Overview of intercompany accounting in Sage 300 CRE

1. The Balance Sheet will balance at the Balance Sheet level.
2. The system looks to Intercompany (I/C) accounts on the General Ledger Prefix first.
3. Cash tasks (from the Tasks menu) create intercompany transactions automatically.
   
   NOTE:

   An exception is Accounts Receivable (AR). AR creates intercompany for both Enter Invoices and Enter Cash Receipts.

4. Checks and deposits from any application create the intercompany debt.
5. The bank transfer task in Cash Management pays back the intercompany debt.

Set up General Ledger

Example 1: Separate accounts for each balance sheet prefix

1. Base Accounts: Give each Balance Sheet level prefix its own Intercompany Receivable and Intercompany Payable account.
2. Prefixes: For each balance sheet level prefix, enter that prefix's I/C Receivable and I/C Payable base accounts.
3. Generate Accounts: A prefix never owes/receives funds from itself. Each prefix generates full accounts for all the OTHER prefixes I/C base accounts.

Example 2: Combined Accounts

1. Base Accounts: Setup one I/C Receivable and one I/C Payable.
2. Prefixes: Leave the I/C base account fields blank.
3. Generate Accounts: Generate I/C accounts for all balance sheet level prefixes.
4. Reports: All auto generated I/C transactions have other fields:
   • Intercompany Payable Account
   • Intercompany Receivable Account
5. You can use the Intercompany Accounting reports on the GL menu for reconciling.

Setting up other applications

Enter I/C default accounts in the application settings. This is a required set up. Sage won't create intercompany entries if you don't designate the default I/C accounts for each application. You can only have one account of each type. 

Setting up Cash Management

Overview

If you use prefixes in General Ledger, Cash Management (CM) always compares the debit and credit prefixes. You must have default intercompany accounts on the Prefix and CM Settings (File, Company Settings). You'll receive an error message in Edit Register that the Intercompany receivables and Intercompany Payables fields are blank. The transaction won’t post. The message goes on to detail the accounts involved and instructs you to set up defaults in CM settings.

Set up the Bank Account

1. Go to Cash Management, Setup, Bank Account.
2. Select a bank account.
3. Go to the GL Cash Accounts tab.
4. If CM Settings doesn't allow separate cash accounts per application, only the general cash account is available. This field must have a full account. If the non-cash account in other applications isn’t this prefix, it creates intercompany accounts.
5. If CM Settings allows separate cash accounts per application, cash account fields are available for every application checked. A base account set as the cash account lets Sage match the transaction's cash prefix with the non-cash prefix. It doesn't create intercompany transactions. Full accounts result in intercompany transactions if the cash account prefix and the non-cash prefix don’t match.

Intercompany bank transfers

Sage treats bank transfers as a pay-back of an intercompany loan. When Entity A makes an intercompany transfer of funds to Entity B, Entity A's liability and Entity B's receivable decrease. This creates a loan repayment for the original transaction

Edit Register

Sage creates intercompany transactions when a CM transaction has different prefixes on the debit and credit accounts. For example, a withdrawal that credits cash account 10-1000 and debits account 30-6010 creates intercompany entries.

If the prefixes are different, it creates I/C payable and I/C receivable entries for General Ledger as follows:

For Deposits and Positive Adjustments

Intercompany payable: Uses the base account entered on the prefix record, at the balance sheet level, in General Ledger. If no base account exists on the prefix record, Cash Management uses the base account entered in CM Settings (GL Information tab). The prefix comes from the cash account.

Intercompany receivable: Uses the base account entered on the prefix record, at the balance sheet level, in General Ledger. If no base account exists on the prefix record, Cash Management uses the base account entered in CM Settings (GL Information tab). The prefix comes from the credit account.

For Withdrawals and Negative Adjustments

Intercompany payable: Uses the base account entered on the prefix record, at the balance sheet level, in General Ledger. If no base account exists on the prefix record, Cash Management uses the base account entered in CM Settings (GL Information tab). The prefix comes from the credit account.

Intercompany receivable: Uses the base account entered on the prefix record, at the balance sheet level, in General Ledger. If no base account exists on the prefix record, Cash Management uses the base account entered in CM Settings (GL Information tab). The prefix comes from the cash account.

For further information, refer to the GL Help topic "Verifying intercompany information".

How does Accounts Payable determine when to use intercompany accounting and which accounts to use?

How do I print a check as part of a Bank Transfer?

What reports can I use to reconcile intercompany account balances?