Intercompany Postings is designed for users who control more than one legal business entity and have set up multiple companies to separate the accounting functions of each of these entities. This broad description applies to many users, especially those operating in international markets or regions with widely disparate business cultures and regulatory environments.

Your organization may consist of several companies, but might not have the equivalent number of accounting and administrative teams. Intercompany Postings lets you simplify and streamline business processes and transactions between all of these entities.

Once you implement Intercompany Postings, doing business with your subsidiary and internal partner organizations becomes as simple as engaging with your external vendors and customers. You enter intercompany transaction information only once in the appropriate documents. You can use the functionality you are already familiar with, such as receivables and payables management. Mapping facilities for the chart of accounts and dimensions help ensure that information appears in the right places.

There are four main benefits to Intercompany Postings:

Streamlining the Flow of Business Activities

Intercompany Postings lets you distribute sales and purchasing documents, as well as General Journal entries to all of your satellite offices, sales offices, or subsidiary companies, from within the program. Savings of time and increased efficiencies result throughout the organization as you eliminate redundant data entry and the sending, receiving, printing, and archiving of the sales and purchasing documents on paper.

You are in full control of all transaction documents. For example, you can reject a document sent to you and, in this way, reverse postings that were incorrect. Or, when making a purchase from a partner or subsidiary company, you can update the purchase order as long as the selling company has not shipped any goods.

When you enter a transaction, you do not need to specify the accounts for an individual set of books, but simply give the identification of the partner company. Intercompany Postings creates General Journal lines that result - as soon as they are posted - in the balancing of the books of both companies involved in a transaction. In Receivables and Payables, you assign an intercompany partner code to any customer or vendor. From that moment on, all orders and invoices generated pertaining to transactions with these companies will produce corresponding documents in the partner company, resulting in correct balancing of the accounts.

Intercompany Postings functionality focuses on supporting intercompany transactions with sales and purchasing documents, and with General Journal lines. Within this area, Intercompany Postings allows intercompany transactions between multiple Microsoft Dynamics NAV databases, for example, in different countries/regions, as well as multiple currencies, different charts of accounts, different dimensions, and different item numbering.

Intercompany Postings uses a number of entries and documents in intercompany transactions:

  • General Journal entries
  • Purchase and sales orders
  • Purchase and sales invoices
  • Credit memos
  • Return orders

When you set up Intercompany Postings, you create a list of intercompany partners, called IC Partners, and an intercompany chart of accounts. Following these steps, you can perform intercompany General Journal transactions. You set up dimensions - if needed - separately. Note that the General Journal by itself does not include currency functionality, but converts all amounts at the applicable rate to local currency.

After you set up business partners as customers and vendors in the system, and assign them intercompany partner codes, it is possible to exchange intercompany purchase and sales documents, including items and item charges. The receivables and payables functionality includes the capability of handling different currencies; intercompany transactions can proceed in any required currency.

When you make full use of the capabilities of Intercompany Postings, individual transactions can become elements in a single, fully connected accounting process with a complete audit trail of business activities between your partner and subsidiary companies.

See Also