Inter-Entity Period Close

Inter-Entity Period Close connects completed entity-level closes to a reviewed group result. Finance checks the transactions between entities, reconciles what each side recorded, reviews consolidated reports, and prepares any required elimination entries under its accounting policy.

When to use this workflow

Use it when an organization has more than one entity and needs consolidated reporting. Each entity should first complete its own operational and financial review. A group report cannot resolve an unrecorded invoice, a missing bill, or an unexplained balance between entities.

Featured capabilities

• Entity transaction records provide the customer, supplier, invoice, bill, and other operating evidence that finance compares across entities.
• Reporting in VersaCloud ERP supports entity and consolidated financial review.
• General ledger journals hold accountant-approved corrections and elimination entries in the designated entity.

People and preparation

Each entity finance owner provides a reviewed period result and explains its own open items. Group finance determines the consolidation scope, reconciles inter-entity activity, and prepares the group report. An accountant proposes eliminations and the designated approver accepts them under the organization's policy. Before combining results, confirm the entities, period, reporting basis, linked operating documents, and who will resolve differences on each side. A group report is provisional while entity records are still changing.

Confirm the scope and entity readiness

The group finance owner confirms which entities and period are included, the reporting basis, and who approves the result. Each entity finance owner completes its Month-End Financial Close, identifies open exceptions, and hands over a reviewed trial balance and supporting records. If an entity is still changing its period activity, the group result remains provisional.

Match inter-entity activity

Compare the linked sale and purchase, invoice and bill, and other inter-entity records. Ask the owners on both sides to resolve missing, duplicate, incorrectly dated, or mismatched documents. Reconcile the relevant inter-entity receivable and payable balances and retain the supporting detail required by policy. If one entity recorded a transaction in a different period, resolve the timing and cutoff treatment before reporting. An imbalance needs investigation before a journal is used to cover it.

Review consolidation and record eliminations

Run Consolidated Financial reports for the selected period and entities. Review material differences against the approved entity results and investigate classification, currency, or timing questions. The accountant determines which inter-entity revenue, expense, balance, or profit amounts require elimination under the organization's policy.

Prepare any approved elimination journal in the designated elimination or consolidating entity. Check the accounts, period, entity, amount, and supporting explanation, then obtain the required approval and post it. VersaCloud does not automatically post elimination entries. Re-run and review the consolidated report after adjustments so the final result reflects the approved entries.

Decisions and handoffs at each stage

1. Confirm entity readiness

   Owner: Entity and group finance owners. Input: entity close results and group reporting scope.

   Work and decision: Agree on included entities and period. Do not treat a changing entity ledger as a final group input; assign unresolved entity exceptions.

   Evidence: Entity reports, period review, and open-item evidence.

   Handoff: Group finance receives a stable set of entity results.

2. Match operating documents

   Owner: Owners in both entities. Input: linked sales, purchases, invoices, bills, and related activity.

   Work and decision: Find missing, duplicate, mismatched, or cross-period records. Ask both sides to correct factual documents before proposing an elimination.

   Evidence: Linked inter-entity records and documented differences.

   Handoff: Finance receives paired activity or an assigned exception.

3. Reconcile balances

   Owner: Entity accountants. Input: inter-entity receivable and payable balances.

   Work and decision: Compare the balances and explain timing or currency differences under the accounting policy. Do not conceal an unexplained mismatch with a journal.

   Evidence: Account balances and reconciliation support.

   Handoff: Group finance has supported balances for consolidation review.

4. Review group results

   Owner: Group finance. Input: reviewed entity results and reconciled inter-entity activity.

   Work and decision: Run Consolidated Financial reports and investigate material differences against the entity results before adjustment.

   Evidence: Consolidated report and investigation evidence.

   Handoff: Accountant receives the issues that may require an elimination or correction.

5. Record eliminations and approve

   Owner: Accountant and finance approver. Input: supported elimination proposal.

   Work and decision: Check entity, accounts, period, amount, and explanation; approve and post the manual journal, then review the report again.

   Evidence: Elimination journal, approval evidence, final consolidated report.

   Handoff: Group finance has a reviewed result for reporting.

Variations and exceptions

A missing or one-sided transaction returns to the originating entity owners for correction before group reporting. A cross-period mismatch needs a cutoff decision under the accounting policy. If a reviewed group result requires elimination, the accountant prepares a manual journal in the designated entity and rechecks the consolidated report afterward. A journal does not substitute for reconciling the original operating documents.

Completion check

The consolidated report agrees to reviewed entity results; inter-entity differences are explained or assigned for resolution; and each elimination journal is traceable to its support and approval. Group finance signs off before the consolidated result is treated as final.