Intercompany transactions & posting [in-depth guide]
Guide contents: Setup GL Company Mapping | Entering Transactions | Journal Entries | Vendor Invoices | Payment | Client Invoices | WIP Posting
Within Workamajig, you can track several different financial companies, projects, and other information. When you use GL companies, the system creates hard walls between what can be paid and by which financial entity. For instance, you cannot create a vendor invoice for one company and pay it with a check from another company. Well, you can't unless you turn on 'intercompany mappings'. The 'intercompany mappings' allow you to specify a set of to-do's and due-from accounts for AR, AP, and journal entries.
Watch our Intercompany Overview [video] guide.
Setup GL Company Mapping
Go to Menu > Admin/manager > System setup > GL settings > GL company mapping.
Assuming you have your GL companies set up, the next step is to define the due to / due from accounts between each of the companies. You can only create an intercompany transaction between companies that have a mapping set up. Workamajig does not allow for intercompany transactions unless there is an explicit map set up. So, if you have a relationship set up from 'company A' to 'company B' and from 'company B' to 'company C', you cannot enter a transaction from 'company A' to 'company C'.
You create one row for each from/to relationship. The due to/from accounts can be the same for all 4 types. When the intercompany transaction is posted, we also store the source company as well as the target company on the transaction, so it is possible using a single due to/from account to still get detailed breakouts of transactions flowing from one company to another.
From source to target company: AP due to (current liability); AP due from (current asset); AR due to (current liability); AR due from (current asset); JE due to (current liability); JE due from (current asset).
- Current liability can be all the same GL account number and current asset can be the same GL account number.
- These should NOT be set to AR or AP account types or their aging vs. balance sheet won't tie.
Example of GL account setup
Must have matching asset & current liability accounts per company.
Asset example
Liability example
Example GL company mapping setup
Entering transactions
To perform an Intercompany Transaction, you must enter the 'source company' and a 'target company'. The 'source company' is the GL company in the header (top portion of the transaction). The 'target company' is the GL company on the line detail. If you customize the columns, you should find 'target company' as one of the columns.
Journal entries
When entering an Intercompany transaction on a journal entry, there is a drop-down box at the top for intercompany DT/DF source. This determines which due to/from accounts are used for the intercompany entry. The example image below shows moving cash from 'company A' to 'company B'.
Journal entry example
Vendor invoices
In vendor invoice entry, you can select orders for that vendor that exist in the same GL company the vendor invoice is in and any GL company with a mapping entry set up for the source GL company. When the order line is selected, the source GL company on the order will be added to the voucher detail line automatically.
NOTE: You CANNOT enter an Intercompany credit.
Vendor invoice example
Posting detail example
Entering a basic vendor invoice: $100 total, $60 to 'company B'.
| Account | Company | Debit | Credit |
| AP | A | 100 | |
| Expense | A | 40 | |
| Expense | B | 60 | |
| Due to (liability) | B | 60 | |
| Due from (asset) | A | 40 |
Vendor invoice with a prebill order accrual. The order was accrued for 100 and the order is in the same company and the whole line is assigned to 'company B'. If the order was accrued on an invoice for 'company B', then 'company B' is assigned to the line and is locked.
