Enabling Intercompany Time and Expenses

In OneWorld accounts, before you can enter transactions for an entity such as a customer, a vendor, or an employee, you must assign a single subsidiary to that entity. Transactions involving a customer or vendor generally impact the accounts of the subsidiary assigned to that customer or vendor. Time and expenses entered for an employee generally impact the subsidiary assigned to that employee.

In a multi-subsidiary environment, some transactions may involve more than one subsidiary, impacting the accounts of more than one subsidiary. For example, employees assigned to one subsidiary may be required to enter time or expenses for customers assigned to a different subsidiary. The Intercompany Time and Expense feature enables entry of intercompany time and expenses, and the transfer of time, expense, or both charges from one subsidiary to another.

You can enable the Intercompany Time and Expense feature at Setup > Company > EnableFeatures,, on the Accounting subtab.

Note:

If you enabled this feature after April 2014, when you created a qualifying journal entry the system created a single Intercompany Clearing Account of the Type: Other Current Asset. The account was set to the Root Subsidiary and included all child subsidiaries. Adjustment journal entries correctly posted to this new account, and no other currency-locked Intercompany Clearing Accounts were created.

If you enabled this feature prior to April 2014, when you created a new adjustment journal entry the system created a new Intercompany Clearing Account (no currency), which became the parent of all other existing clearing accounts. New adjustment journal entries use this parent account, and the existing currency-locked Intercompany Clearing Account remained intact. If you edit a transaction that originally posted to the existing currency-locked Intercompany Clearing Account, the GL Impact of that transaction affects that account.

After this feature is enabled, you can set the following OneWorld preferences at Setup > Accounting > Accounting Preferences > General subtab:

When time and expenses are entered, their impact on employee subsidiary accounts is recorded. For customers that have a subsidiary different from employees, create adjusting journal entries to reverse the impact on employee subsidiary accounts and register the impact on customer subsidiary accounts. You can manually adjust for intercompany time by creating intercompany journal entries. Adjustments for expense transactions can be created manually, or they can be automated by generating specialized transactions called intercompany adjustments.

For information about manually creating journal entries to adjust for intercompany transactions, see Making Advanced Intercompany Journal Entries.

For information about generating automated intercompany adjustments, see Creating Intercompany Adjustments for Time and Expenses.

For a sample scenario, see Example Intercompany Adjustment Scenario.

If you plan to enable the Intercompany Time and Expense feature, consider the following:

When you enable this feature, the system creates an intercompany clearing account. This clearing account prevents you from modifying the subsidiaries associated with all account types except Bank. For more information, see Intercompany Clearing Account.

Warning:

If the Intercompany Time and Expense feature is not enabled, users cannot enter time or expenses where the employee and customer have different subsidiaries.

Related Topics

Journal Entries in OneWorld
System-Generated Journals for Payments
Elimination Journal Entries
Making Advanced Intercompany Journal Entries
Making Intercompany Journal Entries

General Notices