Intercompany Settlement in Docyt

• 1. Intercompany Settlement of Bank Transactions

  • 📍 Where: Reconciliation → Uncategorized Transactions

  • 🔧 Step guide:

  • 📍 Where: Expense →Bill Pay → Invoice Queue

  • 🔧 Step guide:

• 2. Special Scenarios: Locked Books Handling

  • If Books Are Not Locked in Businesses A & B:

  • If Books Are Locked in Business B:

1. Intercompany Settlement of Bank Transactions

Scenario 1: A parent company makes a payment, and the expense must be split with a child company.

📍 Where: Reconciliation → Uncategorized Transactions

🔧 Step guide:

Step 1: The bank payment (e.g., $500) appears as an Uncategorized Transaction in the parent company’s bank feed (e.g., Company A: Hass & F1).

Step 2: Split the transaction:

1. Go to Reconciliation > Tasks > Uncategorized transactions

2. Click on the transaction.

3. On right opened window select the Transaction Type > Vendor Name > Select Category

4. In the Business Name field, assign each split to a different business.

5. Select the correct Chart of Accounts.

6. Enter the split amount (e.g., $250 each).

Step 3: After the Categorization:

1. A Journal Entry is automatically created in the child company (e.g., ‘My Cool Biz’).

2. No further action is needed in the Expense module

Scenario 2: A vendor invoice is issued to the parent company, but payment is shared with a child company.

Example: Startup11 (Parent) pays $500 to KFC on behalf of itself and Homely Designs & Manufacturing (Child).

📍 Where: Expense →Bill Pay → Invoice Queue

🔧 Step guide:

Step 1: Upload the invoice to the Invoice queue of Startup11.

1. Click on Expense > Bill Pay> Invoice queue

2. Click on Add Invoice tab

Step 2: Split the invoice amount (e.g., $250 each) by:

1. Assigning the correct Business Names in the split section.

2. Save the entry.

Step 3: Move the invoice to Verification Stage, then click Mark as Verified.

1. A Journal Entry is automatically created in the child company (Homely Designs & Manufacturing).

2. The Intercompany tag and Journal Entry ID will appear under the invoice in Startup11.

Step 4: In the child company:

1. The journal entry appears in the books.

2. A memo link connects directly to the related invoice in the parent company.

2. Special Scenarios: Locked Books Handling

If Books Are Not Locked in Businesses A & B:

1. Editing the original invoice/transaction will delete and recreate the journal entry in both Docyt and QuickBooks.

2. Deleting or marking the source invoice as “Do Not Pay” will delete the intercompany journal entry from the other business.

3. Merging the source invoice will also remove the associated journal entry.

If Books Are Locked in Business B:

You cannot do the following in Business A:

1. Verify, edit, delete, or mark as Do Not Pay any invoice with intercompany splits.

2. Approve, edit, or delete receipts with splits.

3. Categorize or edit split bank transactions.

🛑 In all these cases, an error will display: “Action cannot be completed on this invoice due to inter-company splits. One or more of the involved businesses has their books locked.”