diff --git a/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.js b/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.js
index 3521191ab6c..48b461448a7 100644
--- a/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.js
+++ b/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.js
@@ -15,6 +15,16 @@ erpnext.accounts.PurchaseInvoice = erpnext.buying.BuyingController.extend({
 				return (doc.qty<=doc.received_qty) ? "green" : "orange";
 			});
 		}
+
+		this.frm.set_query("inter_company_account", function() {
+			return {
+				filters: {
+					company: doc.company,
+					is_group: 0,
+					root_type: "Liability",
+				}
+			};
+		});
 	},
 
 	company: function() {
diff --git a/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.json b/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.json
index 8925b87b52b..369f3d0e158 100644
--- a/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.json
+++ b/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.json
@@ -126,6 +126,7 @@
   "write_off_cost_center",
   "advances_section",
   "allocate_advances_automatically",
+  "adjust_advance_taxes",
   "get_advances",
   "advances",
   "payment_schedule_section",
@@ -151,9 +152,11 @@
   "is_opening",
   "against_expense_account",
   "column_break_63",
+  "inter_company_account",
   "status",
   "inter_company_invoice_reference",
   "is_internal_supplier",
+  "represents_company",
   "remarks",
   "subscription_section",
   "from_date",
@@ -1222,7 +1225,7 @@
    "fieldtype": "Select",
    "in_standard_filter": 1,
    "label": "Status",
-   "options": "\nDraft\nReturn\nDebit Note Issued\nSubmitted\nPaid\nUnpaid\nOverdue\nCancelled",
+   "options": "\nDraft\nReturn\nDebit Note Issued\nSubmitted\nPaid\nUnpaid\nOverdue\nCancelled\nInternal Transfer",
    "print_hide": 1
   },
   {
@@ -1329,12 +1332,35 @@
    "fieldtype": "Link",
    "label": "Project",
    "options": "Project"
+  },
+  {
+   "default": "0",
+   "description": "Taxes paid while advance payment will be adjusted against this invoice",
+   "fieldname": "adjust_advance_taxes",
+   "fieldtype": "Check",
+   "label": "Adjust Advance Taxes"
+  },
+  {
+   "depends_on": "eval:doc.is_internal_supplier",
+   "fieldname": "inter_company_account",
+   "fieldtype": "Link",
+   "label": "Inter Company Account",
+   "options": "Account"
+  },
+  {
+   "depends_on": "eval:doc.is_internal_supplier",
+   "fetch_from": "supplier.represents_company",
+   "fieldname": "represents_company",
+   "fieldtype": "Link",
+   "label": "Represents Company",
+   "options": "Company"
   }
  ],
  "icon": "fa fa-file-text",
  "idx": 204,
  "is_submittable": 1,
- "modified": "2020-09-21 12:22:09.164068",
+ "links": [],
+ "modified": "2020-11-27 19:47:04.827315",
  "modified_by": "Administrator",
  "module": "Accounts",
  "name": "Purchase Invoice",
diff --git a/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.py b/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.py
index 91c4dfb5877..b4e4a7db40a 100644
--- a/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.py
+++ b/erpnext/accounts/doctype/purchase_invoice/purchase_invoice.py
@@ -102,6 +102,7 @@ class PurchaseInvoice(BuyingController):
 		self.set_status()
 		self.validate_purchase_receipt_if_update_stock()
 		validate_inter_company_party(self.doctype, self.supplier, self.company, self.inter_company_invoice_reference)
+		self.set_inter_company_account()
 
 	def validate_release_date(self):
 		if self.release_date and getdate(nowdate()) >= getdate(self.release_date):
@@ -371,6 +372,26 @@ class PurchaseInvoice(BuyingController):
 						where name=`tabPurchase Invoice Item`.parent and update_stock=1 and is_return=1)"""
 				})
 
+	def set_inter_company_account(self):
+		"""
+			Set intercompany account for inter warehouse transactions
+			This account will be used in case billing company and internal supplier's
+			representation company is same
+		"""
+
+		if self.is_internal_transfer() and not self.inter_company_account:
+			self.inter_company_account = frappe.get_cached_value('Company', self.company, 'default_inter_company_account')
+
+	def is_internal_transfer(self):
+		"""
+			It will an internal transfer if its an internal supplier and representation
+			company is same as billing company
+		"""
+		if self.is_internal_supplier and (self.represents_company == self.company):
+			return True
+
+		return False
+
 	def validate_purchase_receipt_if_update_stock(self):
 		if self.update_stock:
 			for item in self.get("items"):
@@ -444,6 +465,7 @@ class PurchaseInvoice(BuyingController):
 			self.get_asset_gl_entry(gl_entries)
 
 		self.make_tax_gl_entries(gl_entries)
+		self.make_internal_transfer_gl_entries(gl_entries)
 
 		gl_entries = make_regional_gl_entries(gl_entries, self)
 
@@ -469,211 +491,212 @@ class PurchaseInvoice(BuyingController):
 		# because rounded_total had value even before introcution of posting GLE based on rounded total
 		grand_total = self.rounded_total if (self.rounding_adjustment and self.rounded_total) else self.grand_total
 
-		if grand_total:
-			# Didnot use base_grand_total to book rounding loss gle
-			grand_total_in_company_currency = flt(grand_total * self.conversion_rate,
-				self.precision("grand_total"))
-			gl_entries.append(
-				self.get_gl_dict({
-					"account": self.credit_to,
-					"party_type": "Supplier",
-					"party": self.supplier,
-					"due_date": self.due_date,
-					"against": self.against_expense_account,
-					"credit": grand_total_in_company_currency,
-					"credit_in_account_currency": grand_total_in_company_currency \
-						if self.party_account_currency==self.company_currency else grand_total,
-					"against_voucher": self.return_against if cint(self.is_return) and self.return_against else self.name,
-					"against_voucher_type": self.doctype,
-					"project": self.project,
-					"cost_center": self.cost_center
-				}, self.party_account_currency, item=self)
-			)
+		if grand_total and not self.is_internal_transfer():
+				# Didnot use base_grand_total to book rounding loss gle
+				grand_total_in_company_currency = flt(grand_total * self.conversion_rate,
+					self.precision("grand_total"))
+				gl_entries.append(
+					self.get_gl_dict({
+						"account": self.credit_to,
+						"party_type": "Supplier",
+						"party": self.supplier,
+						"due_date": self.due_date,
+						"against": self.against_expense_account,
+						"credit": grand_total_in_company_currency,
+						"credit_in_account_currency": grand_total_in_company_currency \
+							if self.party_account_currency==self.company_currency else grand_total,
+						"against_voucher": self.return_against if cint(self.is_return) and self.return_against else self.name,
+						"against_voucher_type": self.doctype,
+						"project": self.project,
+						"cost_center": self.cost_center
+					}, self.party_account_currency, item=self)
+				)
 
