Inter-Branch Charges

Companies with multiple branches can set up an Inter-Branch Loan account to handle transactions between branches. This account allows a company to have one account for all Supplier payments and/or all Customer receipts.

Example

A company with a Melbourne (MEL) branch and a Sydney (SYD) branch may use a MEL account to pay an SYD invoice. The system will create a debit entry against the loan account for the SYD branch and a credit entry for the MEL branch.

As a result, payment of an invoice will involve four steps instead of two. Without an Inter-Branch Loan account, an invoice is received by a branch and a payment is made.

Using an Inter-Branch Loan account involves the following 4 steps: 

• The SYD branch receives an invoice

• The invoice is paid by the MEL branch

• The payment amount is debited against the SYD branch

• The payment amount is credited to the MEL branch.

How to Set Up Inter-Branch Charges

1. Navigate to Administration > System Setup > System Parameters.

2. If payments are to be made between branches, navigate to the Suppliers tab and set the Create Payments Inter-Branch Adjustments parameter to Y.

3. If receipts are to be generated between branches, navigate to the Customer’s tab and set the Create Receipting Inter-Branch Adjustments parameter to Y.

4. Click Save and then Exit.

How to Set Up an Inter-Branch Loan Account

1. Navigate to General Ledger > Setup in the main menu.

2. Click Add.

3. Set the Type to Liabilities.

4. Set the Class to Posting.

5. Set the Name to Inter-Branch Loan Account.

6. Set the Linked account to Inter-Branch Loan.

7. Click Save.

Inter-Branch Invoicing

Moveware allows for automated creation of a purchase invoice in the system when it recognizes a branch within the system has issued an invoice to another branch in the system. In otherwords, this functionality eliminates the need for duiplicate data entry when creating an interbranch Invoice and purchase, by enabling automation on the purchase side.

Enabling this function is based on 4 things:

• Intercompany Flag.

This requires setting up system parameters UseIntercompanyInvoicing = Y and IntercompanyTypes = “Intercompany” (as an example). This could be set to “Internal” or anything the user chooses. Whatever is selected has to be setup then as a customer type in system parameters. We use the customer type to determine if the customer can create an internal invoice. 

• Debtor-Creditor Link

Each branch is linked to an agent of self. This agent is then linked to a debtor, which must in turn be linked to a creditor. This is so we can reverse roles essentially and if Branch A creates an invoice for Branch B, when branch B creates the automated purchase, then it knows who the creditor is.

• Creditor-Removal Product Link

Every removal product that is used on an interbranch invoice has to be linked to a creditor product, so the system knows what charge lines to create when creating the purchase invoice.  

• Enabling intercompany purchase auto creation.

This is controlled by the Sys Param IntercompanyCreatePurchase = Y