Property Management Intercompany Accounting – Simplified

cash rec snip

Intercompany accounting can be confusing…..sometimes, it just helps to step back, get a basic concept of what the software does, and think through what really happens manually before digging into the setup of this functionality in the software. The following situation would be one of the most common.  Consider the tenant, who has multiple units in different properties with separate bank accounts, that sends you one check monthly.   Since you will be depositing this check to one bank account, you can use the system to generate the receivable for the entities that did not receive the deposit and the payable for the entity that you deposited the payment to.

The “basic” operation of this function is that it checks for differences in bank account setup in Cash Management and in Property Management. ]

Default cash accounts or bank accounts are setup in Cash Management under “Setup Bank Account” and in Property Management on the “controls tab” and on the “deposits tab”.  If the tenant that you entered the payment to resides in a property with a different GL prefix than that on the CM bank account, you can generate intercompany accounting entries.  All in all, this is your guarantee that your bank accounts and your General Ledger stay in balance. Now, armed with the basics, you are ready to setup. The basic operation of this function is that when you enter a payment in PM, it asks you for a deposit bank account.  You then continue in the Cash Receipts program to finish out the payment(s) to this bank account by entering the tenant ID.  When you save the payment, the system looks at the  GL prefixes and accounts located on the property record for that tenant.  If the prefix or entity on the property record does not match that setup on the bank account that you entered in Cash Management, it will automatically create intercompany accounting entries for you.

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