 	def make_item_gl_entries(self, gl_entries):
 		# item gl entries
-		stock_items = self.get_stock_items()
-		expenses_included_in_valuation = self.get_company_default("expenses_included_in_valuation")
-		if self.update_stock and self.auto_accounting_for_stock:
-			warehouse_account = get_warehouse_account_map(self.company)
+		if not self.is_internal_transfer():
+			stock_items = self.get_stock_items()
+			expenses_included_in_valuation = self.get_company_default("expenses_included_in_valuation")
+			if self.update_stock and self.auto_accounting_for_stock:
+				warehouse_account = get_warehouse_account_map(self.company)
 
-		landed_cost_entries = get_item_account_wise_additional_cost(self.name)
+			landed_cost_entries = get_item_account_wise_additional_cost(self.name)
 
-		voucher_wise_stock_value = {}
-		if self.update_stock:
-			for d in frappe.get_all('Stock Ledger Entry',
-				fields = ["voucher_detail_no", "stock_value_difference"], filters={'voucher_no': self.name}):
-				voucher_wise_stock_value.setdefault(d.voucher_detail_no, d.stock_value_difference)
+			voucher_wise_stock_value = {}
+			if self.update_stock:
+				for d in frappe.get_all('Stock Ledger Entry',
+					fields = ["voucher_detail_no", "stock_value_difference"], filters={'voucher_no': self.name}):
+					voucher_wise_stock_value.setdefault(d.voucher_detail_no, d.stock_value_difference)
 
-		valuation_tax_accounts = [d.account_head for d in self.get("taxes")
-			if d.category in ('Valuation', 'Total and Valuation')
-			and flt(d.base_tax_amount_after_discount_amount)]
+			valuation_tax_accounts = [d.account_head for d in self.get("taxes")
+				if d.category in ('Valuation', 'Total and Valuation')
+				and flt(d.base_tax_amount_after_discount_amount)]
 
-		for item in self.get("items"):
-			if flt(item.base_net_amount):
-				account_currency = get_account_currency(item.expense_account)
-				if item.item_code:
-					asset_category = frappe.get_cached_value("Item", item.item_code, "asset_category")
+			for item in self.get("items"):
+				if flt(item.base_net_amount):
+					account_currency = get_account_currency(item.expense_account)
+					if item.item_code:
+						asset_category = frappe.get_cached_value("Item", item.item_code, "asset_category")
 
-				if self.update_stock and self.auto_accounting_for_stock and item.item_code in stock_items:
-					# warehouse account
-					warehouse_debit_amount = self.make_stock_adjustment_entry(gl_entries,
-						item, voucher_wise_stock_value, account_currency)
+					if self.update_stock and self.auto_accounting_for_stock and item.item_code in stock_items:
+						# warehouse account
+						warehouse_debit_amount = self.make_stock_adjustment_entry(gl_entries,
+							item, voucher_wise_stock_value, account_currency)
 
-					if item.from_warehouse:
+						if item.from_warehouse:
 
