An intercompany agreement is the contract that governs a flow between two entities of the same group: what is supplied, on what terms, at what price, for how long. It is the legal counterpart of the accounting entry, and without it a tax authority can treat a management fee or a cost recharge as an undocumented transfer of profit rather than a service actually rendered.
A usable agreement covers five points. The scope: which services, goods or funds are provided, described precisely enough that delivery can be evidenced. The pricing method: cost base, allocation key and the intercompany markup applied. The payment terms: due dates, currency, interest on late settlement. The duration and termination conditions. The allocation keys for shared costs, headcount, revenue, square metres, stated rather than implied.
The recurring failure is not the absence of an agreement. It is the drift between the agreement and the invoices. The contract sets a 5 percent markup on a defined cost base; two years later the base has quietly grown, the allocation key was never updated after a reorganisation, and the invoiced amount no longer matches anything the contract says. Nobody notices, because nobody reads the contract at invoice time.
This is the same control gap Phacet closes on supplier invoices, applied inside the group. The contract data extraction agent turns the agreement into structured terms: rate, base, key, dates. The invoice versus contract control agent then checks each intragroup invoice line against those terms and flags what diverges before payment.
An agreement nobody enforces is documentation, not control. Checking the invoice back against the contract is what turns it into an audit-ready process, and it is the same discipline behind invoice price compliance on third-party suppliers. See also contract analysis.
