Intercompany transactions


S

Serenity

I am feeling really lost today so any help would be appreciated.

I have 4 companies owned by the same partners.

There are times when international payments are wired into the wron
company bank account. So we have to show the deposit in the wron
company and then transfer the money to the correct bank account.

So I show the deposit as intercompany escrow because its not reall
that companies money.

I have the same intercompany escrow showing on the correct company an
that is only used when the reverse happens. At the year end th
previous account would move money out of the main company into
subsidary for tax reasons. (they do not do consolidated returns) S
they showed a huge amount going out but no payable linked to th
payment. This has caused a lot of chaos for me.

Other wise Company A has a deposit of say $5000.00 that belongs t
company B so in order to recieve it I created the intercompany escro
account. It is not sales, it is not income, it is techincally
liability. Right

When Company B recieves the money it goes towards the open invoice
UNLESS it is the year end money being moved back into the mai
company.

Should I have an intercompany account in both my assets and m
liability accounts? OR should they be in the same place on bot
company books?

I consider it to be a contra-asset but QB does not really have a plac
for that...does it?

Sorry my post is so long. My mind is frazzled over this issue
 
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K

Karl Irvin

Don't use intercompany accounts for money put in the wrong company and then
transferred to the correct company.

When you write the check to the correct company, debit the account that was
credited when the erroneous deposit was recorded in the first company.
 
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G

Golden California Girls

Serenity said:
I am feeling really lost today so any help would be appreciated.

I have 4 companies owned by the same partners.

There are times when international payments are wired into the wrong
company bank account. So we have to show the deposit in the wrong
company and then transfer the money to the correct bank account.

So I show the deposit as intercompany escrow because its not really
that companies money.

I have the same intercompany escrow showing on the correct company and
that is only used when the reverse happens. At the year end the
previous account would move money out of the main company into a
subsidary for tax reasons. (they do not do consolidated returns) So
they showed a huge amount going out but no payable linked to the
payment. This has caused a lot of chaos for me.

Other wise Company A has a deposit of say $5000.00 that belongs to
company B so in order to recieve it I created the intercompany escrow
account. It is not sales, it is not income, it is techincally a
liability. Right?

When Company B recieves the money it goes towards the open invoice.
UNLESS it is the year end money being moved back into the main
company.

Should I have an intercompany account in both my assets and my
liability accounts? OR should they be in the same place on both
company books?

I consider it to be a contra-asset but QB does not really have a place
for that...does it?

Sorry my post is so long. My mind is frazzled over this issue.
What you need is two accounts in each company.
1) For the wrong company got the check.
2) For the profits going from A to B.

At all times the balance in the #1 account should be zero, end of day.
You get the wrong check in, deposit it, cross it to the #1 account, then
promptly write a check to the correct company and cross it to the #1
account and the balance is back to zero. So any time this account isn't
showing zero balance something is funny.

I'll let you figure out how you want to handle the equity and retained
earnings issues with the #2 account.
 

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