Running a group as one business: consolidation, intercompany policy, and where the cash actually is

Each entity gets its own local bookkeeper, its own local accountant, and its own local view of the numbers — reasonably, since local compliance requires it. What's missing is anyone whose job is the view across all three: consolidated profitability, intercompany flows, and where cash is actually held versus where it's actually needed.

Intercompany service or royalty fees net out to zero pre-tax on a proper consolidation — but they don't net out on tax, because each entity is taxed locally on its own post-intercompany result. The same fee structure that looks neutral at the group level can meaningfully shift the group's blended effective tax rate depending on which entity is taxed at which rate.

A parent with a well-capitalized Israeli entity and two subsidiaries running lean on cash isn't unusual — and it isn't automatically a problem, provided someone is watching it. Left unmanaged, it becomes one: a subsidiary short on local cash while the group as a whole is sitting on a comfortable balance nobody has moved to where it's needed.

Not in any single entity's bookkeeping — each one is usually fine on its own. It breaks down in the absence of anyone whose scope is explicitly the group: setting intercompany policy deliberately rather than by default, and treating FX exposure on inter-entity movement as a real, named cost rather than something that gets absorbed into a general banking-fees line.