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Post Info TOPIC: intercompany accounts


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intercompany accounts
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I am dealing with a client who has affiliate companies and needs to set up links between these companies in terms of bookkeeping.

I believe this is done by way of intercompany accounts?????

Can anybody give me a few pointers on how to set this in the chart of accounts and any other infomation.

I am using Sageline 50.

Many thanks.

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I normally set up a debtor or creditor account in the 1000 to 2999 range specifically for intercompany transactions. One tip is to obtain a statement from the associated company quite frequently to ensure your balance matches theirs. I've find it's all too easy to end up out of sink. If you're doing the books for both companies this obviously won't be a problem.

I find the most difficult aspect is when goods and services are recharged from one company to another. Other than this they are normally quite straightforward.   

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Thanks Dustin57

I will be doing the books for both companies so should hopefully be able to keep a track of it all!!!

In terms of using it with Sageline 50 there will obviously be 2 companies created seperately in Sage, each with a newly created intercompany nominal which will record the flow of funds, goods, services between them both - is this correct.






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Thats correct Nimac. Let me know if you need any further help.

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Thanks

I'm sure i'll be in contact about this soon!!!

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Just keep in mind the entry in an inter-company account needs to have a reverse entry in the account for the other relevant company.

So if you debit the inter-company account in one company (just as you might a debtor but kept in a separate account in the Nominal Ledger). you would credit the inter-company account in the other company (as that debtor would then treat you as a creditor in their accounts).

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