-						gl_entries.append(self.get_gl_dict({
-							"account":  warehouse_account[item.warehouse]['account'],
-							"against": warehouse_account[item.from_warehouse]["account"],
-							"cost_center": item.cost_center,
-							"project": item.project or self.project,
-							"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
-							"debit": warehouse_debit_amount,
-						}, warehouse_account[item.warehouse]["account_currency"], item=item))
-
-						# Intentionally passed negative debit amount to avoid incorrect GL Entry validation
-						gl_entries.append(self.get_gl_dict({
-							"account":  warehouse_account[item.from_warehouse]['account'],
-							"against": warehouse_account[item.warehouse]["account"],
-							"cost_center": item.cost_center,
-							"project": item.project or self.project,
-							"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
-							"debit": -1 * flt(item.base_net_amount, item.precision("base_net_amount")),
-						}, warehouse_account[item.from_warehouse]["account_currency"], item=item))
-
-						gl_entries.append(
-							self.get_gl_dict({
-								"account": item.expense_account,
-								"against": self.supplier,
-								"debit": flt(item.base_net_amount, item.precision("base_net_amount")),
-								"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
-								"cost_center": item.cost_center,
-								"project": item.project
-							}, account_currency, item=item)
-						)
-
-					else:
-						gl_entries.append(
-							self.get_gl_dict({
-								"account": item.expense_account,
-								"against": self.supplier,
-								"debit": warehouse_debit_amount,
-								"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
-								"cost_center": item.cost_center,
-								"project": item.project or self.project
-							}, account_currency, item=item)
-						)
-
-					# Amount added through landed-cost-voucher
-					if landed_cost_entries:
-						for account, amount in iteritems(landed_cost_entries[(item.item_code, item.name)]):
 							gl_entries.append(self.get_gl_dict({
-								"account": account,
+								"account":  warehouse_account[item.warehouse]['account'],
+								"against": warehouse_account[item.from_warehouse]["account"],
+								"cost_center": item.cost_center,
+								"project": item.project or self.project,
+								"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
+								"debit": warehouse_debit_amount,
+							}, warehouse_account[item.warehouse]["account_currency"], item=item))
+
+							# Intentionally passed negative debit amount to avoid incorrect GL Entry validation
+							gl_entries.append(self.get_gl_dict({
+								"account":  warehouse_account[item.from_warehouse]['account'],
+								"against": warehouse_account[item.warehouse]["account"],
+								"cost_center": item.cost_center,
+								"project": item.project or self.project,
+								"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
+								"debit": -1 * flt(item.base_net_amount, item.precision("base_net_amount")),
+							}, warehouse_account[item.from_warehouse]["account_currency"], item=item))
+
+							gl_entries.append(
+								self.get_gl_dict({
+									"account": item.expense_account,
+									"against": self.supplier,
+									"debit": flt(item.base_net_amount, item.precision("base_net_amount")),
+									"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
+									"cost_center": item.cost_center,
+									"project": item.project
+								}, account_currency, item=item)
+							)
+
+						else:
+							gl_entries.append(
+								self.get_gl_dict({
+									"account": item.expense_account,
+									"against": self.supplier,
+									"debit": warehouse_debit_amount,
+									"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
+									"cost_center": item.cost_center,
+									"project": item.project or self.project
+								}, account_currency, item=item)
+							)
+
+						# Amount added through landed-cost-voucher
+						if landed_cost_entries:
+							for account, amount in iteritems(landed_cost_entries[(item.item_code, item.name)]):
+								gl_entries.append(self.get_gl_dict({
+									"account": account,
+									"against": item.expense_account,
+									"cost_center": item.cost_center,
+									"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
+									"credit": flt(amount),
+									"project": item.project or self.project
+								}, item=item))
+
+						# sub-contracting warehouse
+						if flt(item.rm_supp_cost):
+							supplier_warehouse_account = warehouse_account[self.supplier_warehouse]["account"]
+							if not supplier_warehouse_account:
+								frappe.throw(_("Please set account in Warehouse {0}")
+									.format(self.supplier_warehouse))
+							gl_entries.append(self.get_gl_dict({
+								"account": supplier_warehouse_account,
 								"against": item.expense_account,
 								"cost_center": item.cost_center,
+								"project": item.project or self.project,
 								"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
-								"credit": flt(amount),
+								"credit": flt(item.rm_supp_cost)
+							}, warehouse_account[self.supplier_warehouse]["account_currency"], item=item))
+
+					elif not item.is_fixed_asset or (item.is_fixed_asset and not is_cwip_accounting_enabled(asset_category)):
+						expense_account = (item.expense_account
+							if (not item.enable_deferred_expense or self.is_return) else item.deferred_expense_account)
+
+						if not item.is_fixed_asset:
+							amount = flt(item.base_net_amount, item.precision("base_net_amount"))
+						else:
+							amount = flt(item.base_net_amount + item.item_tax_amount, item.precision("base_net_amount"))
+
+						auto_accounting_for_non_stock_items = cint(frappe.db.get_value('Company', self.company, 'enable_perpetual_inventory_for_non_stock_items'))
+
+						if auto_accounting_for_non_stock_items:
+							service_received_but_not_billed_account = self.get_company_default("service_received_but_not_billed")
+
+							if item.purchase_receipt:
+								# Post reverse entry for Stock-Received-But-Not-Billed if it is booked in Purchase Receipt
+								expense_booked_in_pr = frappe.db.get_value('GL Entry', {'is_cancelled': 0,
+									'voucher_type': 'Purchase Receipt', 'voucher_no': item.purchase_receipt, 'voucher_detail_no': item.pr_detail,
+									'account':service_received_but_not_billed_account}, ['name'])
+
+								if expense_booked_in_pr:
+									expense_account = service_received_but_not_billed_account
+
+						gl_entries.append(self.get_gl_dict({
+								"account": expense_account,
+								"against": self.supplier,
+								"debit": amount,
+								"cost_center": item.cost_center,
+								"project": item.project or self.project
+							}, account_currency, item=item))
+
+						# If asset is bought through this document and not linked to PR
+						if self.update_stock and item.landed_cost_voucher_amount:
+							expenses_included_in_asset_valuation = self.get_company_default("expenses_included_in_asset_valuation")
+							# Amount added through landed-cost-voucher
+							gl_entries.append(self.get_gl_dict({
+								"account": expenses_included_in_asset_valuation,
+								"against": expense_account,
+								"cost_center": item.cost_center,
+								"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
+								"credit": flt(item.landed_cost_voucher_amount),
 								"project": item.project or self.project
 							}, item=item))
 
-					# sub-contracting warehouse
-					if flt(item.rm_supp_cost):
-						supplier_warehouse_account = warehouse_account[self.supplier_warehouse]["account"]
-						if not supplier_warehouse_account:
-							frappe.throw(_("Please set account in Warehouse {0}")
-								.format(self.supplier_warehouse))
-						gl_entries.append(self.get_gl_dict({
-							"account": supplier_warehouse_account,
-							"against": item.expense_account,
-							"cost_center": item.cost_center,
-							"project": item.project or self.project,
-							"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
-							"credit": flt(item.rm_supp_cost)
-						}, warehouse_account[self.supplier_warehouse]["account_currency"], item=item))
+							gl_entries.append(self.get_gl_dict({
+								"account": expense_account,
+								"against": expenses_included_in_asset_valuation,
+								"cost_center": item.cost_center,
+								"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
+								"debit": flt(item.landed_cost_voucher_amount),
+								"project": item.project or self.project
+							}, item=item))
 
