About the IC Module 

The Intercompany module allows for automated recharging of the shared cost or management fees from one entity to another. This is done by linking the IC Debtor and IC creditor accounts via an API connection. 

This new module can be accessed in the sidenav:

Key Features of the new IC Module

Here are the new and enhanced features of our latest IC Module release:

• Streamlined IC Connection Setup: Option to create debtor and creditor accounts at the time of creating an IC connection or beforehand. See Intercompany Setup for more details.
• Separate IC Listing Grid:  All Intercompany accounts (debtors and creditors) are now hidden in the main Customers and Suppliers listings and are placed in the intercompany listing. (To see the IC accounts within the Customers or Suppliers listing grids use the option to clear the default filter.) The IC listing grid lets you view real-time IC balances between linked IC debtor/creditor accounts to identify and resolve out-of-balances as they occur, not just month end. In the Group Consolidation entity, you can view and manage company IC balances for all subsidiaries. 
• Enhanced Transactions: The IC module allows for both automated and manual recording of Management Charges, Intercompany Trade (this should cancel on Consolidation), and Payment/Funds between entities in the group. The new IC Bank Transfer lets you record IC bank transactions in both entities simultaneously and set up posting rules to auto-post and auto-reconcile IC funds transfers. 
• Enhanced Reporting: IC accounts are separate from sales and purchase reports for more precise analysis. “IC Matrix Reconciliation Report” can drill-down to IC transaction level making it easier for multi-entity companies to complete their close. 

What User Permissions do I need?

To use the features outlined in this article, check that you have the following permissions if relevant to your role.  These can all be found in the Menu tab of the Maintain Menu Profiles screen. See Create & Manage Users for more details.

• Unprocessed Transactions: Users who do not have permissions to post invoices, credit notes or purchase debit/credit journals will be able to view but not post those transactions from the relevant screens. 
• Intercompany Account Listing: Have permission to view the listing grid.

See:

Intercompany Setup 

Introduction to Intercompany module (13.0) - AIQ Academy

Creating Intercompany Transactions (13.2) - AIQ Academy

Managing Intercompany Accounts (13.3) - AIQ Academy

From the IC screen you can initiate intercompany transactions from one entity to another, such as recharges and non-recharging activities, as well as view all transactions in different formats, and email statements. When a transaction is created in the originating entity, the system will automatically generate a corresponding transaction in the receiving entity.  

Creating IC Transactions in the Sending Entity

1. Go to Actions and select either Recharge or Non-recharge:
   • Recharge transaction goes to the linked company. The IC module has the following transaction type recharge options: Batch Invoice, Batch Credit Note, Credit Journal, Debit Journal, and Refund (Payment to the customer account).
   • Non-Recharge transactions are only created in the local entity and does not go to the linked company. The IC module has the following transaction type non-recharge options: Item Invoice, Item Credit Note, and Receipt & Allocate.
2. Selecting any transaction type will take you to the relevant transaction screen. A notification appears advising this will create IC transactions.  If you don’t see this message, review your intercompany setup. 
3. From the dropdown, select the IC Account Receivable.  Any defaults setup against the IC account will automatically pre-fill but can be changed. Complete all fields. For Batch Invoices, you can populate multiple lines to create multiple invoices to multiple intercompany accounts, or you can create one invoice with multiple lines to only one intercompany account.  
4. Once all fields are complete, click Post or Process to complete the transaction. A progress bar appears, indicating the number of IC charges sent to the receiving company.  
5. The IC listing grid will refresh, and the transaction value will update the account balance in the local entity.  However, the account on the connected entity will remain unbalanced until the transaction is accepted at that entity.  

Accepting Intercompany Transactions in the Receiving Entity

The IC icon displays the number of unprocessed IC transactions awaiting processing. In the event where multiple entities are consolidated, the consolidation manager will show which entities have unprocessed inter-company charges.

Note that the FX rate for foreign currency transactions will be taken from the currency rates table and will be as of the latest rate, not the rate as of the date of the transaction.

1. Go to Intercompany > Actions > Unprocessed Transactions or click on the IC icon. Intercompany charges received will be listed here for you to select and post.
   
