Intercompany Recharges in Xero: When One Company Pays Another's Bills (Malaysia 2026)

In most Malaysian groups, one company pays bills on behalf of the others. A management Sdn Bhd settles TNB, Air Selangor and IWK for premises each operating company occupies, or pays rent centrally. Until the cost is recharged, it sits in the wrong company's profit and loss, and the intercompany balances don't agree at year end.

Why Xero doesn't do this for you

• Each company is a separate Xero organisation, with its own ledger. Nothing in one organisation is visible to another.
• There is no built-in intercompany transaction. Xero won't raise the matching document in the other company when you pay a bill for it.
• A Xero bill has no premises field. Which building a utility bill was for usually lives in the reference, a line description, a tracking category or only on the PDF.

The manual way: two documents per recharge

1. In the paying company, raise a sales invoice to the company that owns the cost, coded to the same account the bill was booked to, so the payer's expense nets to zero.
2. In the owning company, enter a matching bill from the paying company, coded to the real expense.
3. Use the same reference on both, attach the supplier's original invoice, and settle through intercompany accounts.
4. Reconcile the intercompany balances between each pair of companies every month.

This works for a handful a month. It breaks down with dozens of premises and hundreds of utility bills, because someone has to remember each one and work out where it belongs.

Automating recharges with Bills Hub

Bills Hub, FusionETA's bill workspace for multi-company Xero groups, raises both sides of the recharge when a bill is paid:

1. You write a recharge rule once. It matches on what a Xero bill actually carries: the supplier contact, the reference, the invoice number, a line description or a tracking category, in any combination, plus which company pays and which company the cost belongs to.
2. A bill is paid in Bills Hub. That's the trigger. Bills settled directly in Xero, including all your history, don't start recharges, so connecting Bills Hub doesn't propose thousands of them.
3. Bills Hub drafts both documents: a sales invoice in the paying company addressed to the owner, and a mirror bill in the owning company. Same amount, same reference, the supplier and original reference on both, and the original bill's attachments copied onto each.
4. Each side approves its own draft in Xero. Nothing is approved for you. A draft raised in error is deleted, not credited.
5. The runs table lists every recharge with the rule that decided it and a link to each document, opening the right organisation in Xero.

Making the rules simple: name contacts after premises

The single most useful set-up step happens in Xero, not in Bills Hub. Give each supplier account its own contact named after the premises it bills, for example Tenaga Nasional Berhad - Wisma Ampang. Then one rule, "supplier is this contact", answers the whole question, with no address matching.

Where one contact covers several buildings, add a condition on the reference or a tracking category instead. Rules are tried in order and the first match wins, so a narrow rule sits above a broader one. Bills Hub won't accept a rule with no conditions, because it would recharge every paid bill to one company.

What to settle with your accountant first

• The intercompany accounts each pair of companies will use, and whether recharges carry a mark-up.
• Tax treatment. Whether a recharge is a reimbursement or a taxable supply depends on your SST registration and the arrangement between the companies. Agree it before automating.
• LHDN e-Invoicing. Intercompany invoices between related companies fall within e-Invoice requirements once each company is in scope. Plan how the paying company's invoice will be issued.

Frequently asked questions

Xero features as at November 2026. This guide is general information, not tax advice. Bills Hub is a FusionETA product.