Naarvin finds which customers and suppliers in each company's books are really other group companies, using the ERP's own intercompany flag, VAT and registration numbers and names. It then compares both sides of every intercompany balance, lists each difference with the entries behind it, and prepares eliminations and netting for approval. A person confirms every link; nothing is linked automatically.
Why do intercompany balances never agree?
Two companies record the same transaction on different days, in different currencies, against different accounts, and often under different names for each other. One books an invoice in March, the other in April. One calls its sister company by its legal name, the other by a trade name. At month end the balances differ and someone has to find out why, by email.
- Group companies appear as ordinary customers and suppliers, under names that do not match.
- Invoices are booked in different periods on each side.
- Each company uses its own currency, so even agreed balances differ after translation.
- Loans between companies carry interest that only one side has booked.
- Differences are found at consolidation, when there is no time left to fix them.
How does intercompany reconciliation run with Naarvin?
- Link the counterpartiesNaarvin proposes which customers and suppliers are group companies, from the ERP's own flag, a VAT or registration number, or a matching name in Arabic or English. A person confirms each link.
- Compare both sidesEvery intercompany balance is compared with its mirror in the other company, after currency translation.
- List the differencesEach difference is listed with the entries on both sides, so the cause, such as timing, currency or a missing invoice, is visible.
- Agree the fixThe companies agree who corrects what. Corrections are posted in each company's own ERP.
- Prepare eliminationsElimination entries are prepared as drafts and posted by someone other than the person who prepared them.
- Net what can be settledA netting run offsets what group companies owe each other, approved by someone other than the person who proposed it.
What usually causes an intercompany difference?
| Cause | What it looks like | Usual fix |
|---|---|---|
| Timing | Invoice booked in March by one side and April by the other | Accrue it in the earlier month, or agree a cut-off |
| Currency | Balances agree in the transaction currency but not after translation | Use the same rate source and date |
| Missing entry | One side has an invoice or payment the other does not | Book the missing document |
| Interest | Loan interest booked by the lender only | Book the matching interest expense |
| Wrong account | Booked to a third-party account instead of intercompany | Reclassify it |
Why does Naarvin ask before linking?
Because a wrong link is worse than a missing one. The matcher is conservative: a name that fits two companies, or a VAT number that contradicts the company's own, gives no match. Transliterations between Arabic and English names and trade names that share no words with the registered name are not matched, so a person links those once and they stay linked.
What do you need to start?
- Each group company connected, with its customers and suppliers.
- Each company's VAT and commercial registration numbers.
- Your group structure and reporting currency.
- Loan agreements between companies, if you want interest and balances checked.
Who is this for?
Groups whose companies trade with each other, lend to each other or share costs, especially across currencies and ERPs. A group whose companies never transact with each other has little to reconcile.
Questions people ask
Does Naarvin link group companies automatically?
No. It proposes links with the reason for each, and a person confirms them. Once confirmed, a link stays in place.
Can it match Arabic and English names?
It matches names once case, punctuation, legal forms and Arabic letter variants are set aside. A transliteration between Arabic and English is not matched automatically; link it once by hand.
Does Naarvin post the corrections?
Corrections are posted in each company's own ERP. Approved journals can go to the ERP once your admin turns sending on.
How are intercompany loans handled?
Loans between group companies are recorded with their balances and interest, checked on both sides, and eliminated on consolidation.