Question About Inter Company Journal Entries

From V11 I see the introduction of a much needed feature, theability to pass inter company journal entries.

I have read up and practiced how to use this feature and I seem to be missing something.

For me to be able to pass intercompany journal entries I must use the inter company entry option when creating the Journal —no problem here

When I choose the intercompany journal entry option, I can only choose accounts that have been created specifically for intercompany purpose, you do this by ticking the “inter company account” box when creating the account…still no problem here

However, and this is where the problem occurs, at least for me…you cannot use an account that has been ear marked as inter company when creating normal journals. This is a catch 22. let me try and explain.

We normally raise intercompany entries when Company A incurs a financial obligations on behalf of Company B and they are both part of the same group of companies.

For exampleif Company A spends $1000 cash on rent on behalf of Company B the ideal posting should be

In Company A Books
Cr Cash
Dr Intercompany Account (Company B)

In Company B Books
Cr Intercompany Account (Company A)
Dr Rent

Unfortunately in ERPNext as structured I will not be able to pass the above transactions because Cash and Rent cannot be created as intercompany accounts (the two accounts are used by the two companies internally). And if they are not created as intercompany accounts they will not show up when I want to pass intercompany journal entries.

And if I create them as intercompany accounts, they will not be available to be used when posting normal transactions within the two companies.

Catch 22.

Am I missing anything here ? looking forward to someone explaining this to me.


1 Like

@olamide_shodunke I am thinking this a big flaw to the inter company journal .I have personally tried all means and read all documentations to no avail.I am thinking during the design real life situations were not considered.But as a work around can you create a inter company purchase invoice with pos enable so that the payment can be made for the Rent which at submission you can raise the intercompany sales invoice for it to transfer it to the second company.
Great Team ,kindly come to our rescue on this by making all accounts selectable when using Inter company Journal.

Is your request or similar posted on Issues · frappe/erpnext · GitHub

The idea is to collect together user experience reports. That would focus and form a central working specification to promote common interest?

Hi, this problems still happen at version v11.1.53 . The COA for Inter Company can not show at standard Journal Entry, but actually we still can force to type or copy-paste manually COA name at Journal Entry form, then make sure Debit vs Credit are balance. Then submit the Journal Entry.

Hope this information can give more insign about Inter Company Journal Entry.

Pushed a fix fix: Removed inter-company account filter for inter-company journal entry by nabinhait · Pull Request #19308 · frappe/erpnext · GitHub