Intercompany Sales: To Process an Intercompany Invoice

The following activity will walk you through the processing of intercompany invoice between branches of two companies within the same tenant.

Story

Suppose that the Head Office of the Muffins & Cakes company has to purchase juicer installation services from the Service and Equipment Sales Center of SweetLife Fruits & Jams. The system administrator has set up the intercompany sales functionality to generate AP bills based on AR invoices.

Acting as an accountant of SweetLife, you need to create an AR invoice with the MHEAD branch as a customer, and automatically generate an AP bill based on this invoice.

Configuration Overview

For the purposes of this activity, the following features have been enabled:

• Standard Financials
• Multibranch Support
• Multicompany Support
• Advanced Financials
• Inter-Branch Transactions

On the Non-Stock Items (IN202000) form, the INSTALL non-stock item has been configured.

On the Branches (CS102000) form, the following activities have been performed:

• The SWEETEQUIP (Service and Equipment Sales Center) branch of SweetLife has been defined and extended as a vendor.
• The MHEAD (Muffins Head Office & Wholesale Center) branch of Muffins & Cakes has been defined and extended as a customer.

For details, see Intercompany Sales: Implementation Activity.

Process Overview

In this activity, on the Invoices and Memos (AR301000) form, you will create an AR invoice, specifying MHEAD as the customer, and release the invoice. You will then cause the system to automatically create an AP bill based on the AR invoice by clicking Generate AP Document on the More menu. On the Bills and Adjustments (AP301000) form, you will review the settings of the created bill and release it.

System Preparation

To prepare the system, do the following:

1. Launch the MYOB Advanced website, and sign in to a company with the U100 dataset preloaded. You should sign in as Nenad Pasic by using the pasic username and the 123 password.
2. In the info area, in the upper-right corner of the top pane of the MYOB Advanced screen, make sure that the business date in your system is set to 1/30/2023. If a different date is displayed, click the Business Date menu button, and select 1/30/2023 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.
3. As a prerequisite activity, in the tenant with the U100 dataset, be sure you have extended the SWEETEQUIP branch as a vendor and the MHEAD branch as a customer, as described in Intercompany Sales: Implementation Activity.
4. On the Company and Branch Selection menu, on the top pane of the MYOB Advanced screen, select the Service and Equipment Sales Center branch.

Step 1: Processing an AR Invoice from the Selling Branch to the Purchasing Branch

To process an AR invoice from SWEETEQIP to MHEAD, do the following:

1. Open the Invoices and Memos (AR301000) form.
   Tip: To open the form for creating a new record, type the form ID in the Search box, and on the Search form, point at the form title and click New right of the title.
2. On the form toolbar, click Add New Record, and in the Summary area, specify the following settings:
   • Type: Invoice
   • Date: 1/30/2023 (inserted by default)
   • Customer: MHEAD

     This is the MHEAD branch of Muffins & Cakes that has been extended as a customer and to which SWEETEQUIP—the current branch, which has been extended as a vendor—provides services.

   • Location: MAIN (inserted by default)
   • Description: Installation services
3. On the Details tab, click Add Row on the table toolbar, and specify the following settings for the added row:
   • Branch: SWEETEQUIP (inserted by default)
   • Inventory ID: INSTALL
   • Quantity: 2.5
   • Ext. Price: 250 (inserted automatically)
   • Account: 43000 - Related Company Sales (inserted automatically)

     Because on the Accounts Receivable Preferences (AR101000) form, the Use Intercompany Sales Account From box is set to Customer Location, the system has inserted the sales account specified on the GL Accounts tab of the Customer Locations (AR303020) form for the MAIN location of the selected customer.

4. On the form toolbar, click Save.
5. On the form toolbar, click Remove Hold to give the invoice the Balanced status.
6. On the form toolbar, click Release to release the AR invoice.

Step 2: Automatically Creating an AP Bill Based on the AR Invoice

To create an AP bill based on the AR invoice from SWEETEQIP to MHEAD, do the following:

1. While you are still on the Invoices and Memos (AR301000) form with the invoice open, on the More menu (under Intercompany), click Generate AP Document. The system opens the Bills and Adjustments (AP301000) form with an automatically created AP bill.

   Notice that in the Vendor box of the Summary area, SWEETEQUIP is specified as the vendor.

2. On the Details tab, review the account specified in the Account column.

   Because on the Accounts Payable Preferences (AP101000) form, the Use Intercompany Expense Account From box is set to Vendor Location, the system has inserted the expense account specified on the GL Accounts tab of the Vendor Locations (AP303010) form for the MAIN location of the selected vendor.

3. Open the Financial tab. In the Related AR Document box (Intercompany Invoicing section), notice that the system has inserted an invoice number. This is the document you created in Step 1, based on which the AP bill has been created.
4. On the form toolbar, click Remove Hold.
5. On the form toolbar, click Release to release the AP bill.
6. On the Financial tab, click the Edit button to the right of the Related AR Document box (Intercompany Invoicing section), and review the invoice that opens on the Invoices and Memos form.
7. On the Financial tab, review the link to the AP bill that the system has inserted in the Related AP Document box (Intercompany Invoicing section), as shown in the following screenshot.