Interoffice Allocation function

This is a ‘month end’ function that allows the distribution of the system inter-office clearing account balance automated journals,  into designated Asset or Liability accounts based on the overall net inter-office balance between offices.

So that the balance is allocated to an asset account when the balance is a debit or a liability account if it is a credit.

For those of you have experienced that annoying situation where an asset type account appears on the balance sheet as a negative amount in the asset section will really appreciate what this function does.

To set this up, go to Accounting /General Ledger/General Ledger Accounts click on the link Posting GL Accounts, then Inter-Office Posting Accounts

For each set of Offices – define a relationship as to which ‘ASSET ACCOUNT’ balances between those offices should be posted (when it is a debit balance) and which ‘LIABILITY ACCOUNT’ balances should be posted (when it is a credit balance’

On the SEARCH INTER-OFFICE POSTING ACCOUNTS’ page, click the link Create Allocation Journals – you should carry this out as the final step in your month end close after all other transactions/journals for the month are complete. This process will:

Create Journals to distribute the balance of the system Inter-Office Account to the defined Asset and Liability accounts as per the defined relationships above – so that the system Inter-Office-Account has a zero balance at month end

Reverse those journals into the following Accounting Month
 
Some companies may elect to just run this process at year-end rather than for every month end close.