How do I handle inter-company transactions between two Zoho Books organisations?
Each Zoho Books organisation keeps its own ledger, so an inter-company sale is recorded twice: as an invoice in one organisation and a matching bill in the other, using due-to and due-from accounts. Books does not eliminate these balances for you in a standard setup. Many groups add automation to create the mirror entry and use Zoho Analytics for consolidated reports.
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Zoho Books treats each organisation as a separate company with its own chart of accounts, currency and tax settings. That is correct for legal entities, but it means there is no shared ledger. When Company A charges Company B, A raises an invoice to a customer record for B, and B records a bill from a vendor record for A. Each side posts to an inter-company receivable or payable account so the balances can be matched.
The pain is keeping both sides in step. Amounts, dates and currencies must agree, and one side is often forgotten. A common fix is automation: when an invoice to a sister company is created, a Deluge function or Zoho Flow creates the matching bill in the other organisation through the API. Reconcile the inter-company accounts every month and settle the balances with matching payments.
For group reporting, export or sync both ledgers into Zoho Analytics and remove inter-company balances in the consolidated view. Zoho has been adding multi-entity and ERP features, so check the current Books and Zoho ERP pages for what your edition offers. Cross-border pairs also need care with VAT, GST and transfer pricing, so involve your accountant before you design the flow.
If you would rather have this set up for you, Flowpeak can design the account structure, build the mirror-entry automation and the consolidation reports. Work is paid by milestone, and you get 30 days of free fixes after go-live so any edge cases found in the first month close are corrected.
Key points
- Create inter-company receivable and payable accounts in each organisation.
- Add each sister company as a customer and vendor in the other organisation.
- Record every inter-company sale as an invoice on one side and a bill on the other.
- Automate the mirror entry with Deluge or Zoho Flow to avoid missed postings.
- Reconcile and settle inter-company balances monthly, then consolidate in Zoho Analytics.
Common questions
Can one Zoho Books organisation hold two companies?
Not properly. Use one organisation per legal entity, and branches or reporting tags only for parts of the same entity.
Do the two organisations need the same currency?
No. Each can have its own base currency, but you must handle exchange differences on the inter-company balances.
Sources and further reading
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Written by Flowpeak, a Zoho implementation partner. Zoho pricing and features change, so confirm current details on the official Zoho site. Free checklists | Ask us a question