International distributors · Export-oriented and SEZ units
Overseas sales arms reporting to one monthly close
An Indian company that sells through its own subsidiary, branch or warehouse abroad usually sees the overseas numbers late, in another currency and in a different format. We bring each overseas arm into a monthly consolidated view, agree intercompany balances, and keep the pricing and investment records that both countries' rules require.
In one paragraph
When an Indian manufacturer or brand owner sells abroad through its own subsidiary, branch or warehouse, the margin is split between two related entities. Transfer pricing, intercompany balances and consolidation then decide what each side reports. Most are owner-led, at ₹50–1,000 crore turnover. Their sales arms are in markets such as the US, UK, Europe, the Gulf or Southeast Asia.
Chief financial officer or managing director
The economics
How the money moves in this trade
Selling through your own overseas arm means two profits on one sale: the Indian company's margin on the transfer price, and the subsidiary's margin on resale. Both are tested by tax authorities in each country, so the transfer price must be supported by an analysis prepared in advance, not explained afterwards. Inventory held in an overseas warehouse is still the group's stock, and unrealised profit on it has to be removed when the group consolidates.
Investment in and lending to the overseas entity falls under India's overseas investment rules, with annual reporting through your bank. Intercompany balances grow when the subsidiary pays the parent slowly, which is also a realisation question for the Indian company's exports. Without a common chart of accounts and a shared close date, the group result is known only once a year when auditors in two countries finish.
The problem
Where the numbers usually break down
Overseas books close weeks after India
The subsidiary's accountant closes on a local timetable, so monthly group results are never available when decisions are made.
Intercompany balances do not agree
Shipments in transit, exchange rates and timing differences leave the parent's receivable and the subsidiary's payable apart, and the difference is carried forward.
Transfer prices are set without current support
Prices to the subsidiary were set years ago and are not compared with the analysis the tax rules require each year.
Unrealised profit in overseas stock is ignored
Group profit includes the Indian margin on goods still sitting in the overseas warehouse.
Overseas investment reporting is assembled late
Annual reporting on the investment in the overseas entity is prepared from the subsidiary's audited accounts at the last moment.
What we do
The work, and the result each part produces
Monthly group close
A common chart of accounts, a shared close calendar and a monthly reporting pack from each overseas entity.
Group results are available each month, not once a year.
Intercompany reconciliation
Parent and subsidiary balances agreed monthly, with goods in transit, exchange differences and disputes listed.
Intercompany balances agree and differences are explained.
Consolidation with stock elimination
Consolidated results prepared monthly, with unrealised profit on stock held abroad removed.
Group margin reflects sales to third parties only.
Transfer-pricing records
Intercompany prices, volumes and margins tracked during the year against the agreed pricing policy.
The year-end transfer-pricing study starts from complete data.
Overseas stock and receivable view
Stock by warehouse and ageing, and receivables from overseas customers, reported alongside Indian figures.
Working capital tied up abroad is visible.
Overseas investment records
Investment, loans, guarantees and returns from each overseas entity recorded for annual reporting through your bank.
Reporting is prepared from current records rather than reconstructed.
Where we start
The first steps of an engagement
Overseas accounts and intercompany ledgers
We ask for each overseas entity's trial balance and chart of accounts, the intercompany ledgers on both sides, the transfer-pricing policy and the last annual overseas investment report filed through your bank.
Intercompany balances agreed
Parent and subsidiary balances are agreed, with goods in transit, exchange differences and disputed items listed. Each entity's accounts are mapped to a common structure.
Shared close calendar and pack
Each entity gets a close calendar and a standard monthly reporting pack, with stock held abroad reported by warehouse and age.
First consolidated group report
Consolidated results with unrealised profit on overseas stock removed, intercompany differences explained, and intercompany prices compared with the pricing policy.
How it is measured
The reports the work is judged on
Each is recorded as a baseline before the work starts, so later reports have an honest comparison.
- Days from month end to group results
- Intercompany differences open, by entity
- Group margin after unrealised profit elimination
- Intercompany price and margin against policy
- Overseas stock by warehouse and age
- Overseas investment records complete for the year
Who it suits
Written for, and not the right fit for
- You sell abroad only through independent distributors and own no entity or stock there — the exporter pages are a closer match.
- You need overseas statutory audits or local tax filings — those are done by licensed professionals in each country, whom we can coordinate with.
- Indian manufacturers and brand owners with their own sales subsidiaries or branches abroad.
- Exporters holding stock in overseas warehouses or fulfilment centres.
- Groups whose overseas results arrive too late or too unreliably for decisions.
Services
Services this work draws on
MIS and financial planning
Reporting built around the questions you actually need answered.
Explore service ↗Fractional CFO services
Senior financial leadership on the days you need it, not a full-time hire.
Explore service ↗SEZ and foreign trade advisory
SEZ, EOU and export scheme records kept continuously, not at assessment.
Explore service ↗GST, TDS and tax compliance
GST, TDS and income-tax prepared from reconciled data, not a working file.
Explore service ↗Every other service, also available in this trade
Common questions
Questions owners in this trade ask
Our overseas accountant is reliable. Why change anything?
Reliable for local compliance, usually. The gap is that local books close on a local timetable and in a local format. A shared calendar and reporting pack turns their work into something the group can use monthly.
Do you prepare the transfer-pricing study?
We keep the intercompany data and records current through the year. The study and the accountant's report are prepared and signed by an independently engaged CA, who will find the work far quicker with the data already in order.
Does each overseas entity have to change its accounting system?
No. We map each entity's accounts to a common structure and translate at agreed rates. The entities keep their own systems; the group gets one view.
Transfer-pricing reports, the accountant's report on international transactions, and statutory audits in India and abroad are signed by independently engaged licensed professionals. Overseas investment reporting is filed through the client's authorised dealer bank. 5th Quadrant prepares and maintains the records behind them. Full detail is on our Professional Scope page.
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