In this article
At month-end, the group emails: your payable does not match the parent company's receivable. Intercompany reconciliation (đối chiếu công nợ nội bộ) is a recurring monthly task, yet it is often left until the audit. This article shares the 5-step process, reconciliation template and Excel tips that the accounting team at ACCA Consulting Vietnam applies for its FDI clients.
1. Why reconcile intercompany balances every month?
When preparing consolidated statements, the group must eliminate intercompany balances and transactions between member companies. If the two sides have recorded different amounts, the difference cannot be eliminated and holds up the close for the entire group. For a Vietnamese subsidiary, persistent differences cause three further problems:
- The auditors request confirmations and explanations, extending the audit.
- The related party transaction figures declared in the corporate income tax (CIT/TNDN) finalization do not match the related party's books.
- It becomes hard to determine foreign contractor tax (FCT) obligations and the timing of payments to the parent company correctly.
2. The 5-step intercompany reconciliation process
- 11. Agree the cut-off
Agree a lock date for intercompany transactions, for example the 3rd working day of the following month.
- 22. Extract balances by counterparty
Pull the balances and movements for each member company, in original currency and in VND.
- 33. Match transactions
Match each invoice, debit note and payment between the two sides by reference number.
- 44. Classify differences
Assign each difference to a cause category and an owner responsible for resolving it.
- 55. Confirm and file
Send a signed confirmation form and file the reconciliation with the month-end close pack.
Step 1 is the most important. If the parent records an invoice on the 30th but you receive it on the 2nd of the following month, the two sides will differ even though nobody is wrong. Agree in the group policy by when the seller must send documents and on which date the buyer records them.
3. Common differences and how to resolve them
- Exchange rate differences45%
- Cut-off and goods in transit30%
- Bank charges deducted on transfer15%
- Posted to the wrong counterparty10%
Illustrative example, not statistical data. Used to illustrate how to classify differences.
View as table
| Exchange rate differences | 45% |
| Cut-off and goods in transit | 30% |
| Bank charges deducted on transfer | 15% |
| Posted to the wrong counterparty | 10% |
| Difference category | Sign | Resolution |
|---|---|---|
| Exchange rate | Original currency matches, VND differs | Reconcile in original currency; note the rate each side applied |
| Cut-off | One side has the invoice, the other does not yet | Accrue, or note as goods in transit |
| Bank charges | Small differences after each payment | Agree which side bears the charges and record bank charges on the correct side |
| Wrong counterparty | Posted to another member company | Correct the counterparty code and notify the group |
| Dispute | One side has not accepted a charge | Record according to the contract and refer to the board of directors for a decision |
For payables in USD, always reconcile in the original currency first. If the original currency amounts match, any VND difference is simply due to the booked exchange rate and needs no adjustment with the group. Year-end revaluation of foreign currency balances is still carried out under Vietnamese accounting standards and policies.
4. Intercompany reconciliation template
Below is a suggested column structure. You can build it in Excel or Google Sheets, with one sheet per counterparty plus a summary sheet.
| Reference no. | Description | Vietnam books | Parent company books | Difference | Cause category | Owner |
|---|---|---|---|---|---|---|
| DN-2609-01 | September management fee | 12,000 | 12,000 | 0 | Matched | |
| DN-2609-02 | Q3 IT fee | 0 | 8,500 | −8,500 | Cut-off | Vietnam accountant |
| PAY-2609 | August payment | −20,000 | −19,975 | −25 | Bank charges | Group accountant |
Excel automation tips
- Use XLOOKUP on the reference number to pull the other side's figure into the same row.
- Use SUMIFS by counterparty and month to check that total balances agree with the general ledger.
- Apply conditional formatting to rows with a non-zero difference to filter items needing action quickly.
- Use Power Query to load the monthly export from the accounting software and avoid manual copying.
- Add a "Difference age" column (number of months unresolved) to prioritize long-outstanding items.
5. Confirmation form and monthly timetable
- Working days 1–3
Lock intercompany transactions; send any missing invoices and debit notes.
- Working day 4
Extract balances and send the reconciliation to the group accountant.
- Working days 5–6
Resolve differences and post additional entries if needed.
- Working day 7
Sign the balance confirmation and file it with the month-end close pack.
The confirmation form should be bilingual (Vietnamese – English) and include: the names of both companies, the cut-off date, balances in original currency, a list of open differences and the signature of an authorized person. A set of 12 monthly confirmations will make the year-end audit much faster. Accounting documents used for bookkeeping must be kept for at least 10 years under the Law on Accounting 2015 (Luật Kế toán 2015).
FAQ
What if the parent company will not confirm the balance?
Keep the reconciliation, the emails you sent and any replies. At year-end, the auditors will send an independent confirmation request. Report the situation to the board of directors so they can press the group to respond.
Should transactions with no remaining balance also be reconciled?
Yes, ideally. Reconciling movements during the period helps catch duplicated or missing invoices, even when the closing balances happen to agree.
Can intercompany balances be netted off?
Netting is possible where there is a valid netting agreement between the parties. For cross-border balances, also check the foreign exchange control rules and FCT obligations before netting.
Clean up intercompany balances before audit season
ACCA Consulting VN offers a free preliminary review of your intercompany balances. Accounting services based in Ho Chi Minh City, working with group accounting teams.
Free consultationZaloWhatsApp
