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Intercompany Sales

Learn what Intercompany Sales are and how you can easily reflect them with the Accounting solution by KPI.

What are Intercompany Sales?

Intercompany sales are transactions that occur between two or more entities of the same corporate group. This means that a parent company and its subsidiaries, or different subsidiaries owned by the same parent company, are involved in a business transaction with each other.
These transactions can include the sale of goods, services, or assets from one entity to another within the same corporate group.

What are reasons for Intercompany Sales?

Intercompany sales are common in large corporations that have multiple subsidiaries, often operating in different geographic locations or in different industries. The objective of such sales may vary and can include optimizing supply chains, taking advantage of tax structures, or reallocating resources and goods within the corporate group.

How to reflect Intercompany Sales on KPI?

To conduct intercompany sales, which could be between subsidiaries from bottom to up sales, from the parent company to subsidiaries or vice versa, you would need to add a customer and relate it one of the companies in the network.

Add subsidiary/parent companies as a Customer Learn more about how to add Subsidiary companies here.

In “Adding a Customer”, you would have an additional field “Subsidiary”, which is visible only if the Multi-Company feature is enabled.

In order to relate a customer to a subsidiary, you would need to select it from the list of active subsidiaries in your company. After you have the subsidiary as a customer you can start selling services and inventory items. (Note: Product Group and Assembly items cannot participate in intercompany sales).

If the items you are selling to your subsidiary are not listed in that company’s Products/Services listings page, those items will be automatically created in the child company’s account.

See also