Creating bank accounts in a multi-entity shared company

In a multi-entity shared environment, the way that you set up bank accounts determines where they can be used. Can a bank account be used by any entity or location? Make it shared. Is the bank account restricted in use? You can control that too.

• Shared: By default, bank accounts that are created at the top level are shared by the top level and all entities.
• Shared with restrictions: For checking accounts and savings accounts only, you have the option of restricting to a subset of entities (or locations within entities) or to the top level only.
• Private: Checking, savings, and credit card accounts that are created at the entity level are private and can be used only by that entity.

Shared bank accounts

By default, bank accounts that are created at the top level are shared by all entities. This means that they appear in lists throughout all levels of a multi-entity company and can be used anywhere in transactions, including in payments made by particular entities.

• A transaction (invoice, bill, employee expense, etc.) created at top level can use all bank accounts (shared and entity private).
• Top level bank accounts can be used to pay bills or receive cash from top level or from any entity that can “see” the bank account.
• If a checking account is created at the top, it must be reconciled at the top level.

Best practice: Create bank accounts at the top level, then restrict visibility of checking and saving accounts to the appropriate entity or entities.

Restrict shared bank accounts by entity

You can restrict shared accounts so that they can be used by only certain entities or by only the top level. The ability to restrict bank accounts applies only to checking accounts and savings accounts.

Entity-owned (private) bank accounts

To make a bank account private, switch to the entity first and then create the bank account.

A bank account that is private to an entity can't be used in transactions for other entities. For example, if you create a checking account in an Arizona entity, the account can't be used in payments issued by a California entity.

What does "Not Owned" mean?

Shared bank accounts can be edited only at the top level of a company.

If you open the checking, savings, or credit card account list from within an entity, you can see shared accounts in the list. However, these accounts will be listed as "Not owned" by the entity and the edit option won't appear.

Example

Scenario: You have a multi-entity company in which you share one bank account across multiple entities to centralize the payment of payables.

Set up the shared bank account at the top level. Unless restricted, any entity can use the bank account to process payments and other transactions. Inter-entity transactions are created for applicable transactions. For example, Company A owns the bank account and makes a payment on behalf of Company B. An inter-entity transaction is created to record the due to and due from between the companies. Reconcile the account at the top level.