Greetings. My company has just decided to literally split in two, across product lines. However, there are plans to share some of the legacy resources such as, coincidentally, yours truly as well as typical overhead items such as marketing, rent, etc.
How can such processes be executed and accounted for? For example, if I am on Company A's payroll, and company B agrees to pay for 50% of my cost, is this accomplished through a third party invoice? How would it be booked?
As an extension of this, we are currently on Sage 50 Professional. Since Finance is expected to support both companies, is there a way to take the current Sage setup and create a whole different instance for the spawned-off company?
The usual way to do it is through a recharge invoice - company A invoices company B for it's share of the business. Would advise you keeping good records of what was charged and the basis for allocation.
Yes, not sales, credited against the original cost.
Assuming that the companies are UK based, it's actually an important exercise from a tax perspective, as the company incurring the costs may be denied tax relief on the portions that relate to the other company if they don't recharge.
At least that used to be the position when I worked in industry about 10 years ago.
