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21st Century Accounting Help - Payables/Configure

Inter-Store Transfers

Inter-store Transfers give companies with multiple locations a way to automatically adjust G/L accounts when goods are paid for at one location but will be used or sold at other locations. After you configure Payables/Configure/Inter-store Transfers, the transfer transactions occur automatically when you post certain Payables/Vendor Invoices, Payables/Quick Checks, or Bank Accounts/Disbursement Checks. The transactions cause the general ledger to reflect

  • an expectation of reimbursement (a receivable) by the paying location for the debt it incurred or the amount it spent on a store’s behalf
  • a promise to pay (a liability) by the store that uses or sells the goods for the goods it purchased

Configuring transfers

Get the advice of your financial manager or accountant on the configuration of inter-store transfers.

Run Payables/Configure/Inter-store Transfers to “turn on” the function. Once transfers are enabled, you first identify the account segment in your general ledger Chart of Accounts that represents the locations – we will call them “stores” -- to which the goods and services are distributed.



The transfer accounts

Designate or create a “receivables” asset account for the location (usually with a unique “central store” segment) that pays off vendor invoices. This needs to be a receivables account with a store segment value that is the same as the store segment value of the central location’s Payables control account.  Most companies will have a single receivables account in the Chart of Accounts that serves as the transfer account for all stores.

Designate or create a liability account for each location that purchases goods and services to use or sell. This needs to be a liability account with a store segment value that is the same as the store segment value of the store’s distribution (usually expense) account(s). This liability account serves as the transfer account for the store.

Posting transfers

Run the command you use to enter payment for company purchases -- Payables/Vendor Invoices, Payables/Quick Checks, or Bank Accounts/Disbursement ChequesChecks. Turning on Inter-store Transfers has added a tabbed panel labeled “Inter-<segment name> Transfer” to the window. When you create an invoice or chequecheck that debits the purchase of goods and services to a “store” account that has a liability account assigned in the Inter-store Transfers window, the read-only tab shows the transfer transactions that will occur when you post the invoice.

Normally, Vendor Invoices credit the vendor accounts, credit the Payables control account, and debit the selected distribution account.  Quick Checks and Disbursements Checks credit the bank account for the total and debit the distribution accounts.

Now, in addition, the transfer function credits a store’s configured liability account for the amount debited to the store’s distribution account(s) and debits the central location’s configured receivables account for the amount(s) credited to the liability accounts configured for all the stores on the invoice.

Say what?

In effect, the general ledger reflects that the paying location now has an expectation of reimbursement (a receivable) for the debt it incurred (a Payable) or the amount it spent (an immediate payment). The location that uses or sells the goods has promised to pay (a liability) for the goods it purchased.

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