The interoffice posting account function automates the distribution of the system interoffice clearing account balance into designated asset or liability accounts based on the net interoffice balance between offices.

- Debit balances are allocated to an asset account.
- Credit balances are allocated to a liability account.

This ensures that asset-type accounts do not incorrectly appear as negative amounts on the balance sheet, improving financial accuracy and reporting.

How to Set Up Interoffice Balance Allocation

Go to **Accounting &gt; General Ledger &gt; General Ledger Accounts**.

Click **New Interoffice Posting** at the top right.

Fill in the required fields: 

- **Office** – Select the originating office responsible for the transaction.
- **Related Office** – Select the corresponding office involved in the transaction.
- **Asset Account** – Choose the designated asset account where debit balances will be posted.
- **Liability Account** – Choose the designated liability account where credit balances will be posted.

Running the Allocation Process at Month-End

Once all month-end transactions and journal entries are complete, finalize the interoffice allocation:

1. On the **Search Interoffice Posting Accounts** page, click **Create Allocation Journals**.
2. The system will:
   - Create journals to distribute the interoffice balance to the correct asset and liability accounts.
   - Ensure the interoffice clearing account has a zero balance at month-end.
   - Reverse these journals in the following accounting month to maintain balance consistency.

Some companies choose to run this process only at year-end, while others prefer to do it at every month-end close to keep interoffice balances accurate throughout the year.

Key Benefits of Automating Interoffice Balance Allocation

- Eliminates manual journal entries, reducing errors.
- Ensures consistency and compliance across multiple offices.
- Prevents negative asset balances from appearing incorrectly on financial statements.
- Saves time by automating interoffice financial reconciliation!

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The interoffice posting account function automatically allocates interoffice clearing balances to asset or liability accounts based on net balances. Debit balances go to an asset account, while credit balances go to a liability account, ensuring accurate financial reporting and preventing negative asset balances.

Automating Month-End Interoffice Balance Allocation

Overview

How to Set Up Interoffice Balance Allocation

Create a New Interoffice Posting

Running the Allocation Process at Month-End

Year-End vs. Month-End Processing