Good afternoon,
I’m seeking an IFS solution for a recurring issue that my company sees - out of balance intercompany accounts after consolidation. We have many legal entites in the group, many of these trade with one another (one may purchase goods on behalf of another, or may pay salaries for employees that are seconded to projects completed by other entities etc).
When accounting entries are posted, to move costs from one entity to another, this is done via two journal entries (or one, if combined into one upload)
E.g. Company A incurred expenses that should be borne by Company B
Company A:
Cr Expense ($100)
Dr Intercompany AR/AP $100 - with counterparty B
Company B:
Dr Expense $100
Cr Intercompany AR/AP ($100) - with counterparty A
Often, we see manual entry errors like the following:
Company A:
Cr Expense ($100)
Dr Intercompany AR/AP $100 - with counterparty B
Company B:
Dr Expense $100
Cr Intercompany AR/AP ($100) - with counterparty C
The counterparty “C” was entered in error, and should have been “A”
IFS accepts the journals when posted, even when they are booked to the wrong intercompany trading partners. It doesn't seem to recognise that the journal entries booked result in an intercompany out-of-balance situation.
So, to my questions:
- Is there a way for IFS to validate journal entries, and block journal uploads that have intercompany matching errors?
- Or can IFS prepopulate/auto generate the intercompany entries, based on defined relationships in the system, and based on where the costs are going to/from? E.g.
- Cr Expense in Company A
- Dr Expense in Company B
- IFS auto-generates the Intercompany DR in Company A ledger, and the equal and offsetting Intercompany CR in Company B’s ledger?
Many thanks in advance,
Chris
