Intercompany Journal Entry

The Intercompany Journal Entry simplifies creating paired journal entries across two companies. Instead of manually creating one journal entry, submitting it, then remembering to create and fill in the counter-company's journal entry, you do it all from a single form — NexWave handles the account mapping and debit/credit swap automatically.

Key Concepts

How It Works

An Intercompany Journal Entry (ICJE) is a single document that generates two linked Journal Entries — one for each company. You enter the accounting lines from the perspective of the first company, and NexWave automatically:

• Maps accounts to the equivalent accounts in the second company (matched by account name and account number)

• Swaps debits and credits so the second company's entry mirrors the first

• Links both Journal Entries via the standard inter-company journal entry reference, so they appear connected in both companies

Status Workflow

Account Mapping

When generating the second company's Journal Entry, NexWave finds the equivalent account by matching:

1. Account Name — must match exactly

2. Account Number — must match (if the source account has one)

Both companies must share the same chart of accounts structure for this to work.

Prerequisites

• Same default currency — Both companies must use the same default currency (e.g., both NZD or both AUD). Multi-currency intercompany entries are not supported.

• Same chart of accounts structure — Accounts must exist in both companies with matching names and numbers.

• User permissions — The user needs Accounts Manager or System Manager role, with access to both companies.

Step-by-Step Guide

1. Create a New Intercompany Journal Entry

Navigate to the search bar and type Intercompany Journal Entry, then click + Add Intercompany Journal Entry.

Fill in:

• Company — The primary company (accounts are entered from this company's perspective)

• Second Company — The counter-company

• Posting Date — Defaults to today

• User Remark — Optional note that carries through to both Journal Entries

2. Add Account Rows

In the Accounting Entries table, add rows with:

Totals must balance — Total Debit must equal Total Credit.

3. Create the Journal Entries

Click the Create Journal Entries button. NexWave will:

1. Save any unsaved changes

2. Create a draft Journal Entry for the primary company (with your exact account rows)

3. Create a draft Journal Entry for the second company (with mapped accounts and swapped debits/credits)

4. Link the two JEs together via the inter-company reference

5. Update the ICJE status to Entries Created

A green alert confirms creation with links to both Journal Entries.

4. Review the Draft Journal Entries

The Connections section at the bottom of the form shows both linked Journal Entries. Click through to review each one:

• Primary company JE — Should match your ICJE rows exactly

• Second company JE — Accounts are mapped, debits/credits are swapped, cost centre uses the company default

5. Submit

Once you're satisfied with both draft JEs, click the Submit button on the ICJE. This:

1. Validates both JEs are still in draft

2. Submits both Journal Entries (primary first, then second)

3. Updates the ICJE status to Submitted

Both JEs are now posted to the general ledger with proper inter-company cross-references.

6. Recreate Journal Entries (If Needed)

If you need to change the ICJE after creating JEs but before submitting:

1. Edit the account rows on the ICJE as needed

2. Click Recreate Journal Entries

3. Confirm the prompt — this deletes the old draft JEs and creates new ones

4. Review the new drafts and submit when ready

7. Cancel

To reverse a submitted ICJE:

1. Open the submitted ICJE

2. Click Menu > Cancel

3. Both linked Journal Entries are cancelled automatically

4. The ICJE status changes to Cancelled

You can then click Amend to create a corrected copy if needed.

Use Cases

Company A Pays Expenses on Behalf of Company B

Company A pays a $500 electricity bill that belongs to Company B.

On the ICJE (from Company A's perspective):

NexWave creates:

• Company A JE: Debit Intercompany Receivable, Credit Bank (as entered)

• Company B JE: Debit Bank (mapped), Credit Intercompany Receivable (mapped) — debits and credits swapped

Intercompany Fund Transfer

Company A transfers $10,000 to Company B.

On the ICJE (from Company A's perspective):

The generated JEs will reflect the fund movement in both companies' ledgers.

Troubleshooting

Related Documentation

• Intercompany Elimination — Month-end process for removing intercompany balances from consolidated reports

• Accounting — Financial management overview