Intercompany accounting in Sage Timberline Office

The Rules - This is how Intercompany accounting in Sage 300 Construction and Real Estate works.

1. The Balance Sheet will balance at the Balance Sheet level.
2. The system looks to Intercompany (I/C) accounts on the General Ledger Prefix first.
3. Cash tasks (from the Tasks menu) create intercompany transactions automatically.
   Note: An exception is Accounts Receivable (AR). AR creates intercompany for both Enter Invoices and Enter Cash Receipts.
4. Checks and deposits from any application create the intercompany debt.
5. The bank transfer task in Cash Management pays back the intercompany debt.

Set up General Ledger:

Example I: Separate accounts for each balance sheet prefix

1. Base Accounts
   Each Balance Sheet level prefix should have its own Intercompany Receivable and Intercompany Payable account.
2. Prefixes
   For each balance sheet level prefix, enter that prefix's I/C Receivable and I/C Payable base accounts.
3. Generate Accounts
   Since a prefix never owes/receives funds from itself, each prefix generates full accounts for all the OTHER prefixes I/C base accounts.

Example II: Combined Accounts,

1. Base Accounts
   Setup one I/C Receivable and one I/C Payable.
2. Prefixes
   Leave the I/C base account fields blank.
3. Generate Accounts
   Generate I/C accounts for all balance sheet level prefixes.
4. Reports
   All auto generated I/C transactions have additional fields:
   • Intercompany Payable Account
   • Intercompany Receivable Account

   You can use the Intercompany Accounting reports on the GL menu for reconciling.

Setting up other applications:

Enter I/C default accounts in the application settings. Only one account of each type is allowed so Rule 2 usually applies.
Note: This is required. Intercompany entries will not be created if the default I/C accounts are not designated for each application.

Setting up Cash Management:

Overview:

If prefixes are used in General Ledger, CM always compares the debit and credit prefixes.You must have default intercompany accounts on the Prefix as well as CM settings (File > Company Settings). If not, an error message in Edit Register will display Intercompany receivables and Intercompany Payables fields are blank. The transaction will not post. The message goes on to detail the accounts involved and instructs you to setup up defaults in CM settings.

To set up the Bank Account:

1. In Cash Management, from the Setup menu, select Bank Account.
2. Select a bank account.
3. Go to the GL Cash Accounts tab.
   • If CM settings is not set to allow separate cash accounts per application, only the general cash account field is available. This field must have a full account. If the non-cash account in other applications is not this prefix, intercompany accounts are created.
   • If CM settings is set to allow separate cash accounts per application, cash account fields are available for every application checked. A base account as the cash account allows the applications to match the cash prefix with the non-cash prefix on the transaction and intercompany transactions are not created. Full accounts result in intercompany transactions if the cash account prefix and the non-cash prefix of the transaction do not match.

Intercompany bank transfers

Bank transfers are treated as a pay back of an intercompany loan. When Entity A makes an intercompany transfer of funds to Entity B, Entity A's liability decreases, as does Entity B's receivable, creating a loan repayment for the original transaction

Edit Register
Intercompany transactions are created when prefixes on the debit and credit accounts for a Cash Management transaction are different. For example, a withdrawal that credits cash account 10-1000 and debits account 30-6010 creates intercompany General Ledger transactions.

If the prefixes are different, I/C payable and I/C receivable entries are created for General Ledger as follows:

1. For Deposits and Positive Adjustments
   Intercompany payable: Uses the base account entered on the prefix record, at the balance sheet level, in General Ledger. If no base account exists on the prefix record, Cash Management uses the base account entered in CM Settings (GL Information tab). The prefix comes from the cash account.

   Intercompany receivable: Uses the base account entered on the prefix record, at the balance sheet level, in General Ledger. If no base account exists on the prefix record, Cash Management uses the base account entered in CM Settings (GL Information tab). The prefix comes from the credit account.

2. For Withdrawals and Negative Adjustments

   Intercompany payable: Uses the base account entered on the prefix record, at the balance sheet level, in General Ledger. If no base account exists on the prefix record, Cash Management uses the base account entered in CM Settings (GL Information tab). The prefix comes from the credit account.

   Intercompany receivable: Uses the base account entered on the prefix record, at the balance sheet level, in General Ledger. If no base account exists on the prefix record, Cash Management uses the base account entered in CM Settings (GL Information tab). The prefix comes from the cash account.

   For further information, refer to the GL Help topic "Verifying intercompany information."