Inter-Entity Transactions

• By zoltan-szakal
• September 14, 2018

Right now you might be asking yourself “What are inter-entity transactions and when would I need them?”  In companies made up of multiple operating entities it often becomes necessary to transfer funds and assets between entities.  As such an Inter-entity transaction can be defined as a transaction carried out between two entities of the same company.  A few examples of when an inter-entity transaction would be used are as follows:

• Entity A pays a bill belonging to Entity B.
• A payment is received in the bank account belonging to Entity A but the invoice was created in Entity B.
• A corporate entity pays for an expense belonging to 1 or more of the operating entities.
• An asset is transferred between entities.

Straight out of the box Sage Intacct’s Multi-Entity Shared implementation provides superior functionality for Automating Inter-Entity Transactions.  If one entity pays a bill using the corporate bank account, Intacct automatically generates an inter-entity receivable (IER) at the entity level and an inter-entity payable (IEP) at the corporate level.  This applies to both transactions between top level and subsidiary entities, as well as transactions between entities.

During implementation it is important that GL Accounts be set up specifically in order to track inter-entity transactions.  If you aren’t sure about your setup, please contact Black River Support directly so we can assist – [email protected]

When a bill is paid in AP using a bank account from a different entity, Intacct knows to automatically create the inter-entity transactions (the due-to and due-from transactions).  In the following scenario The Corporate (top) Entity is paying a bill that was created and posted in Entity 10.  As shown below the line item on the bill is assigned to Location 10:

When the payment is made, however, it is done at the Top Entity using the Select Bills to Pay functionality.  It is important when filtering the bills in the select bills to pay screen that you ensure that ‘All’ is selected for ‘Pay Entities’.

Similarly when cash is received for an AR invoice and the money is received into a bank account of a different entity, Intacct knows to automatically create the inter-entity transactions (the due-to and due-from transactions).

With Sage Intacct you’ll save countless hours with our automated inter-entity transactions.