Intercompany

Revenue from one group entity to another: real in the selling entity's ledger, not revenue to the group. Excluded from the commercial roll-up by an affiliate flag on the customer, listed, so the entity's local total bridges to its contribution.

DefinitionRevenue from one group entity to another: real in the selling entity's ledger, not revenue to the group. Excluded from the commercial roll-up by an affiliate flag on the customer, listed, so the entity's local total bridges to its contribution.

The identity

Entities' third-party revenue in reporting currency sums to consolidated revenue.

Flag, not judgement

The affiliate list is maintained once. Exclusion is by rule on every upload.

How it is used

Sales from one group entity to another are flagged by the customer identifier and excluded from group revenue measures, while remaining in the selling entity's own figures.

Example

Entity A invoices entity B $3.0 million a year. Entity A's revenue includes it. Group revenue, concentration and coverage exclude it, with the amount shown as a reconciling line.

Where it goes wrong

Left in. The largest customer in the concentration table turns out to be a sister company.

Articles that use this term

Data quality and reconciliation

Currency and multi-entity roll-ups: one identity across several ledgers

How a company with several legal entities and currencies builds one commercial roll-up that still reconciles: the entity as a level above region, one reporting currency at stated rates per period, the rule that conversion happens once at the entity ledger and never in the report, constant-currency comparisons beside reported ones, intercompany revenue excluded by rule, and the identity that the sum of entities in reporting currency equals the consolidated figure.

16 Sept 20262 min read Procurement and supply chain · Supply chain

Single-source parts and inbound concentration by site: the supply chain continuity roll-up

How a supply chain team finds single-source parts, measures inbound concentration by supplier per site and watches supplier performance trends from goods receipts and the supplier master, with the reconciliation to goods received that makes the exposure figure defensible.

16 Sept 20263 min read Board and management reporting · Finance and FP&A teams

KPI vs metric vs measure: what is the difference, and why most dashboards have too many of the first

Measure, metric and KPI are used as synonyms and are three levels of the same thing. A measure is a number computed from data, such as revenue or a count of accounts. A metric is a measure given a definition and a context, such as revenue per active account over a trailing twelve months. A KPI is a metric that someone owns, that has a target, and that a decision depends on. This page sets out the three, gives the test that separates a KPI from a metric, and shows how to cut a forty-tile dashboard to the five that matter.

17 Sept 20264 min read Board and management reporting

Monthly sales report template: seven sections, what goes in each, and what to leave out

A template for a monthly sales report that a leadership team will actually read: a five-line summary, revenue against plan and the same month last year with the bridge between them, the existing customer base, new business and pipeline, the forecast with its track record, the named risks and opportunities, and the decisions requested. This page gives each section with the table that belongs in it, the reconciliation line that makes finance trust it, the common contents to leave out, and a copyable outline.

17 Sept 20265 min read Procurement and supply chain · Procurement

What is a good spend under management? The answer depends on three things you can measure

The honest answer to what share of spend procurement should manage: the 60 to 85 percent figures quoted depend on what managed means, on which spend is addressable, and on whether the figure is computed from invoices or claimed from contracts. This page gives the ranges by maturity, the three measurable things that set the right figure for one organisation, and the table to compute before anyone quotes a percentage.

17 Sept 20263 min read