How do intercompany deferred income invoices work in iplicit?

This article covers how intercompany deferred income works in iplicit and how to correct postings if they have not been generated as expected. When a sales invoice includes a deferred income line and involves intercompany, iplicit generates multi-company journals to ensure the deferred income is recorded correctly across the relevant legal entities.

Required setup for intercompany deferred income

Before intercompany deferred income journals will generate correctly, the following must be in place in addition to the standard deferred income setup.

Multi-Co Sale document type

Navigate to Document Types and confirm the 'Multi-Co Sale' document type is unlocked and has a document series assigned. Without this, iplicit cannot generate the multi-company journal when the sales invoice is posted.

Multi-Co Sale automation

Navigate to Automations and confirm the 'Multi-Co Sale' automation exists with the following configuration:

• Automation type: Multi-Co Sale
• From doc type: Sale invoice Standard, Sale Receipt Invoice (SRI), and any other sales invoice document types you use
• To doc type: Multi-Co Sale
• Trigger: Automatic upon posting

Account Defaults

Navigate to Account Defaults and select the 'Interco' sub group. Confirm 'Multi-Co sale' is mapped to your intercompany balances account - for example account 33020: Intercompany Balances.

Expected posting behaviour for intercompany deferred income

When a sales invoice with a deferred income line is posted across legal entities, iplicit generates the following postings:

At the time of posting the sales invoice:

• Entity A: Debit the Deferred Income account
• Entity B: Credit the Intercompany account

Reverse journal automatically created:

• Entity A: Debit the Intercompany account
• Entity B: Credit the Deferred Income account

Future deferred income release allocations:

• Entity B: Debit the Deferred Income account
• Credit the relevant income account within the correct entity

This ensures deferred income is recognised in the correct legal entity and that the intercompany accounts remain balanced throughout the release schedule.

Why incorrect postings may occur

If the expected intercompany postings do not appear, this is typically caused by one of the following:

• Incorrect or incomplete intercompany configuration at the time of posting
• The Multi-Co Sale automation not being in place or not including the correct document types
• The Multi-Co Sale document type being locked or missing a document series
• Changes made to intercompany settings after the invoice was originally posted
• Missing or incorrect mappings in Account Defaults

If the configuration was not correct when the invoice was posted, iplicit may not generate the required multi-company journals. The resolution is to correct the configuration and reverse and re-post the invoice.

How to correct incorrect intercompany deferred income postings

1. Unallocate the receipt - unallocate any receipts applied to the invoice
2. Reverse the invoice - reverse the original invoice into the current period. This also reverses all associated multi-company and deferred income journals, with each reversal posting into the corresponding period of the original transactions
3. Copy and re-post the invoice - use the 'Copy' function to recreate the invoice and re-post it into the same financial period as the original. This generates the correct intercompany postings based on the current configuration
4. Re-allocate the receipt - re-allocate the original receipt to the newly posted invoice

This process ensures no outstanding balance remains on the aged debtors report, the General Ledger impact nets to zero, and the corrected invoice reflects the correct intercompany deferred income behaviour.

Important

Correct intercompany deferred income behaviour relies on accurate configuration at the time of posting. If you are setting up intercompany deferred income for the first time, ensure all of the above is in place before posting any sales invoices with deferred income lines.

See: How to set up prepayments and deferred income in iplicit.