Question

Intercompany transactions

Forum|Forum|6 years ago
March 10, 2020
3 replies
36 views

I recently started working for a construction company, their original LLC was set up in Oklahoma (lets call this company A). They started a new LLC in Texas, and a new bank account to go with the TX LLC (company B).

They are finishing all of their company A jobs, but using the company B bank account for all transactions (over 7 months worth of transactions).

I set up a Due to/Due from account in each separate set of books. I know i Need to hit the cash account in company B.

But there a at least a few hundred transactions that will need to be recorded to company A to the Due To liability account to offset those expenses, and to match the asset account in company B. (the transactions are currently all sitting in a clearing account, which essentially matches the actual bank account). Should I go through one by one and add a line to each transaction in company A, moving it to the liability account and zeroing out the clearing account? Is there a better way to do this?

QuickBooks Enterprise Suite

Anna S

Good evening, @Carolynwells18.

I hope you're having a wonderful week so far. You upload transactions into other accounts by downloading them from your bank and bringing them into QuickBooks. This will allow you to get the transactions from the bank directly instead of trying to move them between files. The steps below will show you how:

First, go to your bank's website, log in, and download the transactions using a .qbo file.
In QuickBooks, select the File menu and press Utilities.
Hover over Import and choose Web connect files.
Next, find the file you saved and Open it.
Then, you'll either need to pick a bank account that already exists or create a new one.
Hit Continue when the dialogue box tells you the transactions were imported correctly, then push OK.

Now you can make sure your transactions uploaded correctly by going to the Bank Feeds Center and viewing them there. You may find this article about downloading bank feed transactions helpful as well.

As for moving your transactions to a liability account, I recommend reaching out to your accountant to make sure that is the best process for your books. They'll be able to tell you how to best record the assets and liabilities, so your book's balance isn't negatively affected.

Just hit the Reply button if you have any other questions. Enjoy the rest of your week!

L

LPercn

This is the same question that I have and I am wondering if you found the answer you were looking for. I know that this is a very simple process in dynamics or great plains but no one this forum or anyone that works here can see to tell me if the intercompany transfer or entries are able to line up on subsidiary ledgers or through multiple corporations. If you have an answer let m me know please

M

mv32

Level 8

Thanks for posting to the Community, @LPercn.

Since you have the same questions with Carolynwells18, you can follow the same steps provided by my colleague, @Anna S, on how to get transactions directly from your bank to QuickBooks.

There you can add the transactions from your bank and able to match them in QuickBooks.

Also, I'd suggest consulting your accountant about how can inter-company transfers can line up on subsidiary ledgers or multiple corporations. They know how to account, and give the best advice to keep your books accurate for this kind of scenario. Besides, it makes sense when they share with you the answer.

In case you need more answers about topics such as accounting synopsis, you can look for them here: Reports and accounting.

Please feel free to drop a comment below if you need further assistance. I'll be around to help. Stay safe and well!

S

SDS808

Hi - I have a similar request and the previously given solution of linking expenses to the bank feed won't work for us, as the entity that is paying bills on behalf of other entities, is doing so on behalf of several different entities and sometimes one single payment might even be allocated across several group entities. I.e. importing the entire bank feed to any given entity would import too many transactions.

Basically what I am hoping for, is a function whereby I can link an intercompany account in Entity A, with a corresponding intercompany account in Entity B. Then, I would raise bills and pay them in Entity A (Dr. Receivable from B; Cr. Bank) and add all details of the bill (Customer, Job, Class) in Entity A's file. This information would then be mapped to Entity B's file, where it would automatically record Dr. Expense (including Customer, Job, Class); Cr. Payable to Entity B.

Well that's the dream - is there any functionality like that out there? Currently I need to duplicate the entries in Entity A and Entity B, C, D...

V

Vietjohn

I would like to chime in as well. I am working with a client that has three entities and three separate QBO accounts, which seems a bit overkill on QuickBooks part of gaining profit.

The issue is that Company A used say $100,000 of Company B's money to pay for bills.

They then used Company B's money to pay for Company A's bills. It was more like $400,000. Company C also used about $500.00 of Company B's money.

Company C can simply cut a check and pay the $500.00 from a bill created by Company B to zero out this balance owed.

If I create bills for what Company A owes to Company B, it will create a huge negative balance in the banking account for Company A, which the owner would like to avoid.

If I create bills for what Company B owes to Company A, there will be a huge surplus in the banking account for Company A, which the owner would like to avoid.

How can I clean it up so that it balances out on both sides? From what I can see, there were four different people in the course of one year that entered these expenses as bills, transfers, journal entries, and invoices.

I would much prefer to change everything to a bill and a payment instead of having four different methods that do not add up between the two companies. Any advice?

K

Klent

Level 8

Hi there, Vietjohn.

I can share some tips in handling that transaction.

Since company A is using company B's money to pay the bills, you can set up a liability account in company B's chart of accounts. This account is for company A's payables. Once done, you can create a journal entry to pay company A's expenses. Then, use that liability account as the expense account for the transaction.

In company A, create a journal entry for the expenses paid by company B. Take note that you may need to consult an accounting professional in performing this process if you're not familiar with accounting.

I'm also adding this article to learn how to move money from one account to another: Transfer funds between accounts.

You can always find me here if you have any other concerns or follow-up questions. Have a good one.

Y

Yolanda UV

I would like to chime in as well. I have Company A that pays multiple credit card bills that have some charges belonging to Company B. We import the transactions into Company A since company A pays the bills. But every transaction that belongs to Company B gets coded to a Due From Company B account on Company A's QBO. There are hundreds of transactions that get imported this way. We lose detail as to the specific expense and have to manually record the transactions again into Company B's QBO in order to offset the Due From account with a Due To company A account and then expense them to the appropriate expense account. Is there an easier way to transfer or import the transactions being imported into Company A to also import them into company B and avoid manual entry?

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