In-house banking

The Embat In-house banking (IHB) module streamlines internal borrowing and lending between companies by automatically updating debt balances based on intragroup transfers and handling the associated accounting entries. It calculates daily accrued interest on outstanding balances, offers the ability to capitalise interest, and ensures accurate financial reporting with minimal manual effort.

Setting up an in-house bank relation

Learn how to set up in-house bank relations between companies including creating a relation, assigning debt balances, and configuring interest and accounting settings.

1. Click on the Add Relationship button located at the top right of the In-house banking module.
2. Set up the relationship settings: companies, currency, start date, accounting accounts, initial balances, and product alias (optional).
3. Configure the interest settings: choose whether the relationship generates interest, specify the accounting accounts for interest, and set the interest rate and settings.

Viewing debt balance and accrued interest

The In-house banking module displays relation details and debt balances, automatically calculating daily accrued interest on outstanding intragroup debt balances. This section explains where to view total accrued interest and its details.

1. Access the In-house banking module.
2. View relations and their debt balance on the Balance tab and Relation details.
3. View total accrued interest in the Balance and Interest tabs.
4. View total accrued interest and interest details in the Interest tab and Interest details.
5. Access Interest breakdown pop up.
6. View detailed pending accrued interest and capitalised interest.

Automated accounting for intragroup transfers and capitalised interest

The automated accounting feature ensures that every intragroup transaction is completed in Embat and it is directly linked to an in-house bank relation, or without direct relation but deduced through a third company, generates the required accounting entries automatically. 

1. Configure accounting initialisation for in-house bank products
2. Audit accounted intra-group transactions: after completing an intragroup transfer in Embat or capitalising accrued interest, you can audit its impact on the general ledger by navigating to the History tab in the Accounting module.
3. Audit and review: regularly review these entries to ensure accuracy. While automated accounting minimises manual entry errors, it’s still recommended to review them periodically.

Capitalising accrued interest

Managing accrued interest is essential for accurately reflecting intercompany lending activities and ensuring proper accounting treatment. This section explains how to view accrued interest and capitalise it on demand.

1. Access the In-House banking module
2. Access accrued interest breakdown from the Balance or Interest tabs, by hovering over any row and clicking the information icon in the Accrued interest column.
3. View daily accrued interest divided into Pending and History tabs
4. To capitalise interest from the date of the latest capitalisation until today, click Capitalise interest.
5. The capitalised transactions are logged in the History tab of the Accounting module.
6. Tip: Besides the Interest breakdown pop-up, you can also initiate the capitalisation process from the following sections:
   1. Balance tab: Hover over the relation row, click the three-dot icon on the right side of the page, and select Capitalise interest.
   2. Interest tab: Follow the same steps as in the previous step.
   3. Relation details (Balance tab): Hover over a relation. Click the icon in the Relation Pair A - B, and select Capitalise interest.
   4. Relation details (Interest Tab): Follow the same steps as in the previous step.

If you have any further questions, please contact the Customer Experience team or submit a request through this link.