A business that is a group of companies has dealings between those companies, and those dealings need correct accounting. This piece is about intercompany accounting in Odoo.
The intercompany situation
When a business is not a single company but a group of companies, the companies in the group often deal with each other: one company sells to another, supplies another, or there are other dealings between them. Each company in the group is its own entity with its own books. So a dealing between two companies in the group is, for accounting, a transaction between two separate entities, and it has to be accounted for correctly in each company's books. Intercompany accounting is the accounting of these dealings between the companies of a group.
The two things intercompany accounting must get right
Intercompany accounting has to get two things right at once. It has to be correct for each company: a dealing between two group companies is a real transaction between two entities, and each company's books have to reflect it correctly, as the transaction it genuinely is for that company. And it has to give the group a coherent picture: the group needs to be able to see itself as a whole, across the companies, and the intercompany dealings are part of that whole. Intercompany accounting is the handling of dealings between group companies so both of these are right, correct per company, coherent for the group.
How Odoo handles it
Odoo supports running multiple companies within one system, and supports intercompany dealing between them, with the accounting handled. This means a group can run its companies in one Odoo system, and the intercompany accounting, the accounting of the dealings between the companies, is handled within that one system: a dealing between two group companies is accounted for as the intercompany transaction it is, correct in each company's books, and the group has its companies in one system rather than each on a separate island. Intercompany accounting in Odoo is handled coherently, with each company's books kept correct.
The value of doing it in one connected system
The value of handling intercompany accounting in one connected Odoo system is the alternative. A group whose companies are each on a separate accounting system has to handle every intercompany dealing across two disconnected systems, and reconciling the group, getting a coherent picture of the whole, becomes a manual, error-prone exercise. Handling it in one system means the intercompany dealings are accounted for coherently, each company correct, and the group can see itself as a whole, without the separate-system reconciliation. The connected system is what makes intercompany accounting both correct per company and coherent for the group without heavy manual effort.
An accounting matter, to be done properly
An honest note. Intercompany accounting is more involved than single-company accounting, and it is genuinely an accounting matter, getting the accounting of dealings between entities correct involves accounting rules and care. A group should handle its intercompany accounting with proper accounting knowledge, and should set the multi-company structure up to reflect its genuine company structure. Odoo provides the multi-company and intercompany capability; using it to keep the intercompany accounting genuinely correct is an accounting matter to be done properly.
The takeaway
Intercompany accounting in Odoo handles the accounting of dealings between the companies of a group. It has to get two things right: the accounting correct for each company, since a dealing between group companies is a real transaction between entities, and a coherent picture for the group as a whole. Odoo, supporting multiple companies and intercompany dealing in one system, handles this coherently, which avoids the manual reconciliation that separate systems would force. It is an accounting matter, to be handled with proper knowledge. For how we approach Odoo, see our ERP practice.