Zikpro - Inter Company Journal Entry

You use an Inter Company Journal Entry to record a financial transaction between two or more firms that are part of the same group. For example: separate branches or legal entities controlled by the same parent company.

For example: Company A and Company B are both in your business group. You might use an Inter Company Journal Entry to note when Company A buys something for Company B, like inventory or an expense.

This entry lets you:

1. Clearly show how the money moved between the two businesses.

2. Make sure that both companies' accounting books are correct and in balance.

3. Make the debit in one firm and the credit in the other company automatically.

You can choose the specific accounts that are part of the transaction in ERPNext. For example, you can choose Company A's Bank Account and Company B's Payables/Receivables. This is really handy if you often move money around, share costs, or settle debts between companies.

Inter Company Journal Entries keep your group's bookkeeping tidy and make it easy to see all of your internal activities. You don't need to fill out extra paperwork or make complicated manual entries.

Inter company Journal Entries are created using the Journal Entry form in ERPNext. To access the Journal Entry list, go to:

## 1. Prerequisites Before creating an Inter Company Journal Entry, you need the following: 1. At least two companies ## 2. How to create an Inter Company Journal Entry 1. Go to the Journal Entry list, and click on New. 2. Select Entry Type as 'Inter Company Journal Entry'. 3. Set the Company that is buying Items on behalf of another company. 4. Add rows for the individual accounting entries. Only inter company accounts can be fetched here. 5. In each row, you must specify: - The Internal account that will be affected. - The amount to Debit or Credit. - The Cost Center (If it is an Income or Expense). 6. Submit the Journal Entry. Make sure the total Debit and Credit Amounts are same as the previously created Journal Entry's total Credit and Debit Amounts respectively but the debits and credits will be opposite.

3. Related Topics

• Journal Entry

• Inter Company Invoices

4. More to Follow

• Zikpro ERPnext Demo

• www.zikpro.com