How to set up intercompany invoicing
First published on September 12, 2025 , updated on November 24, 2025Intercompany Invoicing in VOGSY automates the financial settlement of hours between different internal entities. This feature is essential for organizations where employees from one company (the "Sender") work on projects owned by a different internal company (the "Receiver").
Instead of manually tracking cross-charges, VOGSY automatically generates invoices for time entries where the Employee’s Company differs from the Deliverable’s Company.
Before you begin
Before generating invoices, ensure you have access to the Back Office and that the following data is ready:
Internal companies are defined in VOGSY.
Customer profiles exist for your internal entities. Make sure you have created a "customer" record in VOGSY for each of your internal companies that will receive an intercompany invoice. This customer record will be used to ensure the correct address and invoice are sent. The VAT/GST/Sales tax on the intercompany invoice is set with this "customer".
Ledger accounts for Intercompany (IC) Revenue and Receivables are defined in your finance system.
Step 1: Enable intercompany invoicing
To activate the feature, you must configure the global financial rules.
Go to Back Office > Accounting settings.
Scroll to the Intercompany Invoicing section.
Set Enable intercompany cost rates and invoicing to Yes.
Configure the calculation logic:
Intercompany Rate Source: Choose Employee (uses the rate on the employee profile) or Activity (uses the rate on the activity master record).
Currency: Choose whether the invoice currency is determined by the Sender company or the Receiver company.
Map the Ledger Accounts:
Account receivable ledger account IC
Ledger account for IC revenue
Click Save.
Step 2: Map Customers to Internal Companies
VOGSY treats the receiving internal company as a "Customer" for the purpose of invoicing.
Go to Back Office > Companies/Departments.
Open the Company record that will receive invoices.
In the Customer field, select the corresponding customer profile for this entity.
Note: The address and contact details from this Customer profile will appear on the PDF invoice.
Step 3: Configure Activity Rates (Conditional)
Perform this step only if you selected "Activity" as your Rate Source in Step 1.
Go to Back Office > Master tables > Activities.
Open a specific Activity.
Enter the Intercompany Cost Rates for the relevant currencies. This ensures that when this activity is used across entities, the correct rate is applied.
Frequently asked questions
What happens if the Intercompany Cost Rate is 0?
The time entry will be excluded from the invoice run. The system requires a rate value greater than 0 to generate an invoice line.
How are the invoices grouped?
Time entries are grouped by Currency. If there are multiple currencies involved, separate draft invoices will be created for each currency.
Can I customize the title of the intercompany invoice document?
Yes. While the layout uses your standard invoice templates, you can configure the specific document title (e.g., changing it from "Invoice" to "Intercompany Settlement") in the Template languages settings in the Back Office, in the Master Tables section.
Does the standard "Who approves draft invoices" setting apply to intercompany invoices?
No. The general approval settings are ignored for this feature. Intercompany invoices are always routed to the manager of the internal company associated with the "Customer" (the receiving entity).
Does generating an intercompany invoice affect the billing to the external client?
No. The status of the time entry for the end customer is separate from the intercompany status. A time entry can be invoiced to the end client regardless of whether the intercompany invoice has been generated yet. VOGSY tracks the intercompany status separately using the specific "Status intercompany invoicing" field.
Can I manually add invoice lines to an intercompany invoice?
No. The "Draft invoices" function does not allow creating or manually adding lines for intercompany invoices; they are generated strictly from time entries.