Intercompany eliminations, worked through on a fictional group
Last updated: Oct 6, 2026
A step-by-step example of eliminating due to / due from balances and a management fee between two related QuickBooks Online companies.
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Cedar Group is fictional: Cedar Management Co manages a rental property owned by Cedar Properties LLC and charges it a monthly management fee. The same person owns both companies, and neither owns the other. Each company has its own QuickBooks Online file.
Here is one month’s consolidation, from the two companies’ own figures to the group report.
1. Check that both sides agree
At September month end, Cedar Management Co shows $12,500 due from Cedar Properties LLC, and Cedar Properties LLC shows $12,500 due to Cedar Management Co. The month’s management fee is $3,000: income in Cedar Management Co, an expense in Cedar Properties LLC. Both sides agree, so the eliminations will net to zero.
2. Eliminate the balance
In the consolidation worksheet, not in QuickBooks, remove what one company owes the other:
| Account | Debit | Credit |
|---|---|---|
| Due to Cedar Management Co | Debit12,500.00 | No amount |
| Due from Cedar Properties LLC | No amount | Credit12,500.00 |
3. Eliminate the fee
The group didn’t earn the fee from anyone outside it, and didn’t pay it to anyone outside it, so the income and the expense leave the group report together:
| Account | Debit | Credit |
|---|---|---|
| Management fee income | Debit3,000.00 | No amount |
| Management fees | No amount | Credit3,000.00 |
4. Check the group report
| Cedar Management Co | Cedar Properties LLC | Eliminations | Consolidated | |
|---|---|---|---|---|
| Due from Cedar Properties LLC | $12,500.00 | — | ($12,500.00) | — |
| Due to Cedar Management Co | — | $12,500.00 | ($12,500.00) | — |
| Management fee income | $3,000.00 | — | ($3,000.00) | — |
| Management fees | — | $3,000.00 | ($3,000.00) | — |
- The eliminations balance: every debit has its credit.
- The consolidated balance sheet still balances.
- Group net income is the sum of the two companies’ net incomes: the fee was income in one and an expense in the other, so removing both leaves the total where it was.
- Each company’s column still matches its own QuickBooks report.
Free template: tie out every due to / due from pair in Excel, with a worked example. Get the reconciliation template
Where Flatbooks fits
Flatbooks reads a client’s related QuickBooks Online companies for the month you choose and puts each due to / due from pair side by side, with the difference between the two sides. To help find the entries behind a difference, it can lay the two companies’ ledgers for the period next to each other.
When you’ve found the cause, it prepares one correcting journal entry for the company you choose. The intercompany side is calculated; the other account is yours to pick, with a note of the cause and source. Nothing posts to QuickBooks until you approve it, Flatbooks reads QuickBooks again afterwards to check the result, and a posted correction can be reversed.
Once the pairs agree, it exports the consolidated workbook: the group statements, the eliminations, and a verification sheet tying every company back to its own QuickBooks report. The client’s companies stay in QuickBooks Online. It handles due to / due from balances and management fees between sibling companies; when one company owns another, or other group adjustments are needed, it says so and pauses the export.
The sample is fictional and needs no account. Your first client’s diagnostic is free. No card needed.