Accounting Entity

Setting up an accounting entity is a way to allow your business to consolidate certain accounting functions for multiple restaurants, such as paying bills (you can also designate another restaurant to pay the bills of multiple restaurants). An accounting entity does not have inventory, nor does it make sales; therefore, all of the restaurant-specific inventory features, Inventory JE features, DSR features, and invoice/manual check line-item detail are disabled for the accounting entity.

If you will use an accounting entity, you must define it by going to Setup menu > Entities submenu > Accounting Entities screen. You will also need to define the accounts to control how funds will flow between the accounting entity and the restaurants using the Inter-Company screen on the Setup menu. You can define as many accounting entities as you need.

If paying bills from the accounting entity, you will still need to enter the invoices in each restaurant. This allows your inventory cost figures to be automatically updated. When setting up AP processing on the restaurant’s Setup menu > Other Definitions screen > Accounts Payable tab, if you specify an accounting entity that will pay the restaurant’s bills in the "AP Invoices Paid By" box, Compeat automatically sets the restaurant’s AP account to the accounting entity’s AP liability account, and Payment Processing functionality will be removed from the Transaction menu for that restaurant. The restaurant’s liability will then automatically arise on the restaurant’s books through the Inter-Company definition as a "due-to" to the accounting entity.

Example
Assume that you are entering an insurance bill through the accounting entity and are allocating the expenses to two restaurants; when the invoice is posted, the GL effect is the following:

In order for the accounting entity to have funds to pay bills for a restaurant, the restaurant may direct some funds to the accounting entity. For example, the credit card receipts from the restaurant’s DSRs could be directed to the accounting entity's books. Payments from the credit card companies would be deposited in the accounting entity’s account to generate the cash needed to pay each restaurant’s bills. The DSR setup and inter-company definition create the receivable on the restaurant’s books due from the accounting entity. This is used to cover the liability generated from the AP processing by the accounting entity.

Note: If the accounting entity will be paying bills or depositing funds for restaurants, it must have its own bank account.

When processing payments, if an accounting entity pays the invoices, a single check is cut to a vendor for all restaurants who owe that vendor money. Each invoice and restaurant included on the payment is indicated on the check stub.

Additionally, if the accounting entity maintains house account transactions, a single consolidated statement is sent to customers who charge at more than one restaurant; otherwise, the customer will receive a statement from each restaurant at which they charge.