2. Select the transactions you wish to accept, and update the editable fields as needed. You can override the default GL account, Dimension Tag, or tax code which are automatically pulled from the IC supplier account. 
   • The Type column displays the transaction type that will be created, i.e. Purchase Invoice (PI), Purchase Note (PN), Purchase Debit (PD) or Purchase Credit (PC). Refunds will be sent as the Type PC. Therefore, if some of the PCs were sent as a funds transfer and the incorrect bank account was pre-selected, only bank accounts will be available in the GL Account dropdown.
   • It is not currently possible to process a refund for an account that is not in the base currency. Either select a bank account in base currency or change the defaults for the IC Creditor by closing the unprocessed transactions screen and re-opening it to post the transaction. 
   • If you select a line from a multi-line transaction such as an invoice or a credit note, all other lines of the same transaction will be selected automatically based on having the same type, creditor account, Ext Ref, and Date. If you change an Ext Ref for one of the lines after selecting it, the system will then deselect it.
3.  When finished, click on Post Selected to accept the transactions and post them as a purchase batch invoice. The charge will disappear from the grid.
4. Refresh the IC listing grid to display the updated balance. The transaction will also display in the Purchase Batch Invoices grid. If you log back into the sending entity, both accounts should now balance.

Automating Payments and Fund Transfers

Achieve automation of payments and fund transfers by posting at bank reconciliation stage and setting a rule for future posting within each trading entity. See Automated Bank Reconciliation.

Intercompany Loans

To use intercompany loans, create multiple control accounts and link the relevant debtor and creditor accounts to them.

IC Listing Grid Functions

Use the IC listing grid to:

• View and manage Intercompany connections. Each line represents an IC connection (see section 2 above).
• View and manage your Intercompany account balances with linked entities (see section 3 above). 
• Generate queries and export them to Excel (see below).
• Use the Actions dropdown to view statements, transactions, and reports, and email statements.

Generating Queries

• The listing grid displays the date and time the balances were last updated. Click Refresh Grid to bring in any newer transactions. If necessary, click Clear to remove any filter selections.
• Select a Period from the dropdown in the listing header. This will display the account balances as of that date. This assists with IC and Trial Balances reconciliation. 

• In Select Filter, select a filter as needed.
• The left-hand side of the grid displays IC accounts of the company you are in, and the right displays the corresponding IC accounts of each connected company. Use the header search fields, dropdowns, and ascending/descending arrows to refine your selection for the following:
  • A/C Code (Local Company)/A/C Code (Connected Company): Click the code to view the company account details. The link will only work if you have access to this company.
  • A/C Type: IC Debtors are listed first, followed by IC Creditors. To see the list of only IC Debtors or Creditors use the grid filter for the A/C Type field. 
  • A/C Name
  • Currency
  • Balance: This displays the real-time balances. Click on the link to open the Transaction Details for the local company. The balances on the local and connected accounts should cancel each other out. 
• To create a copy of the report, click Export to Excel. 

Error Notices

The Notice icon lets you know immediately if there is an issue, such as an unbalanced account, mismatched currency, or if the IC debtor or IC creditor is created but not linked. From the listing grid, you can log into any connected entity and make any relevant updates to the related accounts. Hover over the icon to view an explanation. 

Note, the currency mismatch error can only apply to accounts that were set up using the legacy module. 

Eliminating IC Balances

Intercompany balances are eliminated by linking the Intercompany Control Accounts to the same GL Category and GL Subcategory in the Group Consolidation Entity. See the report “Consolidated Balance Sheet - Split by Subsidiary”. 

Elimination of IC Trade 

Elimination of intercompany trade can also be achieved by posting a journal in the Group Consolidation Entity at the end of each reporting period by going to GL > Journal Manager > GL Journal. 

See: 

Using Multi-Entity Consolidation 

Using the Report Manager 

Using General Ledger Journals 

Manual Bank Reconciliation 

Automated Bank Reconciliation 

Home Page

The Homepage contains two useful tiles to assist with monitoring your IC accounts:

• Unbalanced: Displays the number of unbalanced intercompany accounts. Click the number to view the detailed listing grid.
• Unprocessed: Displays the number of unprocessed intercompany transactions. Click the number to view the detailed listing grid.

Report Manager

See Reports Glossary for full details on all reports.

Go to Reports > Interco > Intercompany.

The Group Consolidation Entity contains the following reports:

• Intercompany Balance: This report provides a summary of intercompany balances for the Group, detailing transactions between subsidiaries. It includes creditor company codes, company codes, and converted amounts, highlighting intercompany sales and balances. This helps in tracking and reconciling intercompany transactions, ensuring accurate financial consolidation and reporting.
• Intercompany Matrix: This report provides a summary of intercompany subsidiary balances with option to drilldown to transaction level. It includes details on creditor company codes, company codes, and currency values, highlighting discrepancies and unlinked transactions. This helps in identifying and reconciling intercompany balances, ensuring accurate financial consolidation and reporting.
• Intercompany Profits: This report details intercompany transactions and profits for the Group, such as recurrent product purchases, employee expenses, intercompany clearing, and software licenses across different subsidiaries. It provides transaction details such as company codes, account names, transaction dates, and amounts. This helps in tracking intercompany profits, ensuring accurate financial consolidation, and identifying areas for financial optimization.