Intercompany transaction

You can expense an invoice to multiple companies even though only one company is responsible for the payment. The system keeps all companies in balance by using intercompany receivable and payable accounts defined for each company in the General Ledger application.

If Company A pays an invoice, but expenses a part of the invoice to Company B, the system automatically creates an intercompany receivable distribution to Company A and an intercompany payable distribution to Company B for the expensed amount. These distributions are created from the intercompany expense distribution line you specify for the invoice.

This example shows the general ledger distributions created from an intercompany expense invoice. Although this example uses only one intercompany distribution, you can specify multiple intercompany distributions. Assume this information about the invoice: Company A receives and pays a 100.00 invoice of which 70.00 is to be expensed to Company A and 30.00 to Company B.