Your companies trading with each other
When one of your Entities buys from another, its purchase order makes the seller's sales order. The delivery fills the buyer's goods receipt, and the invoice makes the buyer's bill with the same number, date and lines. Each document shows its twin, and a list shows the twins not yet posted.
PLANSScale only
Why it matters
Family trading groups often run two or three firms: a wholesale firm, a retail firm, an import firm. They sell to each other every week, and every sale is typed twice. At the year end the two sets of books disagree, and the group's profit counts the same goods twice. In SmartMy Trade one Entity's purchase order becomes the other's sales order, the delivery fills the receipt, and the invoice becomes the bill. The accountant checks a short list of twins not yet posted, and the consolidated reports keep sales between your firms apart.
The problem it solves
- Your wholesale firm sells to your retail firm every week, and each sale is typed twice: once as a sale, once as a purchase.
- At the year end the two ledgers do not agree, and the accountant spends days finding a bill entered at the wrong rate.
- Goods leave one godown on a challan, and the other firm's storekeeper does not know what to expect.
- The group's profit counts the same goods twice, because sales between your own firms are mixed with sales to outsiders.
How it works
- Your administrator adds a rule under Trade > Configuration > Shops and Parties > Inter-Company Rules. It names the selling and buying Entities, the price list and the selling godown. It also names a user on each side and whether the twin is confirmed at once. One rule covers one direction, so a pair that sells both ways has two rules.
- The buying Entity's purchase officer makes a purchase order to the other Entity, which is a supplier like any other, and confirms it.
- At once the selling Entity gets a sales order with the same items and quantities. Prices come from the rule's price list, or the purchase order; its number is the customer's reference. It is made as the selling side's user, so that side's credit and rate checks still apply.
- It works the other way too. A sales order confirmed to the other Entity, with no purchase order behind it, makes the buyer's purchase order.
- When the seller's storekeeper validates the delivery, the buyer's open goods receipt is filled with the quantities delivered. The buyer's storekeeper checks what arrived and validates it.
- When the seller posts the invoice, the buyer gets a draft bill with the invoice number as its reference. It has the same date, lines, quantities and prices, linked to the purchase order. A credit note makes a refund bill the same way.
- The buyer's accounts check the bill and post it. Trade > Reports > Tax and Accounts > Inter-Company Mismatches lists every posted document whose twin is not posted yet.
Everything it does
The rule between two Entities
- Selling Entity and Buying Entity; one rule per pair and direction
- Price List: the prices between the two; empty means the purchase order's prices
- Selling Godown: where the seller's sales orders deliver from
- Selling Side User and Buying Side User: the twins are made as these users, with their rights and approvals
- Confirm the Twin at Once: on to start with; off leaves the twin order as a draft for the other side to check
- A rule can be archived to stop it; its changes are kept in its history
What becomes what
- Purchase order confirmed: the seller's sales order, linked both ways
- Sales order confirmed to the other Entity: the buyer's purchase order, at the sale price less any discount
- Delivery validated: the buyer's open receipt takes the quantities delivered, with a note to check and validate it
- Invoice or credit note posted: the buyer's bill or refund, as a draft, with the buyer's own purchase taxes on each item
- Each order, invoice and bill shows its twin; a note on each says what was made in the other Entity
Checks that stay
- The seller's own credit limit and minimum rate checks run on the twin sales order, as for any customer (Growth features, in Scale too)
- The buyer posts the bill only after checking it, so a wrong line can be fixed first
- Cancelling a purchase order leaves a note on the seller's sales order to cancel it if it has not shipped
Reports
- Inter-Company Mismatches: posted invoices and bills whose twin is still a draft or cancelled
- In Scale's Financial Reports, Consolidated (inter-company apart) shows each Entity, an inter-company column and the group's total less the sales between your Entities
- Party ledgers: each Entity is a party in the other's books, so the balance between them reads like any party's
What it does not do
- Items with batches or serial numbers are not filled on the buyer's receipt: the buyer enters the lots
- Cancelling a sales order, or revising an order, leaves no note on the twin: tell the other side
- Both Entities must be in the same SmartMy account; trading with a sister company on another system is ordinary buying and selling
Who uses it
Trade AdministratorSets up the rule for each pair of Entities and the user each side works as.
Purchase Officer of the buying EntityRaises and confirms the purchase order to the sister Entity.