-				elif not item.is_fixed_asset or (item.is_fixed_asset and not is_cwip_accounting_enabled(asset_category)):
-					expense_account = (item.expense_account
-						if (not item.enable_deferred_expense or self.is_return) else item.deferred_expense_account)
-
-					if not item.is_fixed_asset:
-						amount = flt(item.base_net_amount, item.precision("base_net_amount"))
-					else:
-						amount = flt(item.base_net_amount + item.item_tax_amount, item.precision("base_net_amount"))
-
-					auto_accounting_for_non_stock_items = cint(frappe.db.get_value('Company', self.company, 'enable_perpetual_inventory_for_non_stock_items'))
-
-					if auto_accounting_for_non_stock_items:
-						service_received_but_not_billed_account = self.get_company_default("service_received_but_not_billed")
-
-						if item.purchase_receipt:
-							# Post reverse entry for Stock-Received-But-Not-Billed if it is booked in Purchase Receipt
-							expense_booked_in_pr = frappe.db.get_value('GL Entry', {'is_cancelled': 0,
-								'voucher_type': 'Purchase Receipt', 'voucher_no': item.purchase_receipt, 'voucher_detail_no': item.pr_detail,
-								'account':service_received_but_not_billed_account}, ['name'])
-
-							if expense_booked_in_pr:
-								expense_account = service_received_but_not_billed_account
-
-					gl_entries.append(self.get_gl_dict({
-							"account": expense_account,
-							"against": self.supplier,
-							"debit": amount,
-							"cost_center": item.cost_center,
-							"project": item.project or self.project
-						}, account_currency, item=item))
-
-					# If asset is bought through this document and not linked to PR
-					if self.update_stock and item.landed_cost_voucher_amount:
-						expenses_included_in_asset_valuation = self.get_company_default("expenses_included_in_asset_valuation")
-						# Amount added through landed-cost-voucher
-						gl_entries.append(self.get_gl_dict({
-							"account": expenses_included_in_asset_valuation,
-							"against": expense_account,
-							"cost_center": item.cost_center,
-							"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
-							"credit": flt(item.landed_cost_voucher_amount),
-							"project": item.project or self.project
-						}, item=item))
-
-						gl_entries.append(self.get_gl_dict({
-							"account": expense_account,
-							"against": expenses_included_in_asset_valuation,
-							"cost_center": item.cost_center,
-							"remarks": self.get("remarks") or _("Accounting Entry for Stock"),
-							"debit": flt(item.landed_cost_voucher_amount),
-							"project": item.project or self.project
-						}, item=item))
-
-						# update gross amount of asset bought through this document
-						assets = frappe.db.get_all('Asset',
-							filters={ 'purchase_invoice': self.name, 'item_code': item.item_code }
-						)
-						for asset in assets:
-							frappe.db.set_value("Asset", asset.name, "gross_purchase_amount", flt(item.valuation_rate))
-							frappe.db.set_value("Asset", asset.name, "purchase_receipt_amount", flt(item.valuation_rate))
-
-			if self.auto_accounting_for_stock and self.is_opening == "No" and \
-				item.item_code in stock_items and item.item_tax_amount:
-					# Post reverse entry for Stock-Received-But-Not-Billed if it is booked in Purchase Receipt
-					if item.purchase_receipt and valuation_tax_accounts:
-						negative_expense_booked_in_pr = frappe.db.sql("""select name from `tabGL Entry`
-							where voucher_type='Purchase Receipt' and voucher_no=%s and account in %s""",
-							(item.purchase_receipt, valuation_tax_accounts))
-
-						if not negative_expense_booked_in_pr:
-							gl_entries.append(
-								self.get_gl_dict({
-									"account": self.stock_received_but_not_billed,
-									"against": self.supplier,
-									"debit": flt(item.item_tax_amount, item.precision("item_tax_amount")),
-									"remarks": self.remarks or "Accounting Entry for Stock",
-									"cost_center": self.cost_center,
-									"project": item.project or self.project
-								}, item=item)
+							# update gross amount of asset bought through this document
+							assets = frappe.db.get_all('Asset',
+								filters={ 'purchase_invoice': self.name, 'item_code': item.item_code }
 							)
+							for asset in assets:
+								frappe.db.set_value("Asset", asset.name, "gross_purchase_amount", flt(item.valuation_rate))
+								frappe.db.set_value("Asset", asset.name, "purchase_receipt_amount", flt(item.valuation_rate))
 
-							self.negative_expense_to_be_booked += flt(item.item_tax_amount, \
-								item.precision("item_tax_amount"))
+				if self.auto_accounting_for_stock and self.is_opening == "No" and \
+					item.item_code in stock_items and item.item_tax_amount:
+						# Post reverse entry for Stock-Received-But-Not-Billed if it is booked in Purchase Receipt
+						if item.purchase_receipt and valuation_tax_accounts:
+							negative_expense_booked_in_pr = frappe.db.sql("""select name from `tabGL Entry`
+								where voucher_type='Purchase Receipt' and voucher_no=%s and account in %s""",
+								(item.purchase_receipt, valuation_tax_accounts))
+
+							if not negative_expense_booked_in_pr:
+								gl_entries.append(
+									self.get_gl_dict({
+										"account": self.stock_received_but_not_billed,
+										"against": self.supplier,
+										"debit": flt(item.item_tax_amount, item.precision("item_tax_amount")),
+										"remarks": self.remarks or "Accounting Entry for Stock",
+										"cost_center": self.cost_center,
+										"project": item.project or self.project
+									}, item=item)
+								)
+
+								self.negative_expense_to_be_booked += flt(item.item_tax_amount, \
+									item.precision("item_tax_amount"))
 
 	def get_asset_gl_entry(self, gl_entries):
 		arbnb_account = self.get_company_default("asset_received_but_not_billed")
@@ -827,7 +850,8 @@ class PurchaseInvoice(BuyingController):
 					}, account_currency, item=tax)
 				)
 			# accumulate valuation tax
-			if self.is_opening == "No" and tax.category in ("Valuation", "Valuation and Total") and flt(tax.base_tax_amount_after_discount_amount):
+			if self.is_opening == "No" and tax.category in ("Valuation", "Valuation and Total") and flt(tax.base_tax_amount_after_discount_amount) \
+				and not self.is_internal_transfer():
 				if self.auto_accounting_for_stock and not tax.cost_center:
 					frappe.throw(_("Cost Center is required in row {0} in Taxes table for type {1}").format(tax.idx, _(tax.category)))
 				valuation_tax.setdefault(tax.name, 0)
@@ -871,8 +895,19 @@ class PurchaseInvoice(BuyingController):
 							"against": self.supplier,
 							"credit": valuation_tax[tax.name],
 							"remarks": self.remarks or "Accounting Entry for Stock"
-						}, item=tax)
-					)
+						}, item=tax))
+
+	def make_internal_transfer_gl_entries(self, gl_entries):
+		if self.is_internal_transfer() and flt(self.base_total_taxes_and_charges):
+			account_currency = get_account_currency(self.inter_company_account)
+			gl_entries.append(
+				self.get_gl_dict({
+					"account": self.inter_company_account,
+					"against": self.supplier,
+					"credit": flt(self.total_taxes_and_charges),
+					"credit_in_account_currency": flt(self.base_total_taxes_and_charges),
+					"cost_center": self.cost_center
+				}, account_currency, item=self))
 
