Intercompany confirmation have to be sent out to respective inter-company in order to confirm the outstanding balance due from/ due to inter-company. Discrepancies have to be reconciled immediately.
Discrepancies on inter-company balance could impact the Group figure during group consolidation. To illustrate, difference on inter-company balance on respective inter-company's book could resulted in inter-company balance not fully eliminated at Group level. If the discrepancies are significant, the Group account is likely to be eliminated.
Hence, it is important to ensure that inter-company balances are reconciled properly.