Intercompany Setup in Business Central

Before you able to create a Sales Invoice or Purchase Invoice to your intercompany partners, there are some configurations need to complete in between the company you administer and the company your partner is managing.

    1.       Setup Intercompany Partner Code 

This setup will allow the system to differentiate which entity under the same Business Central should the invoice direct to. The Intercompany Partner Code should be unique and agreed upon by all companies.

Page:  Intercompany Setup

i.         Enable the “Auto Send Transactions” which allows system to send out to intercompany partner once there is transaction posted.

    2.       Setup Intercompany Partners Code

This setup will configure the intercompany partners that will involve in the whole intercompany setup in BC. In another word, you will need to create a Intercompany Partners codes for each of the intercompany in BC, and BC will based on the intercompany partners unique code to deliver the intercompany transaction from the company you administer to the partner company in BC.

Page: Intercompany Partner

i.                     Select New.

ii.          Fill in the fields as necessary. Select the intercompany partner that you are setting up in “Company Name”, this will map the intercompany partners in BC.

iii.         Set the default “Customer No.” and “Vendor No.”, any purchase invoice that received or sales invoice that created will link to this intercompany partner code.

iv.         Repeat Step “ii” and “iii” for all other companies that are part of this intercompany setup.

Note that the Receivables Account/Payables Account will be based on the Customer Posting Group/Vendor Posting Group that you assigned in Customer Card/Vendor Card.

    3.       Setup Intercompany Chart of Accounts

You can setup a common Chart of Accounts for intercompany transactions, this allows you and the intercompany partners to use it as common reference as not there is possible that partner company is using Chart of Account that different from each other. By setting up Intercompany Chart of Accounts, the company that receive transaction (incoming transaction) from other intercompany partners will have the account entries automatically mapped based on the Intercompany Chart of Accounts.

 Refer to the sample below is the 2 different companies is setting up the COA mapping to Intercompany COA. Notice that the 2 expense account code using by this 2 companies are different with each other, and both are mapping to a common Intercompany account code.

Page: Intercompany Chart of Accounts

i.         Setup the common account code that Intercompany Partners will be using. Refer to “Map-to G/L Acc. No.”, this is to map to the current company COA. Refer to screenshots below the Intercompany Chart of Accounts setup for 2 different companies, Cronus International Ltd and CRONUS UK Ltd. 

    4.       To Setup Default Intercompany Partner General Ledger Accounts.

You can set which account code in your partner company will posting to when you create an intercompany sales or purchase (outgoing transaction). On the Chart of Accounts page, for accounts that you regularly use on outgoing intercompany sales or purchase lines, you can specify a default intercompany partner general ledger account.

Page: Chart of Account

i.     On the regular use account code, map the Intercompany Partner G/L accounts in “Default IC Partner G/L Acc. No.”.

    5.       Setup Intercompany Vendors and Intercompany Customers

By setting up the Intercompany Vendor and Intercompany Customers, it will allow to send a transaction (such as a sales invoice) from one company and have the corresponding transaction (such as a purchase invoice) automatically created in the partner company.

 

Page: Vendor

         i.        Create vendor card for the Intercompany Partners just like                                 ordinary way. Next, to link the Vendor Code to the Intercompany                         Vendor, select the relevant intercompany partner code in IC Partner                     Code. 

ii.      Repeat the same step from Vendor card for setting up Intercompany Customer in Customer.

Take note that the same setup and configuration of the Intercompany should be applied in all intercompany in BC. Once the require setup is complete, you may proceed to create Sales Invoice/Purchase Invoice that will direct to the intercompany partners.

I have also wrote a topic on how to create intercompany transaction, click the following link if you want to know further. How to record intercompany transaction in BC.

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.