Intercompany Postings

InterCompany Transactions

You can set up intercompany accounts in your chart of accounts to record your intercompany transactions. These can be debtor, creditor, or client account types. If you trade with subsidiaries or other companies within your group, you can use Payment Run (PYR) and Payment Collection Run (PYC) to raise payments and receipts.

You can set up an intercompany journal type and business line import ledger interface to post intercompany journals. Transactions are posted to the source business unit. Using Ledger Inquiry (LAQ) you can run an Intercompany Awaiting Posting Inquiry to display a range of intercompany journal transactions that are currently awaiting posting.

Select Review to review the journals before posting to the target business unit. When you are ready to post, use the Intercompany Posting option in the Report Process field. The journals are then posted to the target business unit.

Intercompany Balances

You can charge interest on intercompany balances due to you. You can use a memo account to add interest to your outstanding balances and then post them to the relevant business unit.

Head Office Recharging

Your head office may want to levy a management charge on its subsidiaries each period. You can use Corporate Allocations to calculate and distribute charges across business units or ledgers. This is likely to form part of your standard period end accounting procedures.

Recharging Expenses

A company unit may buy goods or services that are used throughout the company. SunSystems enables you to treat these transactions in a number of ways:

• split the amount on ledger entry and post amounts to your intercompany accounts using journal presets.
• post the amount in total to your purchase account and redistribute it using the functions available in Corporate Allocations once the goods/services are distributed. You can post the allocated amount to intercompany accounts or directly to the expense accounts across business units.
• post the amount to a single purchase and expense account using global analysis to record how it is used by company units. This would be a way of treating each company within the group as a cost centre within a single ledger. This may be appropriate if you have a centralized accounting function.
• you can choose to keep a central purchasing function and to export data across business units on the basis of analysis to give each unit access to full reporting and inquiry facilities on their data.