Accounting
Financial Management
Due To and Due From Accounts: Journal Entries Between Funds and Entities and How to Keep Them in Balance
Last updated: October 16, 2026 · Independent guide · We do not sell rankings or coverage.
Due to and due from accounts record what one fund or entity owes another inside the same organization. The fund or entity that is owed books a due from (an asset), and the one that owes books a due to (a liability) for exactly the same amount, so the two always net to zero across the group. If your due to and due from accounts do not agree, one side is missing, late, miscoded or translated at a different rate, and the difference has to be fixed in the books of the side that is wrong before you eliminate or report.
The rule and the paired entries
Every interfund or intercompany entry has two halves, one in each fund or entity, and for every pair the due from in one set of books must equal the due to in the other. Settlement reverses both halves for the amount repaid.
| Account | Debit | Credit | Note |
|---|---|---|---|
| Payer: Due from (other entity or fund) | X | Payer settles a bill that belongs to the other side | |
| Payer: Cash | X | Cash leaves the payer’s account | |
| Beneficiary: Expense (or asset) | X | Cost lands where it was incurred | |
| Beneficiary: Due to (payer) | X | Mirror of the payer’s due from |
Use one due to and one due from account per counterparty, or a shared account with a mandatory counterparty field.
Worked example: one intercompany case and one interfund case
The figures below are an illustration.
Case 1: intercompany. Parent Co pays a $12,000 software invoice that belongs to its subsidiary, Sub LLC, on March 10. On March 28, Sub LLC repays $7,000.
| Account | Debit | Credit | Note |
|---|---|---|---|
| Parent Co: Due from Sub LLC | $12,000 | March 10 | |
| Parent Co: Cash | $12,000 | Vendor paid | |
| Sub LLC: Software expense | $12,000 | March 10, same period | |
| Sub LLC: Due to Parent Co | $12,000 | Mirror entry | |
| Sub LLC: Due to Parent Co | $7,000 | March 28 repayment | |
| Sub LLC: Cash | $7,000 | ||
| Parent Co: Cash | $7,000 | March 28 receipt | |
| Parent Co: Due from Sub LLC | $7,000 | Balance now $5,000 |
At March 31, both sides show $5,000, so the pair agrees and is ready to eliminate.
Case 2: interfund. A city or nonprofit runs payroll from the General Fund’s bank account. On April 15, $8,500 of that payroll belongs to a grant-funded Special Revenue Fund. The grant reimbursement arrives in the Special Revenue Fund on May 6, and it repays the General Fund the same day.
- April 15, Special Revenue Fund: debit Salaries $8,500; credit Due to General Fund $8,500.
- April 15, General Fund: debit Due from Special Revenue Fund $8,500; credit Cash $8,500.
- May 6, Special Revenue Fund: debit Due to General Fund $8,500; credit Cash $8,500.
- May 6, General Fund: debit Cash $8,500; credit Due from Special Revenue Fund $8,500.
At April 30, the two funds show equal and opposite balances of $8,500, and each fund still balances on its own. Fund accounting systems can post steps 1 and 2 together.
Why due to and due from balances fail to agree
- Timing. One side books on the 30th and the other on the 2nd of the next month.
- One-sided entries. A recharge or allocation journal posted in one entity only, or a pooled-cash payment coded to the right expense but no due to.
- Wrong counterparty or fund. The item sits against Sub B instead of Sub A, so two pairs are off by the same amount in opposite directions.
- Exchange rates. One side revalues at a different rate.
- Misclassification. One side records a transfer (no repayment) while the other records a loan (repayment expected).
- Bank sweeps. A zero balance account sweep between entities creates a due to/due from that must be posted daily.
Our guide to intercompany reconciliation shows how to confirm and fix each of these causes in detail.
A monthly tie-out routine
- Set a cutoff. No new intercompany or interfund charges after a set business day before close.
- Post the missing halves. Report due to and due from activity by counterparty, find entries with no mirror, and post or reverse them.
- Revalue foreign currency balances at the group closing rate before you compare anything.
- Build the pair matrix. List each entity or fund down the side and each counterparty across the top. Opposite cells must agree.
- Explain every difference above your tolerance with a reason code and an owner. The entity or fund that made the error corrects its own books.
- Settle or age. Settle on a schedule, and review any balance older than policy allows as a possible transfer or advance.
- Sign off. Both controllers, or the fund accountant and reviewer, sign the pair reconciliation before consolidation or fund statements are run.
The standard behind it: ASC 810 and GASB
Companies. Under ASC 810-10-45-1, “intra-entity balances and transactions shall be eliminated” in consolidated statements (PwC Viewpoint, no date shown).
Governments. GASB Codification 1800.102 sorts interfund activity into four types: loans (interfund advances), interfund services provided and used, reimbursements and transfers (New York State Comptroller, no date shown). In the guide’s examples, loans are recorded in the due to and due from other funds accounts, while transfers are not. Sacramento County’s policy describes due to/due from as balances “currently receivable or payable within a year,” records the noncurrent part as advances to or from other funds, and says balances not expected to be repaid within a reasonable time should be reduced and reported as a transfer (Sacramento County, established January 2023). State law can be stricter: the New York guide notes that General Municipal Law §9-a requires interfund advances to be repaid within the fiscal year advanced.
Nonprofits. Funds inside one legal entity offset when combined into the statement of financial position. Our nonprofit chart of accounts guide covers how to structure the fund segment.
