An intercompany journal is a specialized type of journal
A document that enables you to make corrections or adjustments to your existing accounting data. that allows you to transfer costs to other companies in your organization A deployment of the Salesforce/Certinia applications with a defined set of licensed users. Your organization (org) includes all of your data and applications, and is separate from all other orgs..
An intercompany journal in the source company Company that initiates an intercompany transaction. contains a combination of standard journal lines and intercompany lines. You cannot enter tax details on an intercompany line in this release.
When the journal is posted in the source company, an intercompany transfer Object used as a staging location for data used when transferring costs to other companies in the same organization. record is created from the intercompany lines. This record is then used to create a second journal in the destination company Company that receives the costs during an intercompany transaction..
This is a four-step process:
In the source company:
- Create an intercompany journal A specialized type of manual journal used to transfer costs to other companies in the same organization.. This is a normal manual journal with one or more journal lines of type "Intercompany".
- Post the intercompany journal. In addition to posting the normal transaction A record created when documents are posted to the general ledger. Transactions must balance (sum to zero) in home, dual, and document currency., this creates the appropriate intercompany transfer record.
In the destination company:
- Process selected intercompany transfers to generate corresponding journals. This step might happen automatically if the source company's intercompany definition is set up to auto-process.
- Post the intercompany journals to transfer the costs to the destination general ledger. This step might happen automatically if the destination company's intercompany definition is set up to auto-post. Note that one balancing GLA line is created for the sum of intercompany lines on each destination journal.
See the list of related topics for more information.
For journals, there is a custom setting that controls which date is inherited during intercompany transactions. See Intercompany Settings for more information.
If you amend an intercompany document after posting, the corresponding intercompany transfer is not modified.
The Handling of Dimensions
There are two places you can define analysis dimensions: on the account, and in the case of Intercompany transactions, on the intercompany definition.
If you enter default dimensions on the appropriate intercompany definition, they will be used as described here.
- When you create an intercompany journal in the source company, and default accounts receivable dimensions exist on the intercompany definition, then these dimensions are used when posting this journal. If they don't exist on the intercompany definition, no dimensions are used.
- When the destination journal is created, and default accounts payable dimensions exist on the intercompany definition, then these dimensions are used on the destination journal line.
- If the intercompany transfer has not been processed and you amend the dimensions on the intercompany line, then these are passed to the destination journal along with the general ledger account entered on that line. The source company transaction line will always take the dimensions from the intercompany definition.
- Any dimensions that you enter on any other line types are only used in that journal. They are not passed to the destination.
Example 1
Company 1 purchases goods on behalf of other companies in the group. In this case, they want to recharge postage and stationery costs to Company 2 and Company 3.
In the Source Company, Company 1
You create a manual journal using the Intercompany journal line type as follows:
| Line Type | GLA | Destination Company | Value | Dimension 1 | |
|---|---|---|---|---|---|
| Credit | General Ledger Account | Admin recharge | –1000 | Admin | |
| Debit | Intercompany | Stationery cost | Company 2 | 600 | Finance |
| Debit | Intercompany | Postage cost | Company 3 | 400 | Finance |
When you post this intercompany journal, the following transaction is created:
| GLA | Value | Dimension 1 | |
|---|---|---|---|
| Credit | Admin recharge | –1000 | Admin |
| Debit | Debtor: Company 2* | 600 | ** |
| Debit | Debtor: Company 3* | 400 | ** |
* The accounts receivable GLAs taken from the Company 1's intercompany definition Defines the intercompany control accounts to use when transferring costs between companies in the same organization. records.
** Any dimensions added to the Source Dimension fields on the corresponding intercompany definition.
In addition to this, the appropriate intercompany transfer records are automatically created at the same time. See What is an Intercompany Transfer? for more information.
In the Destination Company, Company 2
After selecting and processing the related intercompany transfer record, the following journal is generated in the destination company Company that receives the costs during an intercompany transaction..
| Line Type | GLA | Value | Dimension 1 | |
|---|---|---|---|---|
| Debit | General Ledger Account | Stationery cost | 600 | Finance |
| Credit | General Ledger Account | Creditor: Company 1* | –600 |
When you post this intercompany journal, the following transaction is created:
| GLA | Value | Dimension 1 | |
|---|---|---|---|
| Debit | Stationery cost | 600 | Finance |
| Credit | Creditor: Company 1* | –600 | ** |
* The accounts payable GLAs taken from the Company 2's intercompany definition.
** Any dimensions added to the Destination Dimension fields on the corresponding intercompany definition.
In the Destination Company, Company 3
After selecting and processing the related intercompany transfer record, the following intercompany journal is generated and saved:
| Line Type | GLA | Value | Dimension 1 | |
|---|---|---|---|---|
| Debit | General Ledger Account | Postage cost | 400 | Finance |
| Credit | General Ledger Account | Creditor: Company 1* | –400 |
When you post this intercompany journal, the following transaction is created:
| GLA | Value | Dimension 1 | |
|---|---|---|---|
| Debit | Postage cost | 400 | Finance |
| Credit | Creditor: Company 1* | –400 |
* The accounts payable GLAs taken from the Company 3's intercompany definition records.
Example 2
The following notes will help you understand what happens when you enter intercompany details on a journal line.
| Line Type | Item | GLA | Account Analysis |
|---|---|---|---|
| Intercompany | Company | Note 1 | Note 2 |
| Account - Customer | Account (Note 3) | Note 3 |
|
| Account - Vendor | Account (Note 3) | Note 3 |
|
Note 1:
The GLA that you enter on an intercompany line is used to create a GLA line for the destination company's journal. The opposite entry in that company is the intercompany control account derived from the related intercompany definition.
Note 2:
The Account Analysis field is optional. If you enter an account in this field, this value is passed to the destination company journal.
This is useful when you are passing on revenue or costs and the receiving company wants to analyze these values by customer or vendor. This is for analysis purposes in the destination company only. It will not create an account line in either company.
Note 3:
You can enter an account that represents a company, but this type of line will not generate an intercompany journal. When the journal is posted, the resulting transaction will contain an account line for that account in your current company.
If you want the transaction to be reflected in the other company, you must post a separate journal in that company. In both journals you must enter the appropriate GLA for the account line, as this will not be retrieved from the intercompany definition when the journals are posted.