Wages that paid from one company to the another in group

TamNguyen Member Posts: 48
edited August 2016 in Reckon Accounts (Desktop)
Reckon Accounts Enterprise 2015

When I was preparing BAS for companies, I check the NCF tax code to make sure all transactions are correct and I found some issues. One of which is this. 

We have a group of companies in which sometime one company (company 1) paying wages for the other (company 2). The previous manager has write cheque from company 1 to company 2 with tax code NCF. When going through the file for company 2 I didn't see any record of wages or any reimbursement to company 1. 

What do you think I should do?

I was thinking: 

(1) I will fix the cheque so that it going to a loan for company 2. Record the loan in company 2 and using the loan to pay wages. Then make company 2 pay back the money owed to company 1. Or,

(2) Recording wages from company 2. 

What is your opinion? What is your approach to this issues? 


  • Leanne_6969527
    Leanne_6969527 Member Posts: 5
    edited September 2015

    Hi, the wages should only be recorded in the company that has "incurred" the wages. Doesn't matter who actually pays them. I would ensure a loan account is shown in both entities and any monies xferred does so thru the loan accounts. The wages are "paid" from the correct company that incurs the payroll liability. If funds are not reimbursed then the bank accts are still balanced, the payroll is correct and in the correct entity. If monies are reimbursed then the monies are reversed as above to show a loan repayment. This way the loan accounts in both entities should also balance and reconcile.

    In company 1 - Xfer the money from company 1 chq acct to company 2 loan account - noting what xfer for

    In company 2 - receive money in company 2 chq acct from company 1 loan account then pay wages from company 2 chq acct

    I hope I have explained this correctly. Should be no different to lending funds from one entity to another, diff is payroll needs to be recorded as "Wages" in the entity responsible for payment of wages..