Elimination at consolidation
Once a pair agrees, the elimination is a single entry in the consolidation or elimination ledger, never in either entity’s books. Using Case 1, debit Due to Parent Co $5,000 and credit Due from Sub LLC $5,000. The $12,000 expense stays, because it was paid to an outside vendor.
For governments, the Washington State Auditor’s guidance says to eliminate interfund receivables and payables within the governmental activities column and within the business-type activities column. Balances between the two columns can be reported on a single internal balances line, where “one of them will be negative and they should add up to zero” (Washington State Auditor’s Office, no date shown). Fund financial statements still show due to and due from other funds. For revenue, inventory profit and investment eliminations, see our guide to intercompany eliminations.
Common mistakes
- Plugging the difference at consolidation. It leaves the subsidiary or fund statements wrong.
- Netting due to and due from across different counterparties. A $40,000 due from Sub A and a $40,000 due to Sub B are not a match.
- Using an interfund balance for a transfer. If nobody expects repayment, record a transfer in and out, not a due to/due from.
- Posting eliminations in entity books. This distorts statutory accounts and tax returns.
How to report it
In each subsidiary’s statements, a due from is a current asset and a due to a current liability unless settlement is not expected within a year. Governmental fund statements show due from and due to other funds, with longer-term amounts as advances. Keep the signed pair matrix with the close file, because auditors ask for it.
How ERP and accounting systems automate due to/due from
Sage Intacct. With inter-entity transactions enabled, Intacct adds the offsetting lines itself. If the source entity’s lines net to a debit, that entity receives a due to, and Intacct picks the accounts mapped for the entity pair. The Advanced plan allows separate account sets per entity pair. Intacct auto-balances across base currencies, but balancing by dimension must be done manually (Sage Intacct Help, October 8, 2026).
Oracle NetSuite OneWorld. Advanced intercompany journal entries carry a Due To/From Subsidiary column and an Eliminate flag, which require the Automated Intercompany Management feature. An Auto Balance button adds the receivable or payable balancing lines using default accounts set in Accounting Preferences, but you still enter the other lines yourself (Oracle NetSuite Help, no date shown).
Microsoft Dynamics 365 Business Central. All partners map their accounts to one shared intercompany chart of accounts, and a G/L account can carry a default IC partner account, for example a receivable mapped to the partner’s payable. With Auto Accept Transactions turned on, the receiving company’s journal lines are created but not posted, so someone still has to post them (Microsoft Learn, April 7, 2026).
MIP Fund Accounting. For interfund entries in one organization, offset account assignments tell MIP which due to and due from accounts to use. In MIP’s example, an expense keyed to Fund 200 becomes a credit to Due To (2200) in Fund 200, a debit to Due From (1200) in Fund 100 and a credit to Fund 100’s cash when the user clicks Use Offsets (MIP Help, no date shown). None of these tools replaces the monthly tie-out.
How we researched this
On October 16, 2026 we reviewed the pages ranking for “due to due from accounts,” including glossaries from Hyperbots and Corporate Finance Institute and setup pages from Jenzabar and iMIS. None covers interfund and intercompany cases together, a tie-out routine, GASB treatment or automatic setup across systems. We used PwC’s ASC 810 guide, government accounting manuals and vendor documentation. We have no commercial relationship with the vendors named.
Related guides
- Special Revenue Fund: GASB 54 Definition and Examples
- Enterprise Fund: Definition, GASB 34 Tests and Example
- Modified Accrual Accounting for Governmental Funds
Frequently asked questions
Is a due to account a liability?
Yes. A due to account is a liability that shows what one fund or entity owes another in the same organization. Its mirror, the due from, is an asset in the other fund or entity.
Do due to and due from accounts have to equal each other?
Yes, pair by pair. The due from in one entity or fund must equal the due to in the counterparty at the same date. If they differ, find and fix the error before you eliminate.
What is the difference between a due to/due from and a transfer?
A due to/due from expects repayment. A transfer moves resources between funds with no repayment and is recorded as transfers in and out, not as a balance.
Where do due to and due from accounts go on consolidated statements?
Nowhere. They are eliminated in consolidation because a group cannot owe itself. Governments may instead show a net internal balances line between governmental and business-type activities that sums to zero.
Sources
- PwC Viewpoint, Consolidation and equity method guide, 8.2 Intercompany transactions (quoting ASC 810-10-45-1), no date shown. viewpoint.pwc.com
- Office of the New York State Comptroller, Accounting for Interfund Transactions (citing GASB 1800.102 and GML §9-a), no date shown. osc.ny.gov
- Sacramento County, Policy 7-1957: Interfund Transactions, established January 2023. saccounty.gov
- Washington State Auditor’s Office, BARS GAAP Manual, Eliminations (4.2.7), no date shown. sao.wa.gov
- Sage Intacct Help, Overview of inter-entity transactions, October 8, 2026 (Sage sells Intacct). intacct.com
- Oracle NetSuite Help, Making Advanced Intercompany Journal Entries, no date shown (Oracle sells NetSuite). docs.oracle.com
- Microsoft Learn, Set Up Intercompany (Business Central), April 7, 2026 (Microsoft sells Business Central). learn.microsoft.com
- MIP Fund Accounting Help, Offset Account Assignments Example, no date shown (the publisher sells MIP). documentation.mip.com
Sherman Hsieh
Independent analysis of enterprise software — ERP, CRM and more
