Inter-entity transactions and inter-entity bill back
Related topicsYou can use inter-entity bill back when one entity in your company provides goods or services to another entity. You generate an invoice, and Intacct automatically generates the corresponding bill. In this sense, inter-entity bill back is another form of inter-entity transaction and relies on inter-entity account mapping.
Instead of using the Accounts Receivable and Accounts Payable offset GL account, Intacct uses the mapped inter-entity receivable and payable accounts on the GL journal entries for the invoice and the automatically generated bill.
For more information about inter-entity bill back, see Inter-entity bill back overview.
For more information about inter-entity transactions, see Overview of inter-entity transactions.
Main steps of inter-entity bill back
The inter-entity bill back process is like paying any other vendor, except the vendor is an entity in your company. In the following example, the headquarters of an electric company provides electricity to the Eugene office of the company.
The electric company headquarters is Entity A, the vendor. The Eugene office is Entity B, the customer.
The main steps are shown in order with the direction for each action, from Entity A to Entity B or from Entity B to Entity A.
| Vendor steps: Entity A Electric Company HQ | Direction | Customer steps: Entity B Electric Company, Eugene office |
|---|---|---|
| 1. Provides service: electricity. |
|
1. Receives service: electricity. |
| 2. AR clerk creates an invoice for service: customer is Entity B, and line location is Entity A. |
|
2. Invoice auto-generates bill for Entity B. |
| 3. Receives payment from Entity A, the customer. |
|
3. Pays auto-generated bill to Entity A, the vendor. |
Read on for a more specific example of inter-entity bill back.
Example: paying for services where the bill back entity is the customer
Suppose the UK entity of a company hires the US entity of the company to provide training services. The UK entity needs to pay the US entity for training services. In this scenario, the US entity provides an invoice to the UK entity, where the UK entity is the customer. While the US entity produces an invoice for the UK entity, the bill-back process automatically generates the bill for the UK entity. The UK entity pays the bill.
If you choose to settle the transactions, the settlement would follow the typical flow:
- The bill payment clears the payable side, using the mapped inter-entity payable account.
- The invoice receipt clears the receivable side, using the mapped inter-entity receivable account.
Any unsettled inter-entity balances at the end of the period must be eliminated when consolidating.
Additional information
Refer to Inter-entity bill back overview for more information.
