How Does Qvinci Handle Eliminating Transactions or Intercompany Receivables?

Overview

❗ NOTE: Qvinci does not directly handle eliminating transactions for intercompany receivables.

Our system shows accounts when there is activity in them. However, there are two workaround options that can be utilized to account for handling intercompany receivables/eliminating transactions:

Option 1: (Preferred)

The user may set up a separate accounting file to eliminate transactions, ensuring they do not impact the P&L when the file is individually reported. These transactions are only taken into account when all accounting files are consolidated together.

Qvinci's suggestion of utilizing a separate accounting file as the elimination file is solely so that the transactions do not affect the financials of the individual file. It is the recommended method of eliminating transactions, but the user could opt for either method.

Option 2:

The user may set up the Chart of Accounts inside each accounting file to account for eliminating transactions.

Setting Up the Accounts

Under either method, the user would set up the Chart of Accounts to reflect the intercompany accounts.

Step 1. Under Other Current Assets, the user sets up the below accounts: (example)

Loan from Company 1 to Company 2

Loan from Company 2 to Company 1

Loan from Company 2 to Company 3

Loan from Company 3 to Company 2

Loan from Company 1 to Company 3

Loan from Company 3 to Company 1

Step 2. Then, under Other Current Liability, the user would replicate the same Chart of Accounts:

Loan from Company 1 to Company 2 

Loan from Company 2 to Company 1

Loan from Company 2 to Company 3 

Loan from Company 3 to Company 2

Loan from Company 1 to Company 3

Loan from Company 3 to Company 1

Once the Chart of Accounts is created, the user would enter the loan under an account in the Assets category and then receive the loan to the same account under the Liabilities category.