What is intercompany AP, and how do you process invoices across entities?

Code the invoice at line (or distribution) level to each entity that bears the expense, let the system generate the corresponding due-to/due-from entries between the paying entity and the charged entities, and post so each entity's books reflect its share. The AP tool must support inter-entity coding on a single bill - without it, you either split the invoice manually into multiple bills or post it all to the paying entity and clean up with journal entries later.

The due-to on one entity must equal the due-from on its counterpart; they drift when entries are made on one side only, coded to the wrong counterpart, recorded at different amounts, or timed in different periods. The fix is generating both sides from the same transaction (so they can't disagree), standardizing intercompany coding, and reconciling counterpart balances before elimination. Different ERPs across entities make one-sided manual entries - and thus imbalances - far more likely.

When entity A pays an invoice whose expense belongs to entity B, A records a payable/payment and a due-from B, while B records the expense and a due-to A. Those reciprocal due-to/due-from balances net to zero in consolidation - the entries exist so each entity's standalone books are correct and the group eliminates cleanly.

Due-to (I owe a sister entity) and due-from (a sister entity owes me) are the reciprocal intercompany receivable/payable that arise from cross-entity AP. They clear through settlement (actual cash movement between entities) or netting, and eliminate in consolidation - but only if both sides agree, which requires generating them from the same transaction.

Centralized AP concentrates payment in one entity, which then charges costs out to the others (heavy intercompany volume, but consistent control); decentralized AP has each entity pay its own (less intercompany, more process duplication). Centralized models especially need clean inter-entity coding and automated due-to/due-from generation, or the charge-outs become a manual journal burden.

Sequence it: reconcile counterpart balances, settle or net intercompany positions, then post elimination entries in consolidation. Assign clear ownership (often group/consolidation accounting) and a deadline early in the close, since intercompany imbalances block the consolidated statements.

NetSuite has an intercompany framework (intercompany journal entries and, in some configurations, automated cross-charge); Intacct supports inter-entity transactions that auto-generate due-to/due-from; SAP supports cross-company-code postings. Each automates the reciprocal entries within its own environment - the hard case is intercompany spanning different ERPs.

The tool should let you code the expense to the owning entity at line/distribution level on the original bill, so the system generates the correct intercompany entries automatically - rather than posting everything to the payer and forcing a manual reclass. Inter-entity coding at capture is the control that prevents the cleanup.

When entities run different ERPs, intercompany often degrades into manual journals on both sides. Teams reduce it by standardizing the upstream AP coding (a common AP layer across the ERPs), agreeing a fixed intercompany coding convention, and reconciling counterparts on a schedule - so the manual entries are consistent and reconcilable even if they can't be fully eliminated.

Whenever intercompany charges carry a markup or cross jurisdictions, transfer-pricing and tax rules apply to the amount and documentation. AP's role is flagging marked-up or cross-border intercompany charges for tax/TP review and coding them per the agreed policy - the pricing and documentation judgment belongs to tax.

Code the single invoice across the benefiting entities (inter-entity allocation) while the vendor still sees one customer relationship and one payment. The AP tool carries the allocation internally and generates the intercompany entries, so the vendor experience stays simple even though the accounting spans entities.

Stampli supports inter-entity coding so an invoice paid by one entity can charge the entity that actually incurred the expense, carrying entity context through coding, approval, and posting and validating against each ERP's structure before posting - which keeps the resulting intercompany entries clean rather than manual. Because Stampli mirrors the ERP and runs a standardized AP process across entities (including entities on different ERPs), the upstream coding that drives intercompany balances is consistent, reducing the one-sided-entry drift that makes elimination slow.