When paying a bill, users specify a bank account to use for paying the bill. If the branch for the bank account is different than the branch associated with the accounts payable on the bill (which comes from the vendor), there is an inter branch GL entry created.
For Example: There is a $50.00 bill for a vendor who is in an Ohio Branch. A user makes a payment for the bill with a bank account that is in the Michigan Branch. The GL Entry adds inter-branch records to account for the difference between the branch paying the bill and the vendor branch:
| Debit | Credit | Branch | |
| Accounts Payable | $50 | Ohio | |
| Michigan Bank Account | $50 | Michigan | |
| Inter-Branch Due from Ohio | $50 | Michigan | |
| Inter-Branch Due to Michigan | $50 | Ohio |