To take advantage of enterprise analysis in Ambrook, you may need to have one enterprise “pay” another, even if money doesn’t actually change hands.
Example: If you grow hay for your dairy cows, that feed isn’t free. Your Dairy enterprise should be “compensating” your Hay enterprise in the same way they would purchase that feed from an external vendor. Using internal transfers, you can represent this transaction as a transfer of value to get a clear picture of which enterprises are making and losing money.
Setting Up Income and Expense Accounts
Before starting a transfer, you’ll need to add internal income and expense accounts to your chart of accounts to properly represent the exchange in value. To do this, follow a few steps:
Go to Settings → Categories and click + Add in the top right corner.
Search for Internal and you’ll see two preset categories: Internal Income and Internal Cost.
Select Internal Income and rename it to whatever makes sense for your business. In the example above, the income would be for the Hay business, as it receives value from the Dairy for the “purchase” of the feed.
Similarly, select Internal Cost and rename it as you’d like. In this example, it would be an expense for the Dairy business, representing their “purchase” of the feed.
Now that you have your internal categories, you can create a transfer transaction.
Creating a Transfer
To create an internal transfer, navigate to your Ledger and hover over the + New button. Select “New internal transfer”.
Add a description (i.e. “November Hay Production”) and an amount. The Amount should represent the value that one enterprise pays the other. For example, you might want to use the price you would receive if you sold that product to someone else (“How much would I be able to sell my hay for to an external customer?”), or the price you might pay for a product of similar quality on the market.
Add the Effective Date. You might want to complete internal transfers on a monthly, quarterly, or annual basis. Make sure the Effective Date falls in that window.
Next, in the Transfer Amount From, choose the enterprise that will incur the value of the “expense” and tag the category with the Internal Cost category you created earlier. The amount will show up as negative (an expense) in this category.
In the Transfer Amount To, choose the enterprise that will receive the value of the “income” and tag the category with the Internal Income category you’ve created. The amount will show up as positive (income) in this category.
These internal transfer amounts will now appear in your enterprise-level dashboards under Analytics. When you review your categories for tax season, or export standard financial reports, these internal transfers will be excluded.