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Prerequisites
  • Multiple companies must be set up in your system.
  • Each company should have its own chart of accounts and default accounts.
  • A default inter-company account must be defined for tracking receivables/payables between entities.
What it does:Allows accurate and synchronized tracking of transactions between two internal companies—ensuring that the corresponding entries are reflected in both entities’ ledgers.Why it matters:
  • Maintains transparency between internal business units.
  • Prevents discrepancies in consolidated financial reports.
  • Reduces manual errors and improves audit readiness.

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1.0 Define Inter-Company Relationships

  1. Go to Accounts > Company.
  2. Open the first company’s profile.
  3. Scroll down to Inter Company Settings.
  4. Add the related internal company name.
  5. Define default receivable and payable accounts for inter-company interactions.
  6. Click Save.

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2.0 Create a Sales or Purchase Invoice

Create Sales Invoice (Company A → Company B):
  1. Go to Accounts > Sales Invoice and click New.
  2. Under Customer, select Company B.
  3. Add products/services as needed.
  4. Set the Company as Company A.
  5. Check Is Inter Company Transaction box.
  6. Select the receiving company (Company B).
  7. Click Save and Submit.
A corresponding Purchase Invoice will be auto-created under Company B.
Create Purchase Invoice (Company B → Company A):
  1. Go to Accounts > Purchase Invoice.
  2. Select Company A as the Supplier.
  3. Set the Company as Company B.
  4. Enable Is Inter Company Transaction.
  5. Select Company A.
  6. Fill the item and account details.
  7. Click Save and Submit.
This auto-generates a Sales Invoice under Company A.

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3.0 Record Inter-Company Payments

  1. Go to Accounts > Payment Entry.
  2. Choose Payment Type as Receive (or Pay).
  3. Set the Party Type as Customer/Supplier.
  4. Choose the internal company involved.
  5. Link the appropriate invoice.
  6. Save and Submit.
Match the payment with inter-company receivables/payables to keep balances clean.