Mastering Inter-Company Journal Entries in Empress

Guides & Tutorials
1

Introduction

An Inter-Company Journal Entry is a handy tool in Empress that lets you record transactions between two or more companies that are part of the same group. This feature is useful when one company performs transactions on behalf of another, for instance, purchasing goods or services.

To use this feature, you’ll need to access the Journal Entry form, which can be found by following this path on your Empress home screen:

Home > Accounting > Company and Accounts > Journal Entry

What You Need to Get Started

Before you can create an Inter-Company Journal Entry, you’ll need to have:

  • Two or more companies set up in your Empress account.

Step-by-Step: Creating an Inter-Company Journal Entry

Creating an Inter-Company Journal Entry in Empress is simple. Here’s how you do it:

  1. Go to the Journal Entry list and click on New.
  2. Set the Entry Type to ‘Inter-Company Journal Entry’.
  3. Choose the Company that is making the transaction on behalf of another company.
  4. Add a row for each individual accounting entry. Remember, you can only select inter-company accounts here.
  5. For each row, specify:
  • The internal account affected by the transaction.
  • The amount to debit or credit.
  • The cost center (if this is income or an expense).
  1. Submit the Journal Entry. You’ll see a button on the top right corner labeled Make Inter-Company Journal Entry.
  2. Click the button. You’ll be asked to select the company against which you want to create the linked Journal Entry.
  3. After selecting the Company, you’ll be directed to a new Journal Entry. The relevant fields, such as Company, Voucher Type, Inter-Company Journal Entry Reference, will be pre-filled.
  4. Select the internal accounts for the second company in the table.
  5. Submit the Journal Entry.
  6. Make sure the total Debit and Credit Amounts match those of the first Journal Entry, but with debits and credits reversed.

Note: The accounts in the second Journal Entry should mirror those in the first Journal Entry, but with debits and credits swapped.

For example, if Company A buys an item from Company B, the payment cycle using Inter-Company Journal Entry would look like this:

  1. Debit Bank Account by $500 and credit Debtors account of Company B by $500.
  2. In the Inter-Company Journal Entry, debit Creditors account of Company A by $500 and credit Bank Account by $500.
  3. The parties for Creditors and Debtors account should be selected before proceeding with the Journal Entry.

You’ll find a reference link at the bottom of both linked Journal Entries. This link will be removed if either of the Journal Entries are cancelled.

In conclusion, the Inter-Company Journal Entry feature in Empress is a powerful tool that simplifies transactions between affiliated companies. By following this guide, you’ll be able to create and manage these entries with ease, streamlining your business processes.