Intercompany Billing

This setting determines the specific timing for when CORE should initiate intercompany billing processes.

Labor

• Look for any approved time entries: CORE automatically generates a journal entry immediately after the status of a time entry is updated to Approved. This is the default setting, which is designed to ensure that billing processes begin without delay after time has been approved. By promptly creating journal entries upon approval, CORE facilitates a seamless and efficient transition from time tracking to billing, helping to maintain accurate financial records and timely invoicing.
• Look only for paid time entries: CORE can be set to search exclusively for paid time entries. When this setting is enabled, CORE posts the journal entry only after all the related time entries have been completely paid. This means that billing is postponed until payment has been fully verified, which offers a more cautious and conservative method for handling intercompany billing processes. By ensuring that entries are only recorded after payment confirmation, this approach helps to maintain accurate financial records and reduces the risk of billing discrepancies between companies.

Expense 

• Look for any approved expense entries: By default, CORE is set to automatically search for any expense entries that have been approved. This means that after an expense entry receives approval, CORE promptly initiates the creation of a corresponding journal entry. As a result, this setup facilitates timely and efficient intercompany billing processes, allowing companies to bill related entities based on expenses that have been approved. This streamlined approach helps maintain accurate financial records and supports smooth intercompany transactions.
• Look only for paid expense entries: CORE can be set to search exclusively for paid expense entries. This specific configuration ensures that the journal entry is created and posted only after all the expense entries have been completely paid. This approach helps to maintain clear and precise accounting practices by preventing the posting of journal entries related to unpaid expenses, thereby ensuring that financial reports reflect only settled transactions.

CORE allows you to apply a markup to intercompany transfers to account for overhead such as employee benefits and employer taxes.

For labor costs, the default multiplier is set to 1.0. However, you have the flexibility to increase this value to include overhead expenses. For example, you might choose a multiplier of 1.3 or 1.4 to account for the extra costs associated with employee benefits, taxes, and other related expenses. This adjustment ensures that the receiving entity is charged an amount that accurately reflects the true cost of labor.
When it comes to expenses, the multiplier typically remains at 1.0. This is because many expenses do not require an overhead adjustment, so the transferred amount generally stays the same as the original cost.

Example: Consider a scenario where the base cost is $100 and the labor multiplier is set to 1.3. In this case, the amount transferred between entities would be $130. This markup effectively covers the additional overhead costs, making the intercompany transfer more accurate and reflective of the actual expenses involved.

These accounts determine where CORE posts the intercompany journal entries.

• Intercompany Due To: This account is specifically used to document and track intercompany transactions that represent amounts owed to another entity within the same company. This account helps in maintaining accurate records of liabilities between different divisions or subsidiaries of the company, ensuring clear visibility of internal financial obligations.
• Intercompany Due From: This account serves the purpose of recording intercompany transactions that are receivable from another entity within the company. It captures the amounts that other branches or subsidiaries owe to the reporting entity, facilitating proper management and reconciliation of internal receivables within the corporate structure.
• Intercompany Billing Multiplier: This account is used to record the value associated with the intercompany billing multiplier applied during the creation of intercompany transactions. This multiplier adjusts the transaction amounts to reflect agreed-upon pricing or cost allocations between entities, and the account ensures these adjustments are properly accounted for in the financial records.