In addition to Receivables/Payables solutions, Virtual Trader actively supports this General Ledger approach by providing an optional intercompany sub-ledger, to act as the book of record. The intercompany sub-ledger also provides functionality around intercompany management and automated settlement.
Alternative to Payables & Receivables
Virtual Trader accommodates the creation of intercompany activity directly as General Ledger journals rather than Payable & Receivable Sub-Ledger entries.
Virtual Trader’s Intercompany Sub-Ledger provides point of reconciliation, intercompany invoice print and Ledger of Record.
The Intercompany Sub-Ledger within Virtual Trader provides both manual and automated approval mechanisms for intercompany liabilities. There is reporting on intercompany balances, and analysis of planned payments.
When a payment plan is executed, the Payment Engine will create all the necessary accounting to clear the intercompany Accounts Receivable and Accounts Payable, and for cash the cash movement. Currency Gain & Loss is also evaluated.
Other forms of settlement other than cash can be accommodated.
Currency Gain & Loss
Virtual Trader evaluates any currency gain & loss associated with liability ‘closure’, whether through cash settlement, automated sweep to loan or liability re-assignment.
Virtual Trader also accommodates secondary ledgers and reporting ledgers in different functional currencies.
Cash Funding, Pooling & Sweep to Loan
Virtual Trader supports cash funding as an alternative to cash settlement, and cash pooling deployed to concentrate investment opportunities.
These are usually deployed alongside the sweep to loan functionality that clears intercompany liabilities and assets in preference to a consolidated loan. Realized or un-realized gain & loss can be accommodated at this time.
Intercompany Liability Reassignment
The Intercompany Sub-Ledger functionality within Virtual Trader supports the reassignment of intercompany liabilities and assets as an alternative to cash settlement.
Realized or un-realized gain & loss can be accommodated at this time.
Intercompany Balance & General Ledger Reconciliation
Virtual Trader’s Intercompany Sub-Ledger controls and checks intercompany Accounts Receivable/Accounts Payable transactions as they enter the ledger, and discrepancies are reported as they occur. In addition reports are provided to report on Accounts Receivable/Accounts Payable balancing across the ledger.
Reports are also provided to ensure that Virtual Trader intercompany balances reconcile with the corresponding balances in General Ledger.
Intercompany Loans & Interest Loans & Interest
Virtual Trader supports both manually created intercompany loans and intercompany liabilities and assets cleared in preference to an intercompany loan.
Virtual Trader also provides facilities to evaluate simple and compound interest on both loans and intercompany liabilities.
Multiple loan and interest agreements can be accommodated.
Net & Gross Settlement
Many organizations look to make summarized net settlement of intercompany liabilities. However net settlement is not acceptable in all tax jurisdictions.
Virtual Trader automates the settlement process, and will use net settlement where both parties are eligible. If either party is not eligible to use net settlement, Virtual Trader uses gross settlement by default.
To reduce bank charges, organizations often look to consolidate settlement payments between any two trading parties.
Virtual Traders Intercompany Sub-Ledger provides the flexibility to control the level to which intercompany liabilities are summarized. Ultimately the process can summarize settlement into a single payment between two entities across accounts, transaction types and even liability currency if required.
Functionality is provided to determine a preferred settlement currency, which becomes mandatory when consolidating across liability in different currencies.