Intercompany Billing

When multiple companies share labor or expense resources on the same project, use the automated Intercompany Billing process to account for this sharing. The Intercompany Billing process lets each company match costs with revenue and assess profitability.

You can share employee resources among companies while accounting for the labor and expense charges associated with the shared work effort:

• Labor Charges: An employee from one company can charge time to another company's project, phase, or task on his or her timesheet.

• Expense Charges: An employee from one company can charge travel, meals, and other expenses to another company's project on his or her expense report.

Generate Intercompany Invoices and Accounts Payable Vouchers

The Intercompany Billing process also creates intercompany accounts receivable and intercompany accounts payable entries on the general ledger, keeping each company's Balance Sheet in balance.

You can generate invoices and accounts payable vouchers related to intercompany transactions. These intercompany invoices and accounts payable vouchers do not affect the general ledger. They are designed to help you track intercompany transactions on accounts receivable reports and track intercompany accounts payable vouchers on accounts payable reports.

Note that using detailed subledgers requires additional setup steps.

Intercompany Suspense Account

When a transaction involves another company, some time will pass between the transaction posting date and the date that you run the Intercompany Billing process. To support the need to balance accounts during this time, you must create an intercompany suspense account as part of configuration.

Intercompany Organization

You must also specify an intercompany organization, so that Deltek knows how to handle implicit postings for intercompany transactions.

Process Intercompany Billing

Click Accounting > Intercompany Billing to display the Intercompany Billing form. This form displays only those posting logs that contain intercompany labor or expense entries. Use this form to complete the Intercompany Billing process.

Alternative to Intercompany Billing

Instead of using Intercompany Billing, you can use the work breakdown structure to divide a project into phases and tasks, then assign different pieces of the project to different companies. If you do this, employees enter charges to the project, phase, or task component that has been assigned to their company through the organization structure.

This approach holds each company tightly accountable for its portion of the contract. The project’s compensation can be explicitly divided among the companies and each company can establish a separate budget for its work.

However, this approach requires significant administration to set up and monitor additional phases or tasks. Contract amounts need to be negotiated between the companies. Each company controls which project components can receive intercompany charges from employees.