How do i Post inter-company sales invoices onto sage for the company issuing the sales invoice? - The Book-keepers Forum (UK)

sage user · Member

How do i Post inter-company sales invoices onto sage for the company issuing the sales invoice?

RobH · Expert

Hi Yvonne,

monday morning syndrome I think, but I cannot quite understand the question, can you be abit more explicit and we'll have a bash at it for you!

Rob

sage user · Member

sorry i wrote this half asleep last night okay this is the sceneario.

We are a 100% subsidary of a parent company.
Just joined the company 2 months ago
and also just getting sage into the business.

I am posting onto sage sales invoices, and i come accross invoices issued to our parent company for services we have provided them.

My question is so i post these invoices like i have posted all other customers on sage as say 4000(sales nominal code) or do i post this invoices in another section say assets on baance sheet as these invoices are obviously inter-company transactions.

Or can i create another sales codes for purly intercompany invoices but still under the sales section?

I hope this is clearer??????

sage user · Member

sorry i wrote this half asleep last night okay this is the sceneario.

We are a 100% subsidary of a parent company.
Just joined the company 2 months ago
and also just getting sage into the business.

I am posting onto sage sales invoices, and i come accross invoices issued to our parent company for services we have provided them.

My question is so i post these invoices like i have posted all other customers on sage as say 4000(sales nominal code) or do i post this invoices in another section say assets on baance sheet as these invoices are obviously inter-company transactions.

Or can i create another sales codes for purly intercompany invoices but still under the sales section?

I hope this is clearer??????

Wella · Expert

Hi Sage User

It may be a case of company policy to the way intercompany charges are handled. It might an idea to confirm if there are special arrangements.

I know some companies like to keep costs down on intercompany transfers and supply at cost. Some companies like to see a true profit and cost for the companies and supply on normal trade terms.

I would be inclined to treat them like any other customer. For analysis purposes, it might be convienient to have a seperate sales code but that probably isn't necessary, unless sales are made at cost price or plus small percentage.

Just my thoughts

Bill

sage user · Member

Thank you Guru ....

I went further to ask what the invoices were it turns out it is more of a recharge invoice plus a 20% mark up . This is we pay unbehalf of the other companys all the salaries and admin costs and end of month we then send a sales invoice to the company requesting for the money as well as an additional 20% mark up.

Same goes to the parent company they pay our suppliers and end of the month send us a bill.

I guess my question is should i still post this as sales ???

sage user · Member

how do i records invoices were it turns out it is more of a recharge invoice plus a 20% mark up . This is we pay unbehalf of the other companys all the salaries and admin costs and end of month we then send a sales invoice to the company requesting for the money as well as an additional 20% mark up.

Same goes to the parent company they pay our suppliers and end of the month send us a bill.

I guess my question is should i still post this as sales ???

Shamus · Forum Moderator & Expert

Hi,

sorry Bill, got to disagree with you on this one.

Not a lot of time Sage User so just a quick answer before you make a mistake.

Inter company invoices MUST!!! be kept separate so create a new code in the same area as the existing code.

The reason the inter company must be kept separate is that when the group accounts are prepared inter company trade, loans and interest must be eradicated otherwise the financial statements will cease to give a true and fair view to the outside world.

Inter company trade used to be one of the primary forms of earnings management to manipulate profits.

For reference refer to the following financial reporting standards :

FRS2 Group Accounts
FRS3 Reporting Financial Performance
FRS5 Reporting the substance of transactions.

Kind regards,

Shaun.

Wella · Expert

Hi Shaun

No need to be sorry about disagreeing with me.

I realised that what I had written didn't apply when I saw the last reply back.
I am surprised that there isn't a company/ group accountant to advise.

What's keeping you away?

Bill

sage user · Member

Thank you shaun. So let me get this even though the subsidary, has paid salaries onbehalf of the parent and now issued a sales invoice. Should i not record this sales invoice under the one of the balance sheet code. or you are saying it is wise to record it under the sales nominal code but create a different number other than the 4000 that is allocated to sales. despite the actually sale been a recharge to salaries .

And bill unfortunately their accountants they outsource and they are the ones that are actually recording these invoices as straight sales not seperately but i was the one that actually spotted it. The thing is that i know you cannot just record it as sales because i know when you do come to do the group account you will actually have to eliminate any intercompany transaction . so for my i need to be certain for the individual company where i should actually record the transaction.

Shamus · Forum Moderator & Expert

Hi Bill,

it's some banking data analysis stuff rather than bookkeeping today.

Really looks as though I'm being sucked back into that world. Within the next 48 hours I should hear back about whether they need me to be working in London during the week which will pretty much scuttle my accountancy studies for the next 3-6 months... Then again, the compensations pretty good so I'm not going to complain if this current bit of work turns into a long term gig.

Amazing, seems like Phillip (the lost Amigo) and myself are running a tag team as to whose contributing to this site.

Know what you mean about the group accountant. You would expect this sort of organisation to have someone who understands the basics of how group accounts works. Thankfully it does sound quite simple from the explanation so far. Gets messy when there's associates and part owned subsidiaries.

Hows life treating you today matey?

talk in a bit,

Shaun.

Shamus · Forum Moderator & Expert

The subsidiary should not pay the salaries of the parent.

This really is an inter company loan.

The subsidiary has loaned the parent the money the pay it's employee's. The money has however gone outside the company (to the employee's) so you need the accountants view as to how that should be treated.

It sounds as though the salaries need to be attributed to an inter company loan account and the parent still needs to ensure that the payment of its salaries are properly recorded through its own books.

For the inter company sales I would go for your next available nominal code in the 4000 range.

Good luck,

Shaun.

Wella · Expert

Hi Shaun

Life is good thanks

Hey, you have to do what ever keeps the wolf from the door. Fingers crossed for agood result.Hope we don't lose you completely

Bill