How do I allocate a payment to an invoice when there is also an intercompany journal to clear?

Pam11

A payment was made to Intercompany B for an invoice in Intercompany A.

 

The payment was allocated to Intercompany A Loan account.

A journal was then created in Intercompany A to offset Intercompany B Loan Account and Income Account

The actual funds are transfered between accounts.

 

The month prior an invoice was raised in Intercompany A to the same Income Account.

 

This has duplicated the income in Intercompany A.

 

Spend money was offset to Intercompany B Loan Account.

How do I receive the money to clear the Loan account and also the invoice?

Earl_HD

Hi @Pam11,

Thank you so much for your detailed post and my welcome to the Community Forum!

I appreciate your patience, and I apologize for the delayed response. In addressing this issue, it's advisable to consult with your Accountant for a tailored solution. If you'd like to explore some initial steps, consider the following:
 

Reversal of the Journal Entry:

• Identify and reverse the journal entry in Intercompany A that offset Intercompany B Loan Account and Income Account.

Adjustment of Invoice in Intercompany A:

• In Intercompany A, make adjustments to the invoice generated in the previous month to align with the correct Income Account. This may involve voiding or amending the invoice to rectify the duplication.

Correct Application of Payment:

• Reapply the payment made to Intercompany B for the invoice in Intercompany A, ensuring accurate allocation to the relevant accounts, such as clearing the Intercompany A Loan Account.

For a more tailored resolution, your Accountant will be able to provide specific guidance based on your unique circumstances.

Regards,
Earl