How to Create Transactions Between Company Files in QuickBooks Desktop Enterprise

Before you start

• Check your edition. Intuit's article says intercompany transactions are available only in QuickBooks Desktop Enterprise Accountant, Diamond or Platinum. Gold, Pro and Premier aren't on that list.
• Check your version. Intuit's article describes the feature in Enterprise 2023, and its What's new in QuickBooks Desktop 2023 article lists it among that release's features.
• Back up first. Intuit recommends saving a backup before you create a relationship, because a relationship can't be removed. We suggest backing up both company files.
• Make sure the file you want to link is in your Intuit Account. Intuit says only companies where you're part of the Intuit Account appear in the list.
• We suggest deciding which Due To and Due From accounts each file will use. Setup lets you pick existing accounts or add new ones.
• Know what it covers. Intuit's article describes bills and checks only, not intercompany invoices.

If you change your mind later, Intuit says the only way out is to restore a backup from before the relationship was created. We suggest backing up right before you link, so that backup is as recent as possible. See how to back up and restore a QuickBooks Desktop company file.

Step 1: Create the relationship from the first company file

1. 1Go to Company > Intercompany Transactions. You can also open Intercompany Transactions from your Home display.
2. 2On the dashboard, select Create a relationship. Read the message, then select Continue.
3. 3Select the company file you want to link, then select Continue.
4. 4Choose the Due To and Due From accounts for this file. Pick existing accounts or add new ones.
5. 5Select Send Request. It becomes available once both accounts are set.
6. 6Follow the instructions that appear to finish the setup.

The request then shows on the Sent for approval tab of the Intercompany transactions dashboard. On account types, Intuit's article recommends Current assets for the Due To account and Current liabilities for the Due From account. Because the link is permanent, we suggest confirming both accounts with your accountant first.

If the other company file isn't listed

Intuit says you may need to add the company to your Intuit Account. Its article on Intuit account users covers a company file you can't see. If you're the admin, you may not have signed in to that file with your Intuit account yet. If you're an employee, ask the admin to invite you. Admins invite users from Company > Users > Intuit Account User Management.

Step 2: Approve the relationship in the other company file

1. 1Open the other company file and go to Company > Intercompany Transactions.
2. 2Select Relationships, then Pending my approval.
3. 3Find the request and choose Approve. You can also reject it.
4. 4Choose the Due To and Due From accounts for this file, from existing accounts or new ones.
5. 5Select Create relation, then follow the instructions to finish.

The relationship then appears on the Approved tab with an Approved status. Intuit says the other file must approve the request before you enter intercompany transactions.

Step 3: Enter the intercompany bill or check

Work in the company file that pays. Intuit's steps use Enter Bills:

1. 1Go to Vendors > Enter Bills.
2. 2Select Intercompany transactions to turn the bill into an intercompany bill.
3. 3Select the vendor.
4. 4In the table, choose the company that will receive the bill and enter the amount.
5. 5Check the account. QuickBooks fills in the account from the relationship setup, and you can change it.
6. 6Save the bill.

To see the bill on the intercompany dashboard, select Transactions, then Sent for Approvals. Intuit says the same steps work for checks, starting from Write Checks.

Step 4: Approve the transaction in the other company file

1. 1Open the company file that will receive the payment. That's the company you chose on the bill or check.
2. 2Go to Company > Intercompany Transactions.
3. 3Select Transactions, then Pending my approval. Every bill and check waiting on this file is listed.
4. 4Choose an expense account for the transaction.
5. 5Choose Approve, or reject the transaction.

What happens after approval

When a bill or check is approved, QuickBooks creates an intercompany journal entry. Intuit says it uses the Due To account and the expense account chosen at approval. To track it afterward:

• In the file that approved it: select Transactions, then Approved. You can view rejected transactions there too.
• In the file that sent it: go to Company > Intercompany Transactions, then select Transactions and Approved to see the status.
• For every intercompany transaction across related files: go to Company > Intercompany Transactions, then select Transactions and View Reports.

For how journal entries work in a Desktop file, see how to make and import journal entries.

Limits and gaps in Intuit's article

• A relationship can't be removed. Undoing one means restoring a backup made before it existed.
• Only Enterprise Accountant, Diamond and Platinum have it. Intuit introduced it in Enterprise 2023.
• Only bills and checks are covered. The article doesn't describe intercompany invoices, sales orders, or payments that settle what one file owes another.
• The article doesn't say how to edit or void a transaction after approval. It also doesn't say what happens to the original bill or check when the other file rejects it.
• The approving file has to pick an expense account for each transaction.

Intuit's article doesn't mention currencies. If one of your entities buys or sells in another currency, we suggest reading how to set up multicurrency in QuickBooks Desktop before you link the files. To report across several entities, see how to combine reports from multiple company files.

Where QuickBooks Desktop leaves the work to you

• Every bill or check waits for someone in the other file to approve it and choose an expense account.
• Choosing the Due To and Due From accounts in each file, and checking them with your accountant, comes before you link.
• Settling balances between your entities isn't covered by Intuit's article.
• Each file has to be in your Intuit Account before you can link it.
• Reviewing the intercompany report and comparing it with each file's books is a person's job.
• Making the backup before you link is on you, since the relationship is permanent.