An Inter Company Journal Invoice is done between organizations that belong to the same group.

In addition to generating Purchase Invoices or Sales Invoices for individual companies, you can generate interconnected invoices for multiple companies.

For instance, you can produce a Purchase Invoice for one company, such as ‘Company ABC’, and then create a Sales Invoice corresponding to this Purchase Invoice for another company, such as ‘Company XYZ’, and establish a linkage between them.

1. How to create Inter Company Invoices

1.1 Setting up

Navigate to: Accounts > Masters > Customer.

Choose the Customer you wish to designate for the interlinked invoice.

Activate the checkbox labeled Is Internal Customer, as illustrated below:

1. Specify the company represented by the Customer in the Represents Company field. This indicates the company for which the Sales Invoice will be generated.
2. In the Allowed To Transact With table, include the company against which you intend to create a Purchase Invoice.
3. Subsequently, when you create a Purchase Invoice for company A (where the customer is from company B, and the seller is company A), it will be associated with the Sales Invoice for company A created using this Internal Customer from company B.
4. Next, follow a similar procedure for setting up a Supplier for interlinked invoices:
5. Navigate to: Accounts > Masters > Select the Supplier
6. Select the Is Internal Supplier checkbox.
7. In the Represents Company field, input the company added in the Allowed To Transact With table for the Customer.
8. In the Allowed To Transact With table for the Supplier, include the company represented by the Customer. This is the company against which you will generate an interlinked Purchase Invoice.

1.2 Creating the Invoice

• Now, proceed to create a new Sales Invoice and fill in the required fields. Ensure to select the Customer who is an internal customer and the company from which they are making the purchase.
• Save and submit the Invoice.
• Before generating an Inter Company Invoice, ensure the following steps are completed:

1. Ensure the selling and buying prices between the companies are synchronized.
2. Navigate to Stock > Price List and create a new Price List specifically for intercompany transactions.
3. Enable both Selling and Buying options in this new Price List.
4. In Buying > Supplier > internal supplier, configure the currency and price list settings to use the newly created Price List.
5. Repeat the same process for the internal customer by setting the price list to the new one.

• Now, you can proceed to create an intercompany Purchase or Sales Invoice.
• Under the Make button dropdown, locate and select “Inter Company Invoice.” Upon clicking, you will be directed to a new Purchase Invoice form page.
• Here, the supplier and company fields will be automatically populated based on the company you selected in the Sales Invoice. Remember, there can only be a single Internal Supplier or Customer per company.
• Submit the invoice, and you’re done! Now, both invoices are interlinked. Additionally, if either of the invoices is canceled, the link will be broken as well.

Note: An Inter Company invoice will solely impact the accounting ledger and not the stock ledger since the companies belong to the same group of companies.

You can replicate the same process to create a Purchase Invoice and subsequently an interlinked Sales Invoice from the submitted Purchase Invoice.

2. Related Topics

1. Sales Invoice
2. Purchase Invoice
3. Inter Company Journal Entry