How often should companies perform intercompany reconciliation using ICMR?

• A. Once a year
• B. Daily
• C. Monthly or quarterly
• D. Only when discrepancies occur

Answer: (C)

The frequency of intercompany reconciliation via the SAP Intercompany Matching and Reconciliation (ICMR) tool is typically recommended on a monthly or quarterly basis. This regular cadence allows companies to closely monitor intercompany transactions, ensuring that any discrepancies are identified and addressed in a timely manner. By reconciling monthly or quarterly, organizations can maintain accurate financial records, reduce the risk of significant discrepancies accumulating over time, and enhance the overall accuracy of their financial reporting.

Conducting reconciliations only when discrepancies occur can lead to larger unresolved issues and may complicate financial audits or reporting processes. If reconciliations are performed daily, while it may seem beneficial for real-time accuracy, it can be impractical and resource-intensive for many firms. Annual reconciliations may not provide sufficient oversight for active intercompany transactions. Therefore, a monthly or quarterly reconciliation strikes an effective balance, allowing companies to efficiently manage their intercompany relationships while ensuring financial integrity.