 	def make_payment_gl_entries(self, gl_entries):
 		# Make Cash GL Entries
@@ -1088,7 +1123,9 @@ class PurchaseInvoice(BuyingController):
 			if self.docstatus == 2:
 				status = "Cancelled"
 			elif self.docstatus == 1:
-				if outstanding_amount > 0 and due_date < nowdate:
+				if self.is_internal_transfer():
+					self.status = 'Internal Transfer'
+				elif outstanding_amount > 0 and due_date < nowdate:
 					self.status = "Overdue"
 				elif outstanding_amount > 0 and due_date >= nowdate:
 					self.status = "Unpaid"
diff --git a/erpnext/accounts/doctype/purchase_invoice/purchase_invoice_list.js b/erpnext/accounts/doctype/purchase_invoice/purchase_invoice_list.js
index 86c2e408c0b..f942fc53b00 100644
--- a/erpnext/accounts/doctype/purchase_invoice/purchase_invoice_list.js
+++ b/erpnext/accounts/doctype/purchase_invoice/purchase_invoice_list.js
@@ -4,7 +4,7 @@
 // render
 frappe.listview_settings['Purchase Invoice'] = {
 	add_fields: ["supplier", "supplier_name", "base_grand_total", "outstanding_amount", "due_date", "company",
-		"currency", "is_return", "release_date", "on_hold"],
+		"currency", "is_return", "release_date", "on_hold", "represents_company", "is_internal_supplier"],
 	get_indicator: function(doc) {
 		if( (flt(doc.outstanding_amount) <= 0) && doc.docstatus == 1 &&  doc.status == 'Debit Note Issued') {
 			return [__("Debit Note Issued"), "darkgrey", "outstanding_amount,<=,0"];
@@ -20,6 +20,8 @@ frappe.listview_settings['Purchase Invoice'] = {
 			}
 		} else if(cint(doc.is_return)) {
 			return [__("Return"), "darkgrey", "is_return,=,Yes"];
+		} else if(doc.company == doc.represents_company && doc.is_internal_supplier) {
+			return [__("Internal Transfer"), "darkgrey", "outstanding_amount,=,0"];
 		} else if(flt(doc.outstanding_amount)==0 && doc.docstatus==1) {
 			return [__("Paid"), "green", "outstanding_amount,=,0"];
 		}
diff --git a/erpnext/accounts/doctype/sales_invoice/sales_invoice.js b/erpnext/accounts/doctype/sales_invoice/sales_invoice.js
index 26e5ecdfb2d..056928e21e3 100644
--- a/erpnext/accounts/doctype/sales_invoice/sales_invoice.js
+++ b/erpnext/accounts/doctype/sales_invoice/sales_invoice.js
@@ -575,6 +575,25 @@ frappe.ui.form.on('Sales Invoice', {
 			};
 		});
 
+		frm.set_query("cost_center", function() {
+			return {
+				filters: {
+					company: frm.doc.company,
+					is_group: 0
+				}
+			};
+		});
+
+		frm.set_query("inter_company_account", function() {
+			return {
+				filters: {
+					company: frm.doc.company,
+					is_group: 0,
+					root_type: "Liability",
+				}
+			};
+		});
+
 		frm.custom_make_buttons = {
 			'Delivery Note': 'Delivery',
 			'Sales Invoice': 'Sales Return',
@@ -1075,7 +1094,7 @@ var get_drugs_to_invoice = function(frm) {
 				description:'Quantity will be calculated only for items which has "Nos" as UoM. You may change as required for each invoice item.',
 				get_query: function(doc) {
 					return {
-						filters: { 
+						filters: {
 							patient: dialog.get_value("patient"),
 							company: frm.doc.company,
 							docstatus: 1
diff --git a/erpnext/accounts/doctype/sales_invoice/sales_invoice.json b/erpnext/accounts/doctype/sales_invoice/sales_invoice.json
index ae401538907..7d2c4a67125 100644
--- a/erpnext/accounts/doctype/sales_invoice/sales_invoice.json
+++ b/erpnext/accounts/doctype/sales_invoice/sales_invoice.json
@@ -157,6 +157,7 @@
   "more_information",
   "inter_company_invoice_reference",
   "is_internal_customer",
+  "represents_company",
   "customer_group",
   "campaign",
   "is_discounted",
@@ -170,6 +171,7 @@
   "c_form_applicable",
   "c_form_no",
   "column_break8",
+  "inter_company_account",
   "remarks",
   "sales_team_section_break",
   "sales_partner",
@@ -1654,7 +1656,7 @@
    "in_standard_filter": 1,
    "label": "Status",
    "no_copy": 1,
-   "options": "\nDraft\nReturn\nCredit Note Issued\nSubmitted\nPaid\nUnpaid\nUnpaid and Discounted\nOverdue and Discounted\nOverdue\nCancelled",
+   "options": "\nDraft\nReturn\nCredit Note Issued\nSubmitted\nPaid\nUnpaid\nUnpaid and Discounted\nOverdue and Discounted\nOverdue\nCancelled\nInternal Transfer",
    "print_hide": 1,
    "read_only": 1
   },
@@ -1949,13 +1951,29 @@
    "fieldtype": "Data",
    "label": "Company Tax ID",
    "read_only": 1
+  },
+  {
+   "depends_on": "eval:doc.is_internal_customer",
+   "fieldname": "inter_company_account",
+   "fieldtype": "Link",
+   "label": "Inter Company Account",
+   "options": "Account"
+  },
+  {
+   "depends_on": "eval:doc.is_internal_customer",
+   "fetch_from": "cusstomer.represents_company",
+   "fieldname": "represents_company",
+   "fieldtype": "Link",
+   "label": "Represents Company",
+   "options": "Company",
+   "read_only": 1
   }
  ],
  "icon": "fa fa-file-text",
  "idx": 181,
  "is_submittable": 1,
  "links": [],
- "modified": "2020-10-09 15:59:57.544736",
+ "modified": "2020-11-27 18:48:15.012300",
  "modified_by": "Administrator",
  "module": "Accounts",
  "name": "Sales Invoice",
diff --git a/erpnext/accounts/doctype/sales_invoice/sales_invoice.py b/erpnext/accounts/doctype/sales_invoice/sales_invoice.py
index 14828bd1fa1..8b912d04c31 100644
--- a/erpnext/accounts/doctype/sales_invoice/sales_invoice.py
+++ b/erpnext/accounts/doctype/sales_invoice/sales_invoice.py
@@ -89,6 +89,7 @@ class SalesInvoice(SellingController):
 		self.set_income_account_for_fixed_assets()
 		self.validate_item_cost_centers()
 		validate_inter_company_party(self.doctype, self.customer, self.company, self.inter_company_invoice_reference)
+		self.set_inter_company_account()
 
