing up our accounting teams numbers. Accounting is not my strong suit, so what is the best way to deal with the imbalance here? Is it just the Intercompany Elimination at the end of the period?

This balance is the difference between the item cost and the transfer price set on the transfer order. Are you using average cost? You could also try to enable “Use Item Cost as Transfer Cost” so there is no variance To your accounting note these two entries should eliminate at the consolidated level but when viewing each individual subsidiary you will see the balances