Intercompany allocations, calculated and drafted every month
Shared costs paid by one entity, such as software, insurance, or a central team, get split across subsidiaries every month, usually in a workbook only one person fully understands. The Accounting Agent runs your allocation logic against current figures and drafts the intercompany entries for every entity involved.
What the Accounting Agent prepares
- The allocation calculation for each shared cost pool, using your drivers (headcount, revenue, usage, or fixed percentages)
- Intercompany entries on both sides: the charge in each receiving entity and the recovery in the paying entity
- Updated due to and due from balances for each entity pair
- A working paper showing each driver, its source, and the resulting split
- A comparison with last period's allocation, so changes stand out
How it works
- Pull the data. The Accounting Agent pulls the shared cost balances and driver data from your ERP and connected systems, such as HRIS for headcount.
- Prepare the work in your logic and format. It applies your allocation method, calculates each entity's share, and builds the entries in your format.
- Review and approve. You review the split and the entries, then approve. The entries post to each entity's books in your ERP only after that approval.
What stays in your control
- Drivers and percentages are yours, and every change is logged with who made it
- No entity's books change until the entries are approved
- Each allocated amount traces back to the cost and driver behind it
Standard note
FAQ
What is an intercompany allocation?
It is a charge that moves a share of costs incurred by one legal entity to the other entities that benefit from them, creating intercompany receivables and payables between those entities.
How does Ledge calculate intercompany allocations?
The Accounting Agent applies the drivers your team defines, pulled from source data each period, and shows the math in the working paper. It does not choose the allocation method for you.
How is this different from departmental allocations?
Intercompany allocations move costs between legal entities and create balances that are later eliminated in consolidation. Allocations across departments or cost centers within one entity are covered on the allocation journal entries page.