 		if cint(self.is_pos):
 			self.validate_pos()
@@ -570,6 +571,26 @@ class SalesInvoice(SellingController):
 			if not res:
 				throw(_("Customer {0} does not belong to project {1}").format(self.customer,self.project))
 
+	def set_inter_company_account(self):
+		"""
+			Set intercompany account for inter warehouse transactions
+			This account will be used in case billing company and internal customer's
+			representation company is same
+		"""
+
+		if self.is_internal_transfer() and not self.inter_company_account:
+			self.inter_company_account = frappe.get_cached_value('Company', self.company, 'default_inter_company_account')
+
+	def is_internal_transfer(self):
+		"""
+			It will an internal transfer if its an internal customer and representation
+			company is same as billing company
+		"""
+		if self.is_internal_customer and (self.represents_company == self.company):
+			return True
+
+		return False
+
 	def validate_pos(self):
 		if self.is_return:
 			invoice_total = self.rounded_total or self.grand_total
@@ -751,6 +772,7 @@ class SalesInvoice(SellingController):
 		self.make_customer_gl_entry(gl_entries)
 
 		self.make_tax_gl_entries(gl_entries)
+		self.make_internal_transfer_gl_entries(gl_entries)
 
 		self.make_item_gl_entries(gl_entries)
 
@@ -770,7 +792,7 @@ class SalesInvoice(SellingController):
 		# Checked both rounding_adjustment and rounded_total
 		# because rounded_total had value even before introcution of posting GLE based on rounded total
 		grand_total = self.rounded_total if (self.rounding_adjustment and self.rounded_total) else self.grand_total
-		if grand_total:
+		if grand_total and not self.is_internal_transfer():
 			# Didnot use base_grand_total to book rounding loss gle
 			grand_total_in_company_currency = flt(grand_total * self.conversion_rate,
 				self.precision("grand_total"))
@@ -809,44 +831,57 @@ class SalesInvoice(SellingController):
 					}, account_currency, item=tax)
 				)
 
+	def make_internal_transfer_gl_entries(self, gl_entries):
+		if self.is_internal_transfer() and flt(self.base_total_taxes_and_charges):
+			account_currency = get_account_currency(self.inter_company_account)
+			gl_entries.append(
+				self.get_gl_dict({
+					"account": self.inter_company_account,
+					"against": self.customer,
+					"debit": flt(self.total_taxes_and_charges),
+					"debit_in_account_currency": flt(self.base_total_taxes_and_charges),
+					"cost_center": self.cost_center
+				}, account_currency, item=self))
+
 	def make_item_gl_entries(self, gl_entries):
 		# income account gl entries
-		for item in self.get("items"):
-			if flt(item.base_net_amount, item.precision("base_net_amount")):
-				if item.is_fixed_asset:
-					asset = frappe.get_doc("Asset", item.asset)
+		if not self.is_internal_transfer():
+			for item in self.get("items"):
+				if flt(item.base_net_amount, item.precision("base_net_amount")):
+					if item.is_fixed_asset:
+						asset = frappe.get_doc("Asset", item.asset)
 
-					if (len(asset.finance_books) > 1 and not item.finance_book
-						and asset.finance_books[0].finance_book):
-						frappe.throw(_("Select finance book for the item {0} at row {1}")
-							.format(item.item_code, item.idx))
+						if (len(asset.finance_books) > 1 and not item.finance_book
+							and asset.finance_books[0].finance_book):
+							frappe.throw(_("Select finance book for the item {0} at row {1}")
+								.format(item.item_code, item.idx))
 
-					fixed_asset_gl_entries = get_gl_entries_on_asset_disposal(asset,
-						item.base_net_amount, item.finance_book)
+						fixed_asset_gl_entries = get_gl_entries_on_asset_disposal(asset,
+							item.base_net_amount, item.finance_book)
 
-					for gle in fixed_asset_gl_entries:
-						gle["against"] = self.customer
-						gl_entries.append(self.get_gl_dict(gle, item=item))
+						for gle in fixed_asset_gl_entries:
+							gle["against"] = self.customer
+							gl_entries.append(self.get_gl_dict(gle, item=item))
 
-					asset.db_set("disposal_date", self.posting_date)
-					asset.set_status("Sold" if self.docstatus==1 else None)
-				else:
-					income_account = (item.income_account
-						if (not item.enable_deferred_revenue or self.is_return) else item.deferred_revenue_account)
+						asset.db_set("disposal_date", self.posting_date)
+						asset.set_status("Sold" if self.docstatus==1 else None)
+					else:
+						income_account = (item.income_account
+							if (not item.enable_deferred_revenue or self.is_return) else item.deferred_revenue_account)
 
