Inter-Class Transfers

Summary

I have a client who has several locations around the country, all bookkeeping in one corporation. He wants to be able to charge for inter-departmental services. (i.e. if work is done by his Florida office for the Indianapolis office, he wants to be able to "bill" the Indianapolis department (set up currently by classes) for the Florida work. I have thought about making journal entries in QB to accounts called "Intra-Company Income" and "Intra-company Expense", but this almost requires consolidation entries at Year-end and at any time his board wanted to see financials (which is every month). Other than tracking these Intra-company "ghost" charges outside of QB, this is the only way I can come up with. Do you have any suggestions?

Question

I have a client who has several locations around the country, all bookkeeping in one corporation. He wants to be able to charge for inter-departmental services. (i.e. if work is done by his Florida office for the Indianapolis office, he wants to be able to "bill" the Indianapolis department (set up currently by classes) for the Florida work. I have thought about making journal entries in QB to accounts called "Intra-Company Income" and "Intra-company Expense", but this almost requires consolidation entries at Year-end and at any time his board wanted to see financials (which is every month). Other than tracking these Intra-company "ghost" charges outside of QB, this is the only way I can come up with. Do you have any suggestions?

Answer

Journal Entries would be a fine way to accomplish inter-class transfers. For example, you could create a "zero-dollar journal entry" that uses the same account on two lines. The first line would debit the account in one class, and the second line would credit that same account in another class. You're right, this means a lot of extra work, but there isn't really a simpler way to do it. You could get fancy using bills and invoices with special items to do it, but it wouldn't really be any simpler, and perhaps it would even seem more complicated.