Note: This article applies to Spotlight Multi. If you're using Spotlight Reporting, please refer to our separate article.
There are a few ways that you can adjust for intercompany transactions in Spotlight.
You can change the mapping of the accounts in Spotlight so that the intercompany accounts cancel each other out in the consolidated report.
To do this, in the Customise Data tab for each entity click the report code alongside the intercompany account and ensure it uses the same report code as the intercompany account in the other entity.
For example: Company A might have $20k in intercompany revenue, whereas Company B has $20k in intercompany expenses. You can change the mapping of Company A revenue to expenses, thereby creating a -$20k figure in expenses. This naturally cancels out the $20k expenses that Company B has. This method will work for entities which code intercompany transactions to separate Profit & Loss and Balance Sheet accounts.
You can create adjustment accounts in Spotlight to cancel out the intercompany transactions.
To do this, from the Customise Data tab for the individual entity locate the section in which you want to record the adjustment, then click Add Account. You can then enter the adjustments as a negative value. You can use this method to adjust for intercompany transactions whether coded to separate accounts or lumped in with other transactions.
You can zero out the intercompany account balances from the Customise Data tab.
To do this, create a new 'eliminations' organisation within the group in Spotlight. You can then use the Excel import function to create a Chart of Accounts (use the Chart of Accounts under one of the trading entities) for the ‘eliminations’ company.
When you need to cancel out intercompany transactions, to do this enter them as a negative value in the ‘eliminations’ company. Your group report will now include an ‘eliminations’ column which back out the intercompany transactions.