-					account_currency = get_account_currency(income_account)
-					gl_entries.append(
-						self.get_gl_dict({
-							"account": income_account,
-							"against": self.customer,
-							"credit": flt(item.base_net_amount, item.precision("base_net_amount")),
-							"credit_in_account_currency": (flt(item.base_net_amount, item.precision("base_net_amount"))
-								if account_currency==self.company_currency
-								else flt(item.net_amount, item.precision("net_amount"))),
-							"cost_center": item.cost_center,
-							"project": item.project or self.project
-						}, account_currency, item=item)
-					)
+						account_currency = get_account_currency(income_account)
+						gl_entries.append(
+							self.get_gl_dict({
+								"account": income_account,
+								"against": self.customer,
+								"credit": flt(item.base_net_amount, item.precision("base_net_amount")),
+								"credit_in_account_currency": (flt(item.base_net_amount, item.precision("base_net_amount"))
+									if account_currency==self.company_currency
+									else flt(item.net_amount, item.precision("net_amount"))),
+								"cost_center": item.cost_center,
+								"project": item.project or self.project
+							}, account_currency, item=item)
+						)
 
 		# expense account gl entries
 		if cint(self.update_stock) and \
@@ -1258,7 +1293,9 @@ class SalesInvoice(SellingController):
 			if self.docstatus == 2:
 				status = "Cancelled"
 			elif self.docstatus == 1:
-				if outstanding_amount > 0 and due_date < nowdate and self.is_discounted and discountng_status=='Disbursed':
+				if self.is_internal_transfer():
+					self.status = 'Internal Transfer'
+				elif outstanding_amount > 0 and due_date < nowdate and self.is_discounted and discountng_status=='Disbursed':
 					self.status = "Overdue and Discounted"
 				elif outstanding_amount > 0 and due_date < nowdate:
 					self.status = "Overdue"
@@ -1522,9 +1559,13 @@ def make_inter_company_transaction(doctype, source_name, target_doc=None):
 	if doctype in ["Sales Invoice", "Sales Order"]:
 		source_doc = frappe.get_doc(doctype, source_name)
 		target_doctype = "Purchase Invoice" if doctype == "Sales Invoice" else "Purchase Order"
+		source_document_warehouse_field = 'target_warehouse'
+		target_document_warehouse_field = 'from_warehouse'
 	else:
 		source_doc = frappe.get_doc(doctype, source_name)
 		target_doctype = "Sales Invoice" if doctype == "Purchase Invoice" else "Sales Order"
+		source_document_warehouse_field = 'from_warehouse'
+		target_document_warehouse_field = 'target_warehouse'
 
 	validate_inter_company_transaction(source_doc, doctype)
 	details = get_inter_company_details(source_doc, doctype)
@@ -1551,6 +1592,24 @@ def make_inter_company_transaction(doctype, source_name, target_doc=None):
 			if currency:
 				target_doc.currency = currency
 
+	item_field_map = {
+		"doctype": target_doctype + " Item",
+		"field_no_map": [
+			"income_account",
+			"expense_account",
+			"cost_center",
+			"warehouse"
+		]
+	}
+
+	if source_doc.get('update_stock'):
+		item_field_map.update({
+			'field_map': {
+				source_document_warehouse_field: target_document_warehouse_field
+			}
+		})
+
+
 	doclist = get_mapped_doc(doctype, source_name,	{
 		doctype: {
 			"doctype": target_doctype,
@@ -1559,15 +1618,7 @@ def make_inter_company_transaction(doctype, source_name, target_doc=None):
 				"taxes_and_charges"
 			]
 		},
-		doctype +" Item": {
-			"doctype": target_doctype + " Item",
-			"field_no_map": [
-				"income_account",
-				"expense_account",
-				"cost_center",
-				"warehouse"
-			]
-		}
+		doctype +" Item": item_field_map
 
 	}, target_doc, set_missing_values)
 
diff --git a/erpnext/accounts/doctype/sales_invoice/sales_invoice_list.js b/erpnext/accounts/doctype/sales_invoice/sales_invoice_list.js
index 05d49df711a..41140d19388 100644
--- a/erpnext/accounts/doctype/sales_invoice/sales_invoice_list.js
+++ b/erpnext/accounts/doctype/sales_invoice/sales_invoice_list.js
@@ -14,8 +14,8 @@ frappe.listview_settings['Sales Invoice'] = {
 			"Credit Note Issued": "darkgrey",
 			"Unpaid and Discounted": "orange",
 			"Overdue and Discounted": "red",
-			"Overdue": "red"
-
+			"Overdue": "red",
+			"Internal Transfer": "darkgrey"
 		};
 		return [__(doc.status), status_color[doc.status], "status,=,"+doc.status];
 	},
diff --git a/erpnext/controllers/stock_controller.py b/erpnext/controllers/stock_controller.py
index 2d2fff8fd54..346f7539918 100644
--- a/erpnext/controllers/stock_controller.py
+++ b/erpnext/controllers/stock_controller.py
@@ -77,7 +77,7 @@ class StockController(AccountsController):
 			if sle_list:
 				for sle in sle_list:
 					if warehouse_account.get(sle.warehouse):
-						# from warehouse account/ target warehouse account
+						# from warehouse account
 
 						self.check_expense_account(item_row)
 
@@ -102,9 +102,14 @@ class StockController(AccountsController):
 							"is_opening": item_row.get("is_opening") or self.get("is_opening") or "No",
 						}, warehouse_account[sle.warehouse]["account_currency"], item=item_row))
 
-						# expense account
+						# expense account/ target_warehouse / source_warehouse
+						if item_row.target_warehouse:
+							expense_account = warehouse_account[item_row.target_warehouse]["account"]
+						else:
+							expense_account = item_row.expense_account
+
 						gl_list.append(self.get_gl_dict({
-							"account": item_row.expense_account,
+							"account": expense_account,
 							"against": warehouse_account[sle.warehouse]["account"],
 							"cost_center": item_row.cost_center,
 							"project": item_row.project or self.get('project'),
diff --git a/erpnext/controllers/taxes_and_totals.py b/erpnext/controllers/taxes_and_totals.py
index 81d07c1327e..5f3fe89bfb8 100644
--- a/erpnext/controllers/taxes_and_totals.py
+++ b/erpnext/controllers/taxes_and_totals.py
@@ -519,6 +519,17 @@ class calculate_taxes_and_totals(object):
 			if self.doc.docstatus == 0:
 				self.calculate_outstanding_amount()
 
