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How to Use Inter-Entity Transactions in Sage Intacct


Inter-entity transactions (IETs) frequently occur within multi-entity companies, wherein one entity engages in transactions with another within the same company. To facilitate such transactions, establishing inter-entity account mapping relationships can be done through the Inter-entity account mapping page (Company > Setup > Configuration > Inter-entity account settings > Inter-entity account mapping).

In a multi-entity shared company, each entity represents a distinct tax identification or a separate set of books. These entities typically denote divisions, franchises, affiliates, associations, locations, chapters, self-balancing funds, or subsidiaries, all sharing a common chart of accounts.

Inter-entity transactions are tracked apart from regular receivable and payable transactions. For instance, when one entity compensates another entity for a service, it constitutes an inter-entity transaction. Users can stipulate the payable and receivable accounts designated for inter-entity transactions for each defined entity.

Central to managing inter-entity transactions is the setup of inter-entity transaction (IET) accounts across all entities and their interrelationships (inter-entity mapping). This configuration is facilitated through a centralized page where administrators can establish the relationships between entities and define the inter-entity accounts to be used among them. The chosen inter-entity account mapping plan dictates the methodology for mapping entities and delineating the inter-entity accounts to be employed.

Inter-Entity Mapping Plan Overview

The basic plan uses a single set of inter-entity accounts per entity, providing a streamlined approach for overarching tracking, while the advanced plan offers a more detailed strategy by allowing the definition of distinct sets of inter-entity accounts for each entity relationship or entity pair.

In the Advanced plan, separating inter-entity receivable (IER) and inter-entity payable (IEP) accounts among entity pairs allows for a more nuanced understanding of the origin of these obligations. This granularity enables specific reporting on the nature of these obligations and how they accrue.

It's essential to note that opting for the advanced plan doesn't mandate the creation of four accounts for each entity pair. Accounts can be reused based on differing granularity requirements among entities. For instance, you may configure a single IEP and IER account for your UK and US entities while employing four distinct accounts for entities in Australia and France.

INter-entity mapping Basic Plan

With the Basic Inter-Entity Account Mapping Plan, each entity is mapped to a common receivable account and payable account for posting inter-entity transactions (IETs). This approach simplifies tracking as it uses one inter-entity receivable (IER) and one inter-entity payable (IEP) account per entity. Since there's no requirement to individually settle balances among involved entities, these accounts can be shared across multiple entities or directly settled through cash or investments when necessary.

Entity IER IEP
E100 - Entity A 19100 - E100 Inter-Entity Receivable 29100 - E100 Inter-Entity Payable
E200 - Entity B 19200 - E200 Inter-Entity Receivable 29200 -  E200 Inter-Entity Payable
E300 - Entity C 19300 - E300 Inter-Entity Receivable 29300 - E300 Inter-Entity Payable


Basic Plan Scenario

In this scenario, Entity A has a posted AP Bill.

GL Debit (DR) Credit (CR)
53000 - COGS XXXX  
20000 - Accounts Payable   XXXX


Then, Entity B pays this bill for Entity A.

GL Debit (DR) Credit (CR)
20000 - Accounts Payable XXXX  
12200 - E200 Operating CHK   XXXX
19200 - E200 Receivable XXXX  
29100 - E100 Payable   XXXX


Finally, Entity A sends a fund transfer for this bill.

GL Debit (DR) Credit (CR)
12200 - E200 Operating CHK XXXX  
12100 - E100 Operating CHK   XXXX
29100 - E100 Payable XXXX  
19200 - E200 Receivable   XXXX


The simplicity of this plan is certainly a bonus; however, on your balance sheet, who owes who within these accounts may not stand out. In contrast, the advanced mapping plan will have a due to/due from GL account for every entity relationship. In the above example, there would balances in the payable and receivable accounts; however, you wouldn’t be sure what transactions make up those accounts until it's run by the entity (entities will be used on the transaction line of the AP bill or fund transfer).

inter-entity mapping Advanced Plan

The advanced plan uses individual GL accounts to show the balances between entities. The basic plan shows the receivable and payable balances but doesn’t use GL accounts to separate balances. Instead, in the basic plan the location dimension is used on the transaction lines.

There are two ways to set up the advanced plans. The first is to have the IER and IEP accounts represented by separate payable and receivable GL accounts.

Advanced Plan - Sample Transactions 1

With the above configuration balances accumulate in each of the IER and IEP accounts. To get a true balance between entities, you would need to calculate the net balance between the two accounts.

Another option is to match the IER and IEP accounts for entities A and B. This allows Intacct to pay down the balances within that account and allows you to see the net balance in one GL account on your balance sheet. The sample below shows that transactions will net themselves out once paid back or received.

Advanced Plan - Matching Entities

The advanced mapping will allow you greater visibility into your inter-entity mapping. To create this report, you would navigate to Reports > Financial Reports (+) > Name your report. In the rows tab, add account groups Intercompany Receivable and Intercompany Payable—Navigate to the columns tab—Expand your actual column by locations. You will create a report similar to the one below and can easily see the inter-entity balances by GL and Location.

Advanced Plan - Inter-Entity Mapping

Inter-Entity Mapping Import & Export

To edit your current mapping, navigate to Company > Inter-entity account mapping > Edit. The next screen allows the user to export the current template with all GL accounts, import an updated template, or edit the line information individually.

Inter-entity account mapping

Inter-Entity Bill Pay

When it comes to settling bills, handling inter-entity transactions can be seamless. Here’s a guide on how to navigate the process efficiently:

Accessing Bills for Multi-Entity Transactions:

  • Head to the "Accounts Payable" section and navigate to All > Pay bills.
  • Use the advanced filter option to streamline your search.

Filtering Entities for Payment:

  • Opt-in to view bills between entities with established business relationships.
  • Upon applying this filter, the list will display bills associated with the selected entities in their entirety, not just individual line items.

Handling Multi-Entity Bills:

  • Choose whether to include or exclude bills with multi-entity line items based on your requirements:
    • Include: Bills with at least one multi-entity line item matching the criteria will be included.
    • Exclude: Bills containing multi-entity line items, even if they meet the criteria, will be excluded.
    • Only: Display only bills with multi-entity line items, excluding those with multiple line items for the same entity.

Adjusting Display Preferences:

  • After applying the filter, the "Pay Bills" list will showcase bills from both the top level and entity level.
  • Optionally, select the "Show top-level transactions" checkbox to incorporate bills created at the top level that are relevant to your entity. Only bills generated at the entity level will be visible if left unchecked.

Any bills selected with a different location than the location assigned to the bank or credit card account used to pay the bills will automatically create an inter-entity journal entry. This entry can be viewed on the posting tab of the transaction.

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Sarah Mazzie

Written by Sarah Mazzie

Sarah Mazzie is a Senior Solutions Architect with RKL eSolutions LLC and specializes in Sage Intacct Implementations. Her background includes management accounting roles in industries such as construction, manufacturing, and cyber security. When not working, Sarah enjoys spending time with family and friends, working out, scuba diving, and traveling.