Intercompany cost sharing through Interoffice Billing

Use Interoffice Billing to charge another office for shared costs

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. 
      
      

Client invoice options

There are two scenarios for intercompany cost sharing 

1. Supplier invoices that need to be split between or across offices, e.g. Legal Fees
2. Office-specific expenses that are managed through journals, e.g. Salary 

Depending on the scenario, you can use Client Job Invoices or Sundry Invoices to pass through a portion of your total cost to another office. 

Client Job Invoice based on Costs

Use this option if the source of the shared cost is a supplier invoice.   

1. Create a Job for intercompany client ICLA, e.g. ICLAGENX0001.  This job can be assigned to an internal agency Job Type, but needs to be set up as a Billable job to use Interoffice Billing. 
2. When the AMS office receives  a supplier invoice for fees shared with the LON office, AP can enter London's share of the total cost in separate line and code it to the intercompany Job ICLAGENX0001.   
3. When AMS is ready to invoice LON for these shared costs, click the Invoices option on the top of the Job.  
   
   
   
4. You are brought to the Search Client Job Invoices page.  Click Create a New Invoice.  This will launch the  Client Job Invoice Wizard for the intercompany job. Select Invoice from Costs to bill London the supplier costs posted to this job.
   
   
5. Follow the remainder of the steps from Invoice client jobs based on actual costs. 
6. Once the intercompany client invoice for ICLA is approved by the AMS office, Accountability will automatically create a supplier invoice in the LON office's Incoming Supplier Inbox.  The LON office can then process this invoice as any other supplier invoice. 
   
   

Client Sundry Invoice 

Use this option to charge another office for shared internal expenses, e.g. Salary 

1. Navigate to Accounting>Receivables>Client Sundry Invoices 
2. Click Create a New Invoice.  Fill out the Client Sundry Invoice Header with the intercompany Client and an optional Invoice Title. 
3. On the invoice line item details, select the GL Account for the pass through expense.  The Description line will auto-populate with the GL Account Name, but can be overriden as needed. 
4. Save and Approve the invoice.  Upon approval, the systemwill automatically create a supplier invoice in the LON office's Incoming Supplier Inbox.  The LON office can then process this invoice as any other supplier invoice.