My client has 3 companies, each employing there own members of staff. He sometomes gets staff from one company to work for the other ones to cover for leave, sickness etc.. even though they are not on the payroll and are not legally employed by them.
Not for me to tell him how to run his businesses, my only concern is how to reflect this is his books.
e.g. if a staff member of one company works for one of the other companies, the manager of the first company want to get a payment from thr second company to cover the loss of the staff for the day - making sense so far? Would it just be a case of one company issuing an invoice to another or just a straight bank transfer to cover the cost. i'm not sure about just a straight bank transfer as they are different companies and surely i would have to raise an invoice etc....
Sorry to ramble, i have been thinking about this for ages, even asked an accountant who was of no help.
I would think the best way to do this would be for one company to invoice the other company for the cost of the employee and then paid. This way you have a paper trail as to why the payment was made.
Can't understand why an accountant was no help, but hopefully we will be on here.
or if all 3 companies are within the same group, then you could do an inter company transaction in each company. no physical monies need to take place then.
as you said, its not for you to tell him how to run his businesses and I can understand the managers of each business for lost employee time etc but does the owner, your client, want to cross charge for the employee time or is it a case of an unoffical kind of agreement?? He may not want to cross charge for this?
Are the 3 companies in the same building/office? Do the employees cover for work and do thier own work or do they go AWOL from their job to cover?
In order to cross charge, an agreeable rate would need to be noted first, then it would just be a case of invoicing each company from the supply co.
The companies are in different locations all offering the same type of service, the cross charge will just be the hourly rate of the employee times the number of hours.
The owner has a complicated financial set-up so its a job and a half trying to keep on top of it all but thats bookkeeping for you!!!!
