0

Accounting - Intercompany Consolidation

Hi everyone, 

I was wondering if anyone completes intercompany consolidation where both entities are using O-Beer. Currently we have our brewery on O-Beer however our distribution entity remains outside on a different reporting system. I wanted to see if anyone has brought their related party/intercompany (hopefully a distribution entity) and how the process was to get the entity onto O-Beer and how the current consolidation process is being run.

Also if you have any tricks/tips on anything we should take into consideration during implementation of bringing the intercompany books onto O-Beer that would be greatly appreciated. We are currently game planning and trying to identify any issues we may come across now. 

Thanks, 

Stephen

3 comments

  • 0
    Avatar
    Daniel Armstrong

    Hey Stephen,

    We don't have a distribution entity, but we do maintain a separate entity within OBeer so maybe some of our practices would be useful. 

    We primarily do this with using different ending segments on GL accounts to designate which entity. There are inter-company transactions that post to specific Inter-company Business Partners we set up with their own Inter-company control accounts. The inter-company control accounts (AP/AR) have a 95 or 90 segment code so that they are excluded when reporting consolidated or included with their respective -05 or -00 segment entities if reporting on them individually.  

    The complicated bit, where I'm curious how others do this: is the separate entity has it's own AP or AR too so that means we have separate business partners (designated as being other entity V5100 vs V1100) associated with the separate entity's AP/AR control accounts.

    Hope this helps a bit.

     

  • 0
    Avatar
    Barb Sessler

    Hi Daniel,

    We also have both of our locations on OBeer and distinguish between them using different ending segments.  While we have separate control accounts for AP/AR for each location/segment (00 and 03, for example) I'm intrigued by how you set up inter-company control accounts (95 or 90).  

    We have a good number of vendors for which both companies are billed on the same invoice (health insurance, for example).  So, how would you set up the control account for that particular vendor?  Any advice you have is greatly appreciated!

    Regarding your question about separate business partners, we do keep separate BPs for each entity, with the exception of the health insurance example above which I don't think we're doing correctly.  We didn't do a great job of setting up those separate BPs, but I think the easiest way is to have one set of vendors with the V1000 number and for the second entity, you could create a V5000 list or even change the BP number for the second entity to another letter (P1000 for Pub).  

    Thanks very much!  

    Barb

  • 0
    Avatar
    Daniel Armstrong

    Barb,

    The intercompany clearing segments have been very useful as the entities are separate enough that we need to know how much one owes the other. 

    We try to ask for separate billings to be for one entity or the other when possible which sounds like you do, but definitely have some like you where it's on one bill. Or say we're doing a goods issues, or an it's an expense on the credit card expense report import. Essentially we capture that with the Inter-company AP/AR account.

    Ex: 2 expenses on invoice to code to both entities. My books have to be balanced between entities as well as in the normal fashion - balance debit and credits in primary entity, and debits and credit in secondary entity:

    20002-95 and 11000-90 are not control accounts so it's a little easier to post directly to from JE if needed without maintaining inter company business partner also (we did that before, have now switched away from it)

    So now if reporting one entity by itself, then primary would included segment -00 and -90. Secondary would be -05 and -95. 

    -90 and -95 should always balance and cancel out, so can exclude those segments when reporting consolidated. Actually only have one account in each of these segments, as it's only a balance sheet item of being owed from secondary to primary entity. 

     

Please sign in to leave a comment.