Billing staff of the selling EntityDelivers against the sales order that arrived and posts the invoice.
Storekeeper of the buying EntityChecks the receipt that was filled for them and validates it.
AccountsPosts the draft bills and clears the mismatch list before closing the month.
Where you use it
- Web: Trade > Configuration > Shops and Parties > Inter-Company Rules
- Web: the purchase order, sales order, receipt, invoice and bill, each with its twin; Trade > Reports > Tax and Accounts > Inter-Company Mismatches
- Web: Accounting (Invoicing) > Reporting > Financial Reports, for the consolidated view
- Not in the SmartMy Trade app: the app's bills and receipts work as usual, and the twins are made on the server
What you control
Settings
- Per pair of Entities: price list, selling godown, the user of each side
- Confirm the Twin at Once: on to start with
- Each Entity keeps its own taxes, credit limits, minimum rates and approval chains
Approvals
- Trade hold: a twin sales order that breaks the seller's credit limit or minimum rate waits for the seller's approvers
- Trade hold: a purchase order above the buying Entity's Purchase Order Limit waits before it is confirmed, and only then makes the twin
Notifications
- No message of its own: a note on each document says what was made in the other Entity, seen by its followers
Works with
SmartMy DistributionA brand's dealers who bill from SmartMy Trade in their own Entity use the same rules. The dealer's purchase order becomes the brand's sales order, and the brand's invoice the dealer's bill.
Questions
Do we still have to post the bill on the buying side?
Yes. The bill is made as a draft so the buyer's accounts can check it, then post it. Inter-Company Mismatches lists the ones still waiting.Which prices are used between our firms?
The rule's price list when you set one. Without it, the sales order takes the purchase order's prices, and a purchase order made from a sale takes the sale price less the discount.Does the selling firm's credit limit apply to our own firm?
Yes. The twin sales order is an ordinary order of the selling Entity. If it breaks that Entity's credit limit or minimum rate, it waits for approval there.What if goods with batch numbers are sent?
Quantities of items with batches or serials are not filled on the buyer's receipt. The buyer's storekeeper enters the lots that arrived.Can we see the group's profit without the sales between our firms?
Yes, in Scale's Financial Reports. Choose the Entities and Consolidated (inter-company apart): the inter-company column is taken off the total.Which plan has it?
Scale, which is made for groups of Entities. Each further Entity is added to your subscription; ask us how many your plan includes.Related features
ACROSS SMARTMY TRADESeveral entities in one accountRun the firms of your trading group, such as a wholesale firm, a retail firm and an import firm, in one SmartMy Trade account. Each Entity keeps its own GSTIN, shops, bills, settings and books. Your staff switch between the Entities they are allowed in, and the owner sees them together.ACCOUNTINGFull accounting with GST returnsEvery bill, return, receipt, supplier bill and cheque posts into your books as you work, with the shop on each bill. Growth adds accounting reports by shop. Scale adds the full accounting screens and Financial Reports, from ledgers to cash flow and consolidation, with GSTR-1 and GSTR-3B for India.ORDERS, PURCHASE AND CREDITPurchase orders, goods receipts and supplier billsOrder from a supplier, count what arrives against the order with the supplier's bill number and any damage, and book the supplier's bill. A purchase order over your limit waits for a manager's approval first.ORDERS, PURCHASE AND CREDITSales orders and delivery challans with transportTake a quotation or order, and send the goods on a delivery challan with the transporter, vehicle and LR. Bill what was sent, and tell the party when the order is confirmed and when the goods leave.ORDERS, PURCHASE AND CREDITCredit limit, overdue and cash-only holdsSome credit bills and sales orders wait for a manager's approval. That is when over the party's credit limit, to a cash-only party, or to a party with overdue bills. Approved, it posts or confirms by itself.WITH OTHER SMARTMY PRODUCTSDealers of a SmartMy Distribution brand billing from TradeIf a brand you deal for runs SmartMy Distribution, it can set you up with SmartMy Trade in your own Entity in its account. You bill your retailers, keep stock and your party ledger there. Your purchase order to the brand becomes its sales order, and its invoice your bill. Your sales of its items reach it without a monthly report.
See your shop on it.
Tell us what you sell, how many shops and godowns you run and how you bill today. We will set up your items and parties with you and print your first bill.