Overview

Intercompany sales allows multi-company organisations trade between one WinMan system and another.

Setup

Tick “Enable Intercompany Accounts” in the Accounts settings.
This needs to be enabled in each system that it will be used in.

There is also an optional “Disable Purchase Order Item Modify For Firm Intercompany Purchase Order” Accounts setting that when enabled will disable the modify action of purchase order items that are on an intercompany purchase order.

Adding Relations

In the Systems And Sites module, select the system (e.g. UK) in which you want to create intercompany relations.

For each intercompany relation you want to add:

• Go to the Intercompany Accounts tab
• click on the Add action
• Add a Source Account. This is the supplier in the selected system (e.g. SA-00001).
• Add a Destination System and Account. This will be the customer in the chosen destination system (e.g. South Africa / UK-00001).
• Set a number of working days to transport.

Process

When a purchase order is firmed for a supplier (e.g. SA-00001) that is an intercompany relation then we process the record as follows:

Notes

When placing the initial purchase order, if the product does not exist in the destination system, as a sellable item, an error message will be displayed, and the user will not be able to continue. 

When creating a sales order as firm this may trigger other actions. Below is a list of possible actions and how they are handled for intercompany accounts:

Action	Process to be followed
Back-to-Back manufacturing or purchase order	Create the related orders in the target system using the same rules as if the process had been run manually.
Credit checking	Sales orders created through the inter-company process will not be credit checked.
Approvals	Sales orders created through the inter-company process will not be approved and automatically continue.
Proforma sales order	This will be manged in the same way as the standard item.
Kit Items	This will happen as standard, but when the kitted items are shipped the goods receipt on the first system will receive the single line.

Consolidated Financial Reporting

Overview

When companies grow into multiple legal entities, transactions between those entities become inevitable. However, when preparing consolidated financial statements, these intercompany balances can distort the group’s true financial picture. This feature introduces Intercompany Eliminations into the ERP system to ensure that consolidated reporting is accurate, GAAP/IFRS-compliant, and reflects only transactions with external parties. 

Without these eliminations, the consolidated financial statements would: 

• Double-count revenues and expenses arising from internal trading 

• Inflate assets or liabilities by retaining balances that cancel within the group 

• Misrepresent the group’s overall financial performance and position 

Example: Company A sells goods worth $100,000 to Company B within the same group. If not eliminated, consolidated group revenue appears $100,000 higher than the actual revenue earned from external customers. 

GL Elimination Tracking

Elimination data is kept in a new gl_elimination table.

• Posting a Sales Invoice to an intercompany customer automatically generates equal and opposite elimination entries in gl_elimination. 
• Posting a Purchase Invoice from an intercompany supplier automatically generates equal and opposite elimination entries in gl_elimination. 
• Housekeeping now has a new process for automated period-end elimination entry creation from elimination related inventory batches.

Consolidated Reports

The Balance Sheet, Trial Balance and Profit and loss reports have a new “Elimination” version that reports in the standard currency and incorporates elimination entries. This allows multi system filtering.