Can you simply send them an invoice for what you are transferring?

If we send an invoice, it hits sales/cost of goods leaving a balance to be paid.

I'm assuming you are indicating we would set up an internal transfer customer account, which would be tax exempt as the transaction is not an actual sale of material but is there a way to set this account up so it does not show as an actual sale?

Or would we have follow up and enter a Credit Memo for the amount of the invoice, hitting a specific GL account designated to track intercompany sales, and then apply this Credit Memo to the given invoice?

Send it to an asset or liability account.  Due to  XYZ company   and Due From ABC company

Is there a recommended way in doing so?  Only asking as many things that should be straight forward unfortunately have not always been so within Sage 50 . . 

Below are steps we have used to address various issues over time, which the third bullet point I am sure would not be used as it will result in the transfer transaction reporting as sales.

• Add a line item to the invoice sending the total to the appropriate account, resulting in a zero balance invoice?
• Enter a Credit Memo for the invoice total, applying amount to the appropriate account,, followed by connecting the invoice to the credit memo via Cash Receipts and/or Payments?
• Enter a Cash Receipts and/or Payment applying the payment amount to the appropriate account

If you are transferring the inventory to another company, the other company still owes you for it.   If you are transferring back and forth between the two, send the invoices to an asset or liability account and balance out at the end of each month or quarter. 

I agree.  Unless you are actually transferring money back and forth, you should keep the invoice open since the other company actually does owe the money to the company.  Set a long due date so that it doesn't show up as a late receivable.

If you ever settle these balances, by actually transferring money between the entities then you apply that payment against these invoices.

Thanks,
Ron

The statement to send the invoice to an asset or liability account is probably where I am getting confused. 

Products are paid for by the parent company and the product needs to move to the appropriate billing warehouse, if you will.  So, yes this is an inventory transfer and not an actual sale of product and there is no actual money moving.  

What I need to make sure is that the transfer of products does not end up reporting as a sale of goods until the actual sale occurs.

Sales are INCOME accounts and they show up on the Income Statement.   These would show up on a Balance Sheet.

Sales are INCOME accounts and they show up on the Income Statement.   These would show up on a Balance Sheet.

Yes, I know Sales are INCOME and they show on the Income Statement as well as the Balance Sheet.

Sage Support directed us to enter Inventory Adjustments to pull the material out from Company 1 and back into Company 2, but this completely messed with the books as well as does not provide the ability to submit a picking ticket to the warehouse.

When you say, "send the invoice to an asset or liability account", is where I am trying to obtain clarification. Are you stating to physically change the A/R account # listed on the invoice, which leave's the invoice open, or to apply a credit or payment against the invoice hitting the asset or liabilities account, which closes the invoice out.

I have been creating test entries and believe you are directing us to change the A/R account # on the invoice and then balance out monthly or quarterly by entering Receipt against the appropriate accounts as it is the only way to close out an invoice.

I truly am sorry for all of this back and forth, but Sage Support has not been able to answer any of these questions and our accountant does not understand why we can not just create a GL. 

Normally you create an invoice and the sale goes to the income account.  (DO NOT Change AR)  Change the number in the body of the invoice from an income Account to an Asset account ( Due From your company name.)

I can remote in and set this up for you, but I do charge for my services.

Oh my goodness, so you are stating to change the line item's GL Account # for each and every product listed on the invoice from the products default Sales Income Account to a designated Asset or Liabilities account (Due From ABC Company).

Would this also be done on the purchasing side of these transfers, changing the GL Account # per item from the Inventory Module to a designated Asset or Liabilities account (Due To XYZ Company)?

DeniseGr You have to remember that regardless of who actually pays for the inventory, the receiving company still needs to reflect their acquisition of the inventory from the original company.  Otherwise items won't balance.

If you don't like the work involved with using invoices and purchase orders and don't need the full record, you could use inventory adjustments.

So you would adjust out of XYZ company using the Due from ABC Company account and then you would do an inventory adjustment into ABC company using the Due to XYZ Account.

Thanks,
Ron

Ron –

Fully understand. The issue is, not knowing the correct way in which to enter these transactions within SAGE 50.

When I started this conversation, I asked if there is an easier way to complete these tasks, which will provide the needed paperwork, meaning Purchase Orders and Invoices, verse entering inventory adjustments.

Unfortunately, I do not know all the ins and outs of every aspect of SAGE 50, which is obvious.

End result, I need paperwork to provide to the warehouse to pull the products that need to be transferred to the secondary location. Once those transactions are processed (billed/shipped through) the invoice or purchase received balances need to be moved to the appropriate asset or liability account and the transactions need to be zeroed out (marked as Paid) with no actual funds, as they are basically internal transfers.

This is where I inquired if either of the following steps to move the balances are correct:

• Add a line item to the invoice sending the total to the appropriate account, resulting in a zero balance invoice?
• Enter a Credit Memo for the invoice total, applying amount to the appropriate account, followed by connecting the invoice to the credit memo via Cash Receipts and/or Payments?

Nonetheless, I do understand what needs to occur, but with SAGE 50 not allowing one to enter GL’s tied directly to a Customer Invoice or Vendor Purchase (at least not directly through the General Journal Entry screen), I am unable to wrap my head around my next steps if the bullet pointed steps above do not address things correctly.

We will be working further with Best Business Strategies, and I am confident that once shown where we make the GL adjustments within the transactions and seeing how it affects the books all will be good to go.