Hello! We currently use non arm’s length intercompany transfer orders. The flow is transfer order, then item fulfillment, then item receipt. Because of how the item receipt posts to the general ledger, the intercompany clearing account has built up a balance. The item fulfillment posts a credit to the inventory asset account and a debit to the inventory in transit account. That part behaves as expected. The item receipt is the problem. For the fulfilling subsidiary, the item receipt posts a credit to inventory in transit and a debit to the intercompany clearing account. For the receiving subsidiary, the item receipt posts a debit to inventory asset and a credit to the intercompany clearing account. The two intercompany clearing entries created by the receipt are not equal to each other. Since the clearing account is debited and credited by different amounts on each receipt, it does not net to zero. Over time, those differences accumulate and leave a balance in the intercompany clearing account. Why do the amounts posted to the intercompany clearing account on the item receipt not match?

Currency? Or you are using a transfer price.

We are using item cost as transfer price. It could be currency but I am not sure... in this example, fulfilling sub is EUR, receiving sub is GBP. The amount posted to intercompany clearing account does not match even when I take fx into account. Parent entity is in AUD - when I run a consolidated BS, I can see that the EUR and GBP amounts do not net to zero. @Bryan Miller

In your interco preferences are you doing a percentage upcharge? https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/article_158989474458.html#To-define-intercompany-preferences%3A It would be in bullet #7 for transfer price methods

Right now we only use the automated intercompany management feature, so the percentage upcharge is not an option for us. On our intercompany preference page, we have only set the default interco AR and AP accounts. These are non arms' length transactions, so IC AP and AR are not used here. The item receipt has the daily fx rate for the EUR to GBP conversion on it - do you think that is the problem? @Bryan Miller

it could be, but they should be getting cleared when you eliminate interco. Multi-sub interco w/ exchange rates are tricky and my instance isn't using them currently. I'd read through this https://docs.oracle.com/en/cloud/saas/netsuite/ns-online-help/section_N1404834.html and try to walk the transactions in the gl reports to see what you can see.

Thanks, appreciate it! Taking a closer look today