+	def is_internal_invoice(self):
+		"""
+			Checks if its an internal transfer invoice
+			and decides if to calculate any out standing amount or not
+		"""
+
+		if self.doc.doctype in ('Sales Invoice', 'Purchase Invoice') and self.doc.is_internal_transfer():
+			return True
+
+		return False
+
 	def calculate_outstanding_amount(self):
 		# NOTE:
 		# write_off_amount is only for POS Invoice
@@ -526,7 +537,8 @@ class calculate_taxes_and_totals(object):
 		if self.doc.doctype == "Sales Invoice":
 			self.calculate_paid_amount()
 
-		if self.doc.is_return and self.doc.return_against and not self.doc.get('is_pos'): return
+		if self.doc.is_return and self.doc.return_against and not self.doc.get('is_pos') or \
+			self.is_internal_invoice(): return
 
 		self.doc.round_floats_in(self.doc, ["grand_total", "total_advance", "write_off_amount"])
 		self._set_in_company_currency(self.doc, ['write_off_amount'])
diff --git a/erpnext/public/js/controllers/taxes_and_totals.js b/erpnext/public/js/controllers/taxes_and_totals.js
index 99f3995a662..29f30763ec1 100644
--- a/erpnext/public/js/controllers/taxes_and_totals.js
+++ b/erpnext/public/js/controllers/taxes_and_totals.js
@@ -609,6 +609,15 @@ erpnext.taxes_and_totals = erpnext.payments.extend({
 		this.calculate_outstanding_amount(update_paid_amount);
 	},
 
+	is_internal_invoice: function() {
+		if (['Sales Invoice', 'Purchase Invoice'].includes(this.frm.doc.doctype)) {
+			if (this.frm.doc.company === this.frm.doc.represents_company) {
+				return true
+			}
+		}
+		return false
+	},
+
 	calculate_outstanding_amount: function(update_paid_amount) {
 		// NOTE:
 		// paid_amount and write_off_amount is only for POS/Loyalty Point Redemption Invoice
@@ -617,7 +626,7 @@ erpnext.taxes_and_totals = erpnext.payments.extend({
 			this.calculate_paid_amount();
 		}
 
-		if(this.frm.doc.is_return || this.frm.doc.docstatus > 0) return;
+		if(this.frm.doc.is_return || (this.frm.doc.docstatus > 0) || this.is_internal_invoice()) return;
 
 		frappe.model.round_floats_in(this.frm.doc, ["grand_total", "total_advance", "write_off_amount"]);
 
diff --git a/erpnext/setup/doctype/company/company.js b/erpnext/setup/doctype/company/company.js
index f882db60c5d..96d01cbc99e 100644
--- a/erpnext/setup/doctype/company/company.js
+++ b/erpnext/setup/doctype/company/company.js
@@ -262,7 +262,8 @@ erpnext.company.setup_queries = function(frm) {
 		["default_employee_advance_account", {"root_type": "Asset"}],
 		["expenses_included_in_asset_valuation", {"account_type": "Expenses Included In Asset Valuation"}],
 		["capital_work_in_progress_account", {"account_type": "Capital Work in Progress"}],
-		["asset_received_but_not_billed", {"account_type": "Asset Received But Not Billed"}]
+		["asset_received_but_not_billed", {"account_type": "Asset Received But Not Billed"}],
+		["default_inter_company_account", {"root_type": "Liability"}]
 	], function(i, v) {
 		erpnext.company.set_custom_query(frm, v);
 	});
diff --git a/erpnext/setup/doctype/company/company.json b/erpnext/setup/doctype/company/company.json
index 40938ea0a5e..4dddff3a05b 100644
--- a/erpnext/setup/doctype/company/company.json
+++ b/erpnext/setup/doctype/company/company.json
@@ -46,10 +46,9 @@
   "round_off_account",
   "round_off_cost_center",
   "write_off_account",
-  "discount_allowed_account",
-  "discount_received_account",
   "exchange_gain_loss_account",
   "unrealized_exchange_gain_loss_account",
+  "default_inter_company_account",
   "column_break0",
   "allow_account_creation_against_child_company",
   "default_payable_account",
@@ -261,14 +260,14 @@
   {
    "fieldname": "create_chart_of_accounts_based_on",
    "fieldtype": "Select",
-   "label": "Create Chart of Accounts Based on",
+   "label": "Create Chart Of Accounts Based On",
    "options": "\nStandard Template\nExisting Company"
   },
   {
    "depends_on": "eval:doc.create_chart_of_accounts_based_on===\"Standard Template\"",
    "fieldname": "chart_of_accounts",
    "fieldtype": "Select",
-   "label": "Chart of Accounts Template",
+   "label": "Chart Of Accounts Template",
    "no_copy": 1
   },
   {
@@ -345,18 +344,6 @@
    "label": "Write Off Account",
    "options": "Account"
   },
-  {
-   "fieldname": "discount_allowed_account",
-   "fieldtype": "Link",
-   "label": "Discount Allowed Account",
-   "options": "Account"
-  },
-  {
-   "fieldname": "discount_received_account",
-   "fieldtype": "Link",
-   "label": "Discount Received Account",
-   "options": "Account"
-  },
   {
    "fieldname": "exchange_gain_loss_account",
    "fieldtype": "Link",
@@ -740,6 +727,12 @@
    "fieldtype": "Link",
    "label": "Default In Transit Warehouse",
    "options": "Warehouse"
+  },
+  {
+   "fieldname": "default_inter_company_account",
+   "fieldtype": "Link",
+   "label": "Default Inter Company Account",
+   "options": "Account"
   }
  ],
  "icon": "fa fa-building",
@@ -747,7 +740,7 @@
  "image_field": "company_logo",
  "is_tree": 1,
  "links": [],
- "modified": "2020-08-06 00:38:08.311216",
+ "modified": "2020-11-26 18:20:48.184507",
  "modified_by": "Administrator",
  "module": "Setup",
  "name": "Company",
@@ -808,4 +801,4 @@
  "sort_field": "modified",
  "sort_order": "ASC",
  "track_changes": 1
-}
+}
\ No newline at end of file