Open topic with navigation

Using Intercompany Accounts Receivable

You can use intercompany to operate an intercompany accounts receivable (A/R) function for businesses with multiple companies. When goods or services are sold to a third-party customer, you can distribute the revenue to other companies in the group. Each receiving company can analyze the revenue by customer.

In this intercompany scenario, the source companyCompany that initiates an intercompany transaction. is the company in which the intercompany A/R function is raising sales invoices or sales credit notes, and a destination companyCompany that receives the costs during an intercompany transaction. is one of the companies to which revenue is being distributed.

Operating an Intercompany A/R Function

When the intercompany A/R function raises a sales invoice or sales credit note, the destination company must be specified in the Destination Company field on sales lines. When a sales line has a destination company, that line becomes an intercompany line.

If you don't want to distribute the full amount of the intercompany line to the destination company, you can adjust the line's Destination Unit Price and Destination Quantity to the preferred amounts. Any unallocated amount remains with the source company.

When the intercompany A/R function posts a sales invoice or sales credit note with intercompany lines, a transaction and intercompany transferObject used as a staging location for data used when transferring costs to other companies in the same organization. record are created in the source company. Note that:

• A transaction line generated from a sales intercompany line derives its accounts payable GLA and dimensions from the destination details on the intercompany definition between the source company and the destination company.
• An intercompany transfer line derives its dimensions and product details from the sales intercompany line.

When the intercompany transfer record is processed in the destination company it generates a journal. Note that:

• The customer account on the sales invoice or sales credit note in the source company is identified in the External Counterparty field on the journal header.
• A journal line item generated for a sales intercompany line derives its dimensions from the intercompany transfer line, and derives its GLA from the product.
• The journal line item for the balancing entry derives its accounts receivable GLA and dimensions from the source details on the intercompany definition between the destination company and the source company.

If you add lines for different destination companies on the same sales invoice or sales credit note, a separate intercompany transfer record is created for each destination company when you post the document.

For more information about how to create sales invoices or sales credit notes, see Creating Sales Invoices or Creating Sales Credit Notes as appropriate but note the following:

• If an intercompany account is specified on the sales document header, you cannot create an intercompany line.
• When the sales document has an intercompany line, you cannot add a payment schedule or income schedule.

Note:

Note

When posting the sales document in the source company, if only part of a sales intercompany line has been distributed to the destination company, a second transaction line is created for the amount that remains with the source company. Tax lines are unchanged.

If you apply exchange rate overrides on the sales document in the source company, the overrides are only applied on the destination journal when the source and destination companies have the same home and dual currencies.

© Copyright 2009-2018 FinancialForce.com, inc. All rights reserved.
Various trademarks held by their respective owners.

Open topic with navigation