How to Account for Procurement Service Fees
Recording the allocation of centralized procurement costs and the associated markup to participating subsidiaries.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Procurement Service Expense | Expense | 12,000.00 | - |
| Intercompany Payable | Liability | - | 12,000.00 |
💡 Accountant's Note
A subsidiary pays the central procurement hub for sourcing activities, typically calculated as a cost-plus markup on the hub's operating expenses.
Practitioner & Systems Framework
💻 ERP Architecture
Allocate via assessment cycles in the controlling module based on purchase volume.
⚠️ Audit Flags
Double-counting of costs if procurement is already baked into inventory prices.
📄 Required Documentation
Cost-plus study and logs of procurement activities performed by the hub.
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