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Construction Groups · Track 1 · Tutorial 1 of 2

Set up intercompany types for a construction group

Before you clear anything, give each item that moves between your companies a type of its own, so it is filed and checked where your team expects it. This is the set-up that suits a construction group.

You will needThe group set up, with its companies loaded and mapped. The Administrator or Data Loading Admin role for your group.
By the endThe intercompany types a construction group needs switched on, its own types added, and the Intercompany menu arranged around them.

1Know what moves between your companies

A construction group usually has a holding company, contracting companies, a plant company that hires equipment to them, and project vehicles. These are the items that move between them:

FromToWhat
Holding companyContracting companiesManagement fees
Plant companyContracting companiesPlant hire
Contracting companyContracting companySubcontract work, with retentions held back
Holding companyProject vehiclesLoans and interest
Contracting companyGroup companyBuilding an asset the group keeps

Each item should have a type of its own, so it is filed, listed and checked where your team expects it. Your group may not have all of them, or may have others: adjust the steps below to what your companies actually book.

2Switch types on and off

  1. Select the group, and open Settings → Global Settings → Intercompany Types.
  2. Click the switch on each type below that needs changing. Each switch is saved the moment you click it.
TypeChangeFor
Trade Receivables / PayablesKeep onUnpaid plant hire, fees and subcontract invoices.
Sales / Purchases / ServicesKeep onThe base for Subcontract Work.
Management ChargesKeep onThe holding company’s fees.
Intercompany LoansSwitch onFunding for project vehicles.
Rental / Lease AdjustmentsSwitch onThe base for Plant Hire.
Fixed AssetsSwitch onAssets one group company builds for another.
Inventory TransfersSwitch offGroups that don’t move stock between companies leave it empty.

A new group starts with Trade Receivables / Payables, Sales / Purchases / Services, Inventory Transfers and Management Charges switched on. Other Eliminations is always on. See Switch on and add intercompany types.

3Add types of your own

  1. Click Add type.
  2. In Type name, enter Plant Hire.
  3. In Accounting treatment, choose Rental / Lease Adjustments, and click Save type.
  4. Add the others the same way.
Type nameAccounting treatmentFor
Plant HireRental / Lease AdjustmentsHire charged by the plant company. Accepts Revenue, Direct Costs and Expense accounts, so hire income meets hire cost.
Subcontract WorkSales / Purchases / ServicesWork one contracting company does for another on a project.
RetentionsTrade Receivables / PayablesRetentions held back on subcontract payments, kept apart from ordinary unpaid invoices.

The accounting treatment decides how the type behaves and which accounts its entries accept. A type of your own is in the menu only while the built-in type it works like is switched on.

4Arrange the menu

  1. Click Manage menu.
  2. For each group below, enter its Group name and click Add group.
  3. Drag each type onto its group, and click Save menu.
The Intercompany menu for a construction group: Contracts holding Sales / Purchases / Services, Subcontract Work, Retentions, Trade Receivables / Payables; Plant and assets holding Rental / Lease Adjustments, Plant Hire, Fixed Assets; Group charges holding Management Charges; Funding holding Intercompany Loans
The menu grouped the way the team works.
GroupTypes in it
ContractsSales / Purchases / Services, Subcontract Work, Retentions, Trade Receivables / Payables
Plant and assetsRental / Lease Adjustments, Plant Hire, Fixed Assets
Group chargesManagement Charges
FundingIntercompany Loans

See Arrange the Intercompany menu for moving, renaming and removing groups.

Check

Intercompany in the sidebar shows the groups above, and each type of your own is listed on Intercompany Types with Kind Custom and status Active.

5If something goes wrong

A type of your own isn’t in the menuThe built-in type it works like is switched off. Switch it on.
… cannot be used in this elimination type.The type’s accounting treatment doesn’t accept that account. Check the table in Switch on and add intercompany types, and choose the treatment whose accounts fit.
The arrangement was lostThe dialog was closed without Save menu. Arrange it again and save.

Want more detail? See the documentation

Intercompany Types Intercompany Eliminations Guide
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