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Intercompany Journal Entries-Dynamics Business Central

Let’s go through Intercompany Journal Entries-Dynamics Business Central.

I have two companies open here Cronos sample company and Cronos USA division two they are related entities that often have intercompany set up between them in the intercompany set up let’s talk about how intercompany setups working a little bit so an intercompany setup Cronos you it is is set up as CRIC Cronos in her company division two is set up as division two and here’s the division two setup down here so when I post it’s gonna hit 1201 etc etc and this company and then in division two I am actually set up

the opposite so this This would be Division 2. This is CR-IC there, but it sets up the relationship. I’ve also chosen to auto-send transactions, get transaction notifications.

And in the setup of Cronos Division 2, I’ve actually chosen to auto-accept transactions. What that means is in the regular intercompany setup, you have intercompany inboxes and outboxes. So if I sent an intercompany from here, it could be stuck at the intercompany outbox and then someone would have to send it. And then it would be stuck in the intercompany inbox in the other company and somebody would have to accept it. As it is, this is automatic. However, in the destination company, you still have to go to intercompany general journal and post the intercompany transaction once it’s there.

So we’re going to start out in Cronos. Cronos is the parent company, and the first thing we’re going to do is an intercompany journal entry. I’m actually going to turn off information over here so we can see more. In this scenario, Cronos has paid rent on all of their divisions, and we need to send over to Division 2 its portion of the rent. So in this intercompany general journal is the only place you can send these from. So from here, I’m going to choose my rent account.

Rent expense, give it a good description.

And from here, I’m crediting out of my $6,100, the $6,000 that is Division 2’s purchase. So my balance account type is intercompany partner, Division 2, and their GL account. And this is based. On the intercompany chart of accounts set up. I said $6,100 in this company equals $6,100 in the destination company. However, here, I could choose another account to code it to. But anyway, this is it. I’m moving $6,000 out of my rent in Cronos and moving it over to Division 2. So I’m going to post this.

It’s now telling me an entry. It has been called. Created as an intercompany transaction. The entry is automatically sent to partner Division 2. I’m going to say OK. And it’s just telling me the journal lines were posted. In this company, this went against my rent expense. So if I go into my chart of accounts and go down to $6,100, I can come in here, balance a date. And I should be able to see today’s posting. I actually didn’t pay attention to the posting date, but it was $6,000.

And here it is. Give it a good description. $6,000. Negative $6,000. So it reduced the rent expense here. And then it put itself in to my 1201. How much is due from Division 2? This is $6,000 plus some other transactions from this date.

Generating that balance of the $5,000. $5,000. $5,000. $5,000. So I’ve had the auto send and auto accept. I don’t have to go to my outbox here to send. And I don’t have to go to my inbox in Division 2. So in Division 2, where is this now if it’s not in my inbox? It’s going to be in Intercompany General Journals. So if I open this General Journal now, this transaction from my source company is sitting here. And what it’s going to do, I’m going to preview posting. Is it’s going to go against, it’s 1202 due from another company, and it’s going to hit my rent expense in here for $6,000.

So I now have a due to and an expense.

So all I have to do here is post it into the destination company and that transaction is complete.

and that is how we process Intercompany Journal Entries-Dynamics Business Central

To learn more about Intercompany processing in BC use Microsoft Learn HERE

To contact Aisling Dynamics for help or questions please go HERE