Corporate Finance Training Packet

Intercompany cost sharing using Interoffice Billing

Overview

This workflow gives subsidiaries within an agency network full control of how shared  expenses are posted.  

In this scenario, global agency AGY has multiple Accountability offices.  Its Amsterdam office (AMS) has incurred costs on behalf of itself and the London office (LON).  AMS is now ready to invoice LON for these costs. 

Master data set up

Your Accountability Admin needs to: 

1. Define an Intercompany Client and Supplier Type, e.g. Intercompany or Internal 
2. Create Interoffice-specific accounts to track all interoffice transactions.
   1. Accounts Receivable - Interoffice 
   2. Accounts Payable - Interoffice
3. Create a Posting to GL account record that maps your intercompany clients and suppliers to your Interoffice AR and AP accounts. 
4. Create an Intercompany Client for London assigned to the AMS office, e.g., ICLA. Make sure to assign this client to your intercompany Client Type.   
   
   

   

5. Create an Intercompany Supplier record for Amsterdam, e.g.  ICAL.  Specify the Default Office to be LON or apply a Country Restriction to the record if you want to have country-specific defaults defined like Tax Code and Currency.  Make sure to assign this supplier to your Intercompany Supplier Type.   
6. Set up Interoffice Billing for client ICLA in the AMS office
   1. Click on the Interoffice Billing Link on the top of the Client record 
       
      
      
   2. Set up the Interoffice Billing rules for ICLA as follows:   When ICLA is billed by the AMS office, automatically create a supplier invoice  for supplier ICAL in the LON office. 
      
      

Create recharge jobs for cost sharing

Job and Sub Jobs creation

1. The Brand Team creates a client job in the Main office by navigating to JOBS>Jobs and clicking the Create a New Job button.  This job will be used to bill the client.   
2. If there is a design component of the job that will be managed by the Studio team, click the Sub Job menu option from the job form and create a new sub job.
   
   
3. Populate the Sub Job details as you would a regular job. The sub job number takes the parent job number and appends a /01 to the first sub job.  For example, if the parent job number is JSMGENV0001, the Design/Studio sub job will be JSMGENV0001/01.  Ensure that the sub job office is assigned is set to Studio (STU). This sub job will be used for Studio interoffice billing, i.e. Studio bills the main agency for design tasks. 
   
   

Interoffice AP/AR: Create supplier invoice and allocate across recharge jobs

Job Reporting 

Overview: Available from the Jobs/Job Reports there are a range of reports that fall into 3 categories;

• Job Cost Reports –help you manage the review of job costs and billing
• Production Transaction Reports – these are summary reports analysing various job-related transactions for reporting and analysis
• Client Expenditure Reports – summaries of client /job expenditure for management reporting

Accounts Payables 

Invoice Management (Overhead, Fixed Asset & Payments) 

Payment Workflow

AP Reporting 

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