| Account | Company | Debit | Credit |
| AP | A | 100 | |
| Expense | B | 100 | |
| Due to | B | 100 | |
| Due from | A | 100 | |
| Accrued expense | B | 100 | |
| Accrued liability | B | 100 |
Same as above, except an extra prebilled order for 'company A' for $60
| Account | Company | Debit | Credit |
| AP | A | 160 | |
| Expense | B | 100 | |
| Expense | A | 60 | |
| Due to | B | 100 | |
| Due from | A | 100 | |
| Accrued expense | B | 100 | |
| Accrued liability | B | 100 | |
| Accrued expense | A | 60 | |
| Accrued liability | A | 60 |
Vendor invoice with taxes. The line with the taxes is assigned to 'company B'. Invoice $100, tax $10
| Account | Company | Debit | Credit |
| AP | A | 110 | |
| Expense | B | 100 | |
| Sales tax expense | B | 10 | |
| Due to | B | 110 | |
| Due from | A | 110 |
Vendor invoice with taxes. The line with the taxes is assigned to 'company B'. Invoice $100, tax $10
| Account | Company | Debit | Credit |
| AP | A | 110 | |
| Expense | B | 100 | |
| Sales tax expense | B | 10 | |
| Due to | B | 110 | |
| Due from | A | 110 |
Unapplied payment
| Account | Company | Debit | Credit |
| Cash | A | 100 | |
| Prepaid exp. | A | 100 |
After application to a voucher for another company
| Account | Company | Debit | Credit |
| AP | B | 100 | |
| Expenses | B | 200 | |
| Prepaid exp. | A | 100 | |
| Due from | A | 100 | |
| Due to | B | 100 |
Payment
Pay a vendor invoice for 'company B' for $100
| Account | Company | Debit | Credit |
| Cash | A | 100 | |
| AP | B | 100 | |
| Due to | B | 100 | |
| Due from | A | 100 |
Enter a payment direct to expenses for another company
| Account | Company | Debit | Credit |
| Cash | A | 100 | |
| Expenses | B | 100 | |
| Due to | B | 100 | |
| Due from | A | 100 |
Client invoices
NOTE: You CANNOT:
- Do an Intercompany advance bill
- Do an Intercompany credit
One of the situations that will happen is that a person from 'company A' will work on a project for 'company B'. When the invoice is posted, 'company A' should get the revenue for this work. We can drive this a couple of different ways and it will be the same question for the office. This would also only work if you are pulling transactions onto an invoice and posting using details. If you are posting using details, then there is a setting on the project which defaults from the system setup that says where to get the GL company for labor; either the project or the person. If it is the person, the system will use the default GL company for the employee and create due to/from entries for those transactions.
Normal invoice with one line going to a different company.
| Account | Company | Debit | Credit |
| AR | A | 100 | |
| Sales | B | 100 | |
| Due from | A | 100 | |
| Due to | B | 100 |
Normal invoice with one line going to a different company $ 100, $10 in tax.
| Account | Company | Debit | Credit |
| AR | A | 110 | |
| Sales | B | 100 | |
| Sales tax | B | 10 | |
| Due from | A | 110 | |
| Due to | B | 110 |
WIP posting
When posting WIP, if you select a GL company to post, the system will post all of the entries tied to projects with that GL company. There are two modes for the system to determine which company should be used for the GL company for the income portion of the WIP posting. There are project & user. In the case of the project, the WIP posting posts all income to the same GL company as the project, and there are no intercompany transactions. When the project is set to get the GL company from the user, the system will post the income portion of the WIP posting to companies based on the default GL company on the user.
If Project 123 is tied to 'company A', but Steve works for 'company B' and works $1,000 worth of labor on 'project A'. Jim works for 'company A' and works $2,000 of labor
| Account | Company | Debit | Credit |
| WIP asset | A | 3,000 | |
| WIP income | A | 2,000 | |
| WIP income | B | 1,000 | |
| Due from company A | B | 1,000 | |
| Due to company B | A | 1,000 |
When all of this time is later billed, the client invoice will post the following entries
| Account | Company | Debit | Credit |
| AR | A | 3,000 | |
| Income | A | 2,000 | |
| Income | B | 1,000 | |
| Due from company A | B | 1,000 | |
| Due to company B | A | 1,000 |
Finally, WIP is posted again and the entries are reversed.
| Account | Company | Debit | Credit |
| WIP asset | A | 3,000 | |
| WIP income | A | 2,000 | |
| WIP income | B | 1,000 | |
| Due from company A | B | 1,000 | |
| Due to company B | A | 1,000 |