Intracompany balancing rules are used to create balancing lines on journals between balancing segment values either within the same legal entity, or where there is no legal entity context.

Intracompany balancing rules are used when more than one balancing segment value exists on a transaction or journal entry, as long as you have selected the Balance Intracompany Journals option for the ledger. You cannot post a journal in General Ledger when the debit and credit amounts for each balancing segment value do not net to zero. These journals can be balanced automatically if you set up balancing rules and enable the option to balance cross-entity journals.

You must define Intracompany balancing rules if you want to balance journals automatically. You may define as many or as few balancing rules as you choose, and each balancing rule may have one or many accounting rules. Because balancing is an automated process, there should be at least one balancing rule with at least one accounting rule to proceed. This default balancing rule should be defined for the journal source Other and journal category Other for the ledger and legal entity you want to balance. The default accounting rule on each balancing rule is defined for the debit balancing segment value All Other and credit balancing segment value All Other.

With intracompany accounting, you can define both a debit (due from) and credit (due to) balancing segment, which gives you more control over each balancing relationship. You can specify different debit and credit accounts for each different intracompany trading partner, which is represented by a specific balancing segment value.

All Other is also available as a balancing segment value if you want the balancing segment value to use the same due to/due from accounts for every intracompany trading relationship that has not been specifically defined.

If you set up a specific debit and credit balancing segment value, then the assigned debit and credit account combinations are used. If you use All Other, the appropriate trading partner balancing segment value replaces the balancing segment value of the account combination.

You can also determine the level the Balancing API should use when selecting either Summary Net or Detail.

For balancing many-to-many journals there are several balancing segment values with net debits and net credits on a transaction and it is not possible to determine which balancing segment value is trading with which balancing segment value. You can decide whether to use a clearing balancing segment value or a default rule to handle these transactions.

The chart of accounts for this example has three segments: balancing, natural account, and intercompany.

Intracompany Balancing Rule:

Journal 1:

A specific rule is not defined for the balancing segment values 13 and 03. The API will use the All Other - All Other rule to create the following balancing lines. The result of the balancing will be:

Journal 2:

Since a specific rule is defined for the balancing segment value 02 in a debit position and balancing segment value 01 in a credit position, the API will use the 02 - 01 rule to create the following lines. The result of the balancing will be: