About inter-entity transactions and inter-entity bill back

Related information

Related topics

• Inter-entity bill back overview
• Overview of inter-entity transactions

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You 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.

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.

Use the affiliate entity dimension to auto-tag inter-entity bill back transactions

By enabling affiliate entity dimension tagging, you enrich and enhance inter-entity activity and balance information. You'll glean greater detail when you run dimension balance, General Ledger, and financial reports, achieve more granular eliminations, and more cleanly track your inter-entity activity.

You can use this information throughout your reporting, reconciliation, and consolidation processes. This helps ensure accurate elimination during consolidation.

Use the affiliate entity dimension with inter-entity bill back under the following conditions: 

• Accounting regulations require you to use Accounts Receivable bill back functionality instead of inter-entity transactions.

• You want to track and report on inter-entity transactions using the affiliate entity dimension.

Using the affiliate entity dimension to auto-tag inter-entity bill back transactions enables you to benefit from the following:

• Leverage automation: Auto-tagging invoice and bill entries with the affiliate entity dimension replaces a previously manual process.

• Improved reporting and consolidation: Experience improved downstream reporting, reconciliation, and elimination during consolidation.

• Improved efficiency: Reduce manual errors.

Example: Using the affiliate entity dimension to auto-tag inter-entity bill back transactions

Suppose that you need to create an inter-entity bill back transaction for a transaction between two entities in the same Intacct company. The vendor is entity E100, and the customer is entity E101. You can use the affiliate entity dimension to auto-tag the customer and vendor in the bill back invoice and the resulting bill.

You would create an inter-entity bill back invoice for the transaction and fill in the details as follows:

• Enter the relevant entities in the Location column for each line item, E100 for the vendor and E101 for the customer.
  The bill back template auto-populates the affiliate entity dimension as follows:

  • On the General Ledger (GL) entry for the customer invoice, Intacct auto-populates the affiliate entity with the entity that's tied to the customer, or E101.

  • On the GL entry for the vendor bill, Intacct auto-populates the affiliate entity with the entity that's tied to the vendor, or E100.

The resulting journal entry for the invoice looks like this:

In this journal entry, the affiliate entity dimension indicates that E101 is the customer entity for vendor entity E100.

The resulting journal entry for the bill looks like this:

In this journal entry, the affiliate entity dimension indicates that E100 is the vendor entity for customer entity E101.

Additional information

Refer to Inter-entity bill back overview for more information.