How to split one invoice across several entities in Xero or MYOB

Short answer

1. Agree each entity’s share in dollars.
2. Decide who pays the supplier.
3. Enter a bill for each entity’s share in its own file.
4. If one entity pays all, record the intercompany balance in both files.
5. Keep the supplier’s invoice with each entity’s bill.

Before you start

• Write down the basis for the split. An auditor will ask for it.
• Check that each entity is registered for GST if it plans to claim a credit.
• Have an intercompany account in each chart of accounts if one entity will pay for the others.

The manual way in Xero or MYOB

There is no split tool in either product. Each Xero organisation or MYOB company file keeps its own books.

Option A: each entity pays its own share.

1. Work out each share.
2. In entity A, enter a bill for A’s share. In Xero this is Business > Bills to pay > New bill. In MYOB it is the Purchases area.
3. Repeat in entity B and any other entity.
4. Use the same supplier invoice number in each. Add the full invoice total in the reference or notes.
5. Each entity pays the supplier its own share.

Option B: one entity pays the whole bill.

1. Enter the full bill in the paying entity (A).
2. Pay the supplier from A.
3. Record what B owes A. In A, book it to an intercompany receivable account. In B, enter a bill or journal for its share against an intercompany payable account.
4. Settle the balance later with a bank transfer, and record it in both files.

Limits to know:

• The supplier may refuse to issue separate invoices. Ask first. A separate invoice per entity is the cleanest record.
• Nothing in either product links the entries. A mistake in one file is not caught in the other.
• A share that does not divide evenly needs a rounding line in one entity.

Worked example

Example Plumbing Supplies sends one invoice for $9,900 including GST for shared office fit-out. It is addressed to Example Holdings Pty Ltd. Three entities share the cost by floor area.

Entity	Share	Amount incl. GST
Example Holdings	50%	$4,950.00
Example Trading	30%	$2,970.00
Example Services	20%	$1,980.00

Example Holdings pays all $9,900. It books $4,950 as its own cost and $4,950 to an intercompany receivable. Trading enters $2,970 against an intercompany payable. Services enters $1,980. The two payables settle by bank transfer.

Common mistakes

• Entering the full invoice in every file. The supplier is then owed three times the amount in your books.
• Claiming the full GST credit in the paying entity. Each entity should claim its own share. Check with your accountant.
• Leaving the intercompany balance open for months. It makes both sets of accounts hard to read.

Next step

Try an invoice to see how Pulsify handles each of your companies, one Xero organisation or MYOB file per company. Details are on the multiple entities page. To connect each file, see the connect Xero or MYOB guide. The ATO sets out what a valid tax invoice must show.