inter-company payments on behalf of other companies | AccountingWEB

inter-company payments on behalf of other companies

Hi all

I do accounting for a group of companies, all of whom are under the control of a group of 4 directors. There are often transfers of money between the companies in order to help pay off invoices etc, and usually this is a simple transfer of money on a tax code of T9 (no tax paid on these transfers) as opposed to the most used tax code we use of T1 (17.5% VAT). One of the companies does very little trade (say company A) and has few invoices, but recently we made a payment to company X which was more than the amount of money sitting in its bank account. My director told me to simply make a payment directly from our company B's bank account. However, now I can't clear the outstanding invoices on company A's account with differeing tax codes; there is an internal credit note on our account with company X for the amount that I wanted to pay (it covered about 5 invoices) which goes to the nominal code that we use for intercompany transfers. This credit note has a tax code of T9 relating to the untaxed transfer. However, now I can't pick up that credit note and allocate it to the 5 invoices, as they are standard tax invoices from the supplier, company X, on a tax code T1, so they can't be paid off with the internal credit note. Is there a way to do this?

I can't really receipt a payment directly into company A's account as that isn't what happened, the money left company B's account to pay company X on behalf of company A. Anyway, it would be on a T9 tax code, and I couldn't then apply any money to the invoices as there would be no money leaving company A's bank account to be applied to these 5 invoices in the bank rec.

I am fairly new to accounting, as is probably obvious, so any help, in fairly simple terms, would really help!


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Clearing in Sage

David2e |
David2e's picture

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LindaParsons57 |