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How do I record an intercompany transfer?

We have two companies in QB.  We paid for a service using Company A's credit card, but the expense was recorded in Company B, because it was for that company.  I'm entering the credit card statement transactions in Company A, but what account would I debit for the company B expense, and how do I record the payment in company B?

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Best answer 10-15-2018

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Two companies mean two QBO subscriptions Company A create...

Two companies mean two QBO subscriptions

Company A
create a liability account called due from B in company A chart of accounts
Pay the company B expense and use that liability account as the expense for the payment

Company B
Enter a payment to A in the amount of the expense paid and use the company expense account as the expense for the payment

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I am looking for a semi automated version of intercompany...

I am looking for a semi automated version of intercompany transactions. When I post to due /to from account, I want it to prompt to post into a different set of QBO books, the corresponding entry needed. If I do this you do that scenario. Basically create set of rules to post across to another set of books you have permission to be in. Thought maybe there was a QBO app or an IFTTT that could be set but nothing I could find.
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I am in the same boat.  I downloaded the intercompany exp...

I am in the same boat.  I downloaded the intercompany expense transactions into Excel but have no mechanism for loading them into the other QBO file.  The Business Importer app will only load cash expenses that require a bank account.  The QBO converter from Big Red Consulting will only load bank, credit card or stock transaction.  What other alternatives are there?  Thanks!  
Not applicable

I am in the same boat.  I downloaded the intercompany exp...

I am in the same boat.  I downloaded the intercompany expense transactions into Excel but have no mechanism for loading them into the other QBO file.  The Business Importer app will only load cash expenses that require a bank account.  The QBO converter from Big Red Consulting will only load bank, credit card or stock transaction.  What other alternatives are there?  Thanks!  
Established Community Backer ***

Two companies mean two QBO subscriptions Company A create...

Two companies mean two QBO subscriptions

Company A
create a liability account called due from B in company A chart of accounts
Pay the company B expense and use that liability account as the expense for the payment

Company B
Enter a payment to A in the amount of the expense paid and use the company expense account as the expense for the payment

Established Community Backer ***

Company A's entry is to Other Current Asset = Loaned to a...

Company A's entry is to Other Current Asset = Loaned to another and owed back to Company A.

Company B has the Expense and the Liability. Company B should enter the Expense for the real name:

"We paid for a service using Company A's credit card"

For instance, Company B will use Enter Bill and put the real name, in the case of 1099-Misc reporting. Then, you enter on the next blank line on the Expenses tab of that bill a Negative total posting to a Liability account. Hit Recalc. This Bill is $0 due to the Service Provider and now there is Debt payable to Company A.

Company B pays Company A by paying that Liability account as with any Debt repayment.

Company A makes the Deposit entry as "from" the Other Current Asset account.


Senior Explorer **

Re: How do I record an intercompany transfer?

Basically, it would be a loan from one company to the other.

My suggestion: the company making the loan, set up an loan receivable account.

The company receiving the loan, make an loan payable account.  

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Re: Two companies mean two QBO subscriptions Company A create...

If Company A owes money to a vendor, and 

Company B owes the same person that is our customer in company B, and this person reduced the bill amount in Company A in the amount that she owed us in Company B, How do I record this inter-company transaction?

Established Community Backer ***

Re: Two companies mean two QBO subscriptions Company A create...

@Cohn 

 

"If Company A owes money to a vendor, and

Company B owes the same person that is our customer in company B, and this person reduced the bill amount in Company A in the amount that she owed us in Company B, How do I record this inter-company transaction?"

 

Well, first, you don't have to let Vendors and Customers do this at all. The decision to Barter has to be made by Both parties, and in this example, nothing changes for A or B because you still have to deal with what is between them.

 

Company A = you

Company B = me

Jane Doe is Vendor to Company A and Customer to Company B. Jane Doe needs to be told not to Commingle Company A and B in her own Business activities.

 

This is Not What happens in any condition: "and this person reduced the bill amount in Company A in the amount that she owed us in Company B"

 

Everything in Barter is handled in Full = Gross. You don't reduce the Bill; you reduce the Banking or Funds expectation.

 

Example:

 

Company A has expense of $500 to pay for Graphic Design services. Company B sold some Safety Gear to Jane Doe, for $300. You are describing that Jane Doe issued the Graphic Design charge as $200, which is Wrong; that is the Net Banking, not the Gross Charges.

 

Here is what happens in reality:

 

Company A has the Expense entry as $500, with the negative or "vendor credit" as an offset of $300 to Other Current Liability. Company B has an entry for the Gross Sale, for $300. They treat it as paid in full, and the "deposit" is offset to Other Current Asset.

 

Company A pays $300 to Company B. Company A lists they are paying out that liability to Company B. Company B has a Deposit entry to Banking to show they got repaid for that Other Current Asset.

 

In essence, Company B just collected the amount due from Jane, by getting the funds from Company A. Company A always had a Gross Expense of $500 and Company B always had a Gross Sale of $300. That never changes, just because some Banking is forfeited in lieu of a three-way Barter, which should never occur because you let the Vendor define the relationship between Companies A and B.

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Re: Two companies mean two QBO subscriptions Company A create...

Rustler, you say create a "liability account" to record what is due from Company B...shouldn't that be an "asset account"?

Community Explorer **

Re: Two companies mean two QBO subscriptions Company A create...

In company B what is the payment account we have to take? if we select our bank the balance will automatically decrease from actual

Senior Explorer ***

Re: Two companies mean two QBO subscriptions Company A create...

If you PAID from a cash account (Petty cash, check from a checking account) then that IS the payment account, similarly if the PAYMENT was from a credit card. If you don't post the payment or charge FROM the account it was made, it won't be there to reconcile. Its the OFFSET account which is the key. The offset is usually an expense, but if the expense is for a "Company B" expense, then you need to create a TWO-PART transaction. Part ONE pays the amount (from Company A's cash/bank/credit card) but OFFSETS to the "Due to/from Company B" liability account (in Company A's COA), NOT AN EXPENSE ACCOUNT IN Company A. In Accounting-speak, the Paying account is Credited, and the Due to/from is Debited (note this works whether the Due to/from is an Asset or Liability). This is often where it gets confusing... Part TWO, records a payment in Company B's "Due to/from Company A" liability account. to the requisite expense account. Again, in Accountant-speak IN COMPANY B's COA " the paying account is credited (here it the DUE TO/FROM ... because Company A paid the expense), and the actual Company B Expense is debited. Now the expense has been transferred. Company A: Paid from Account (Bank/Credit Card) ==> Due to/from Company B (liability) Company B: Paid from Account (Due to/from Company A) ==> Expense It might be easier to consider the "Due to/from" account as "Due to from XXX" on BOTH Lines above just to see the pattern. Note that BOTH Company A and Company B have a "Due to/from ... " account" Both companies now have equal, but opposite (DR/CR) Due to/from transactions to be cleared. Company B now writes a check (CR) from cash/bank (offset the Due to/from .... that is DR) to Company A. Company A deposits (DR) to cash/bank the Company B Check, but offsets Due To/From .... that is CR). Company B: Pays check (to Company A) ==> Due to/from Company A Company A: Deposits Check (from Company B) ==> Due to/from Company B

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