My client was previously a sole trader and now has a limited company, both are active. How do I transfer funds from one company to another? I assume I need to use an intercompany account. Both are sharing the same bank account. I'm not sure how to set it up and how to record the transactions in the books. I'm using Sage Line 50.
To use intercompany accounts there is an account in each of the entities' ledgers corresponding to the other.
These accounts should balance with each other (or if more than two - should balance back to zero).
When you transfer funds from one to the other, you simply do the credit/debit with the bank (or relevant account) in each entity. So one entitity's journal will be the reverse of the other entity.
