How can I move a balance from one legal entity to another?

This article covers moving a balance from one legal entity to another using an Interco journal in iplicit. Once submitted, iplicit automatically generates a second manual journal on the receiving legal entity to complete the transfer.

Checking the chart of account setup before you start

Before creating the journal, confirm you have a General Ledger code set up for intercompany movements:

1. Open 'Chart of accounts' and find the account used for intercompany movements, for example '33020: Intercompany Balances'
2. Confirm 'Interco' is ticked on its 'Usage' tab
3. Open the chart of account rule attached to that account and confirm the 'InterCo' attribute is listed with 'Req' ticked.

Creating the Interco journal

1. Open 'Manual journals' and select 'Create new manual journal'
2. Set the 'Doc type' to 'Interco journal'.

Setting the legal entity and contact account

1. In the 'Legal entity' field, select the entity the money is currently in, for example 'Big Bad Publishing Limited'
2. In the 'Contact account' field, select the entity the money is going to, for example 'Big Bad Publishing America'.

Entering the journal lines

1. On the first line, select the General Ledger code you're moving the balance from, for example '10010: Software Cost', and enter it as a credit
2. On the second line, select the intercompany account you checked earlier, for example '33020: Intercompany Balances', and enter the same value as a debit
3. On the second line, populate the 'InterCo' field with the legal entity the money is going to, for example 'Big Bad Publishing America'
4. Select 'Submit'.

The automatically generated journal

On submitting, iplicit automatically creates a second manual journal on the receiving legal entity. This journal debits the same General Ledger code, and credits Intercompany Balances with the InterCo field tagged back to the original entity. If the receiving entity uses a different base currency, the values convert automatically, so the amount shown won't match the original journal exactly.