Upstream Intercompany Transactions

You can record the upstream intercompany transactions as checks or expenses, jeanad77. Let me share insights about this.

You'll need to create a check or expenses to book the upstream intercompany transactions. In your scenario, you're recording a two-sided transaction like transferring funds out of one business and receiving funds into the other business.

Here's how:

1. Click the+ New.
2. Select either Check or Expense.
3. Choose the bank or payment account the funds are coming from.
4. Enter the Payee, Payment Date, and the Payment Method (optional).
5. In the Category column, select an Asset or an Equity account to reflect the funds going out of the business.
6. Note: You can consult an accountant or a tax authority to be sure to select the correct account.
7. Enter the amount to be transferred in the Amount column.
8. Choose Save and close or Save and new.

After sharing the steps, consult your accountant or tax professional to make sure you record these transactions in the correct accounts. For more details about the process above, open this link: Transfer funds between companies in QuickBooks Online.

Also, to learn more about keeping personal accounts out of the business, see this article: About mixing business and personal funds.

Always feel free to leave your comments below if you have other questions. I'm always here to help.

Thank you. I am actually looking to figure out which chart of account works best for this situation. We do not have access to the parent company's books, so I would only be booking the payment.

Hi there, jeanad77.

I'm glad to hear that my colleague provided you with the necessary assistance or information regarding your concern.
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@jeanad77 

There is no right way to record this.  You just want to make sure that the transaction is clearly identifiable so when the financial statements are consolidated, it is not counted twice.  I would set up an equity account called "Transfer to Parent Co." or something similar and assign that to the payment.  The equity section of your balance sheet is the best place for that transaction since you don't want it on your income statement and it's not an asset or a liability.