How to Charge Intercompany Procurement Fees
Charging a management fee for centralized purchasing and supply chain negotiation services.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Intercompany Receivable - Subsidiaries | Asset | 4,500.00 | - |
| Intercompany Service Revenue | Revenue | - | 4,500.00 |
💡 Accountant's Note
A central procurement unit charges affiliates a fee (often a percentage of spend) for the administrative costs of managing group-wide supplier contracts.
Practitioner & Systems Framework
💻 ERP Architecture
Set up automated calculation based on a percentage of the total PO value processed per entity.
⚠️ Audit Flags
Markup percentages exceeding the arm's length principle for transfer pricing.
📄 Required Documentation
Master Service Agreement and transfer pricing study supporting the fee percentage.
Automate this entry with the JEH Accounting Suite
Stop doing manual entry. Our VBA-powered ERP automatically generates your ledgers, Trial Balance, and Financial Statements.
No Subscriptions. Own your data.
Expert Analysis by Qusai Ahmad
General Accountant Supervisor & IFRS Specialist
Specialized in SAP GUI automation and Middle Eastern tax compliance. Building digital tools for the next generation of finance leaders.
Related Journal Entries
Discussion & Community Questions
Loading comments...