The system supports the concept of "Due To" and "Due From" accounts to handle the complex multi-entity orders and payments. Such accounts are established in the GL Accounts service but the linking occurs on the Inter-Company GL Accounts tab of each multi-entity Organizations record. The "Due To" account represents the liability account within the organization's chart of accounts. The "Due From" account represents the asset account.
Using the Associated Parent and Associated Child organizations as an example of related organizations, the Associated Parent must contain "Due To Associated Child" and "Due From Associated Child" accounts on the Inter-Company GL Accounts tab of the Associated Parent record. The Associated Child must contain "Due To Associated Parent" and "Due From Associated Parent" accounts on the Inter-Company GL Accounts tab of the Associated Child record.
Follow these steps to add a new inter-company GL account record to an organization:
- Open a new record from the Inter-Company GL Accounts tab of the Organizations record.
- In the Related Organization field, enter the name of the organization with whom this organization must adjust payments.
- In the Due To GL Account field, enter the liability account this organization uses to recognize balances to the other organization.
- In the Due From GL Account field, enter the asset account this organization uses to receive balances from the other organization. Inter-Company GL Accounts Record
- Click OK to save the record.