1. Using Receivables Credit to Cash
  2. Intercompany Receivables Transactions

Intercompany Receivables Transactions

An intercompany transaction is a transaction between two entities with common ownership. The accounting for intercompany transactions is recorded separate from standard transactions in Receivables.

Receivables determines a transaction to be an intercompany transaction based on the first party (legal entity) and third party (bill-to customer) relationship defined in the intercompany accounting setup. When a transaction is marked as intercompany, the intercompany receivables account is used for accounting instead of the standard receivables account derived from AutoAccounting. This applies to transactions both created manually and imported using AutoInvoice.

Rules Governing Intercompany Transactions

Intercompany accounting is recorded for invoices, credit memos, on-account credit memos, debit memos, and chargebacks. The intercompany account derivation occurs after the transaction is created but before the intercompany transaction is complete.

These rules govern the use of intercompany transactions in Receivables:

  • Adjustments: You can make manual and automatic adjustments against intercompany transactions, but these adjustments aren't marked as intercompany and don't derive an intercompany account.

  • Distributions: You can't update the account distributions once an intercompany transaction is created.

  • Receipts: You can apply full or partial receipts to intercompany transactions with no restrictions.

  • On-account credit memos: You should only apply intercompany on-account credit memos to intercompany transactions. The related application pages display only intercompany transactions.

  • Receivables period close: Close a Receivables accounting period after closing the related intercompany period. If you close a Receivables accounting period first, this generates a warning to close the related intercompany period.

You can use the Receivables Aging by General Ledger Account report and the Receivables to General Ledger Reconciliation report to review intercompany transactions during reconciliation.

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