Why are intercompany balances so error-prone?

Detailed Explanation

Because both sides of the same transaction are recorded independently, by different teams, often in different systems, currencies and closing calendars. Any of those differences can produce a mismatch that is not an error in either ledger: one entity books on shipment and the other on receipt, or the same amount converts at two different rates. The balances are frequently material, and they eliminate on consolidation — so an unresolved break does not stay local. It lands directly in the consolidated statements, which is why the reconciliation is treated as a control rather than a housekeeping task.