Intercompany cash transfer journal entries are an essential part of any business’s accounting process. A journal entry is a record of a financial transaction that requires both a debit and a credit to record the amount of money exchanged between two companies. This type of journal entry is used when one company transfers cash to another, such as when a parent company provides funding to its subsidiary. By recording the transfer in a journal entry, the companies can accurately track their finances and ensure they have sufficient liquidity to cover any debt that is due.