How business central handle intercompany transaction easily

Intercompany transactions in Business Central allow you to make transactions with your intercompany partners. You can create intercompany transactions by creating an Invoice or a Purchase Invoice. Transactions made with intercompany transaction send separate documents with their own document numbers to each company. To establish intercompany transactions, intercompany partners must establish a common chart of accounts and common dimensions, where each company's chart of accounts and dimensions are mapped to the intercompany chart of accounts and dimensions.

The Prerequisite Requirements and Preliminary Setup for Intercompany Transactions:

i.                     Each Intercompany Partners need to identify the Intercompany Code that their company represents to setup as an Intercompany Partner Code.

ii.                   You must setup Intercompany Vendor/Customer in your company’s Vendor Card/Customer Card.

iii.                 Each Intercompany Partners must agree with a set of accounts as which setup as common set of charts of accounts to serve as common reference.

iv.                 After setting up the Intercompany Chart of Accounts, map it to your company's Chart of Accounts for incoming intercompany transactions. (For incoming intercompany transaction)

v.                   In company’s Chart of Accounts, map the common use account for intercompany transaction to Intercompany Chart of Accounts. (For outgoing intercompany transaction)

vi.                 (Optional) Setup Intercompany Dimensions.

 

For full details on setting up the Intercompany Transaction, you can refer to the following Link. "Intercompany Setup in Business Central"

To Process Outgoing Intercompany Transactions

In the following scenario, I will generate a Sales Invoice from Cronus International Ltd, the company I manage, to Cronus UK Ltd, an Intercompany Partnership.

Page: Sales Invoice

        1.       Prepare sales invoice with necessary information.

        2.       Enter the billing item details as required. Note that the G/L account code that used in sales lines are mapped to a default intercompany chart of account (refer to IC Partner Reference in screenshot). The income type G/L Code will be posted from one company and have the corresponding transaction automatically create as Purchase Invoice using expense type G/L Code in partner company (depending on the Intercompany COA mapping in partner company).

        3.       Proceed to post the sales invoice.

        4.       When you post an intercompany journal or document, the transactions are automatically sent to your Handled Intercompany Outbox Transactions. You may trace all the posted intercompany transaction from this page.

Page: Handled Intercompany Outbox Transactions

            5.       You can review the transaction details by select to Details action.

To Process Incoming Intercompany Transactions

 When you receive intercompany transactions from your intercompany partners, they will be placed in your “Intercompany Inbox Transaction”. You must evaluate each transaction and respond accordingly.

 Page: Intercompany Inbox Transaction

     1.       Select the entry that you need to review. To apply next action, in the “Line Action”, you can “Accept”, “Return to IC Partner” or “Cancel” the received document.

For lines that you processed with the Accept action, document or journal lines will be created in your company. For lines that you processed with the Returned by IC Partner action, you must now post a correction to the original transaction that you posted in your company.

2.       Process the selection of Line Action by selecting to “Carry out Line Actions”. 

3.  Accepted transaction will be created as correspondence document, Purchase Invoice in this case. You are still required to post the document after reviewing.

4. For transaction that assigned with “Return to IC Partner”, it will transfer to “Intercompany Outbox Transactions”. You will need select the “Send to IC Partner” action to return the transaction back to intercompany partner.

5. Back to the original company that initiate the transaction, the rejected document from partner company will now be sitting in “Intercompany Inbox Transactions”. You will need to “Cancel” this document as it won’t be able to accept into BC.

6.   You can send the “Cancelled” lines to “Handled Intercompany Inbox Transactions” by select “Carry out Line Actions”. 

7.    The record status will be “Cancelled” but do take note that you are still required to prepare a Sales Credit Memo to cancel the original Sales Invoice, there are no automation after the document is rejected by partner.

Is there anything BC-related that I can help you with? Or even simply want to say Hi! Feel free to email me at "Hello365businesscentral" at Gmail; I will do my best to assist you.