Guys, need you opinion on the following issue: 1. issue: Subsidiary B have a vendor bill, but the parent Subsidiary A will pay from it's bank account. Way to accomplish this: • One option is to using a Journal entry move the vendor bill amount from sub B's AP ledger to Sub A's AP ledger so it will show up under sub A's payable account. Now pay this JE (vendor is the JE line level entity) using regular bill payment method for sub A. Not elegant but quite straight forward. • Other option is to use scripting to create the JE in background rest remain the same. Any other ways can you think of? Much appreciated

Why do they want this? If the bill to is sub A they should ahve the bill and vendor relationship and most certainly only pay if they have the liability, ship to or whatever can be literally anywhere. In either case your first option is the closest you get to logging what actually happens outside of going straight to sub A which is still a much better solution.

Sub A is the parent of Sub B and pays the bill. Can this be done by inter company transactions sort of netting? Have done this long ago in GP and SAP but never in NS though I have been on NS for over 15 years. This is a common issue for multi national companies, not a one off kind.

Disagree - you are confusing it with paying a vendor in another country or for goods delivered at another subs offices or similar. Multi National companies have multi national compliance to consider and for that reason they will usually move funds instead of engaging in such a needlessly complex process. The issue arises when there is any kind of tax issue, maybe sub b is operating at a loss - can they deduct anything someone else paid for? IRS rulings says no, in whatever other country - who knows? Keep those relationships simple and you will avoid a massive number of issues.

That was my suggestion to my new company too

There is a 'famous' ruling from some bus company, Interstate something that a corporation could not deduct expenses that it paid on behalf of its wholly owned subsidiary (supreme court level) but the point here is that it makes something very simple (paying a vendor for their goods/services) a risk factor and introduced audit complexity. Depending on what countries there are further issues with indirect taxation, sub B would likely need to pay that for a (for them) domestic vendor - but not sub a, effectively evading tax in the process.

In our case, we use a dummy bank account to create Bill Payment against the original bill. And then we create an advanced intercompany journal entry to zero out the dummy bank account, take it out of the actual bank account and recognize the intercompany receivable and payable (we are planning to automate this). We are just not a fan of JEs applied to Vendor Bills as payments. It works for us because the liability is okay to sit in the child subsidiary until payment by the parent.

Same as Luis with the Multi Billion dollar company I work for...expense is always with child while parent pays the bills. To top it off they use a treasury solution that is customized to make everything work

Thanks Luis and Carl

@Luis we also use this method and created a script that creates a AICJE for each payment. Sub B has the dummy bank account which when used is our scripts prompt for creating the journal

Try nerdly bundle, you can post the vb on sub A, on the line you select the subsidiary which expense belongs to. And on approval the bundle will create a back end icon journal and the elimination to allocate the expense to the correct sub