Intercompany reconciliation is a simple process that takes place when you hire someone who has a license from a different state to do work in your company. There are different reasons for doing this, but one of the most common reasons is for tax purposes. It may also be a way to correct an error or two.
Intercompany reconciliation is much more common than it used to be. When you begin your career in a new company, the best thing to do is to go to the company that you are working for and ask to speak with someone who works in their accounting department. When you ask, make sure that you are polite and not rude. Most companies are happy to explain what is expected.
Once you have spoken with the person, make a list of all of the accounts on your own computer. When you have finished doing this, take this list and the person’s number and contact information and mail it to them.
You should know that this type of reconciliation process will be quite involved. The first step is to go through each of the numbers that you have saved and check for any numbers that are not linked to the correct person. There may be some numbers that are only in one state and the person does not have a license to handle taxes in that state. If this is the case, you will need to figure out who the person is so that you can fix the issue before it is too late.
After you have checked the numbers in your state for errors, make sure that you cross reference them with the person’s information. You will want to find out if the state has a reciprocity agreement with the other state. Most states have such agreements, but there may be some out there that do not. If this is the case, then you will need to call the individual state in order to request the numbers that they require from you.
After you have done this, you will want to find out if there is any problem with the tax return that was filed. Some companies may want to take the dispute to the state in which the employee did the work. You can look up this information in the state that you are in and ask for a copy of the report.
Now you have the information needed to call the person’s number and ask for the correction. Make sure that you show your work product so that they know that you have proof that you sent them. You should be prepared to give them a copy of the report and an explanation of what was wrong. Your goal is to allow them to determine whether or not they want to work with you.
Intercompany reconciliation can be a very long and complicated process, but it is well worth the effort. It is important to keep your employer’s eye on you.