Payables & Cash Management

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    Beth Bleijie
    One check is drawing on bank account across two Companies
    Topic posted October 22, 2019 by Beth BleijieBronze Trophy: 5,000+ Points, tagged General Ledger, Payables, Setup / Administration 
    10 Views, 1 Comment
    Title:
    One check is drawing on bank account across two Companies
    Summary:
    A check drawn on one company is posting against the bank account on two companies
    Content:

    We have two companies, one is essentially a spin off from the other, so there are a lot of suppliers who still bill one of the companies, but do not yet bill each separately.

    When we have AP invoices with expenses for both companies we will enter it as one company 10 invoice but code the expenses to both company 10 and company 30.  This will create intercompany/eliminating AP/AR entries, which work ok.

    When drawing a check to pay this invoice it is drawn fully on company 10.

    This has been ongoing since August 2018, but recently drawing a check with this scenario on company 10 actually splits the payment's journal to hit BOTH company 10 and company 30 bank accounts, according to the allocation on the invoice between the two companies.  (Looking at the cases where this has happened I see that the Payable is created in a split, not just the expense (DR) side of the entry.  See attached Word doc with screenshots

    Any idea why this would suddenly start happening?  My first guess is that it is something we changed in the background for bank accounts or intercompany (we have been trying to fix the interco/consolidating entries which aren't quite working properly), but I'm not sure where to start looking.

    Beth

    Comment

     

    • David Taylor

      Hi,

      You have automatic offsets turned on which means that payables will automatically generate liability entries that balance with the expense distributions.  So when the payment is made I would expect to see the credit to the bank and then debit entries to the two company liability accounts.