Automating Intercompany Postings in Business Central: From Setup to Execution

Many growing companies work with multiple legal entities. Each month, they exchange bills, services, or goods between companies. Doing this manually often leads to delays and mistakes. Microsoft Dynamics 365 Business Central helps fix that through Intercompany Automation.

This feature lets you post one entry in a company, and the system automatically creates the same transaction in the other company. Let’s see how you can set it up and how it works with a real example.

Why Intercompany Automation Matters

If two companies within the same group trade with each other, both sides must record the same transaction, one as a sale and one as a purchase. When done manually, the process is slow and can cause mismatched balances.

Automating it in Business Central saves time, reduces errors, and keeps both companies’ financials in sync automatically.

Step 1: Setup Process

1. Turn on Intercompany Feature

Open Business Central and go to the Intercompany Setup page. Turn on the setting that allows the company to act as an Intercompany Partner.

2. Add Intercompany Partners

Add all related companies as partners. For example, if you have Company A and Company B, set up each as a partner inside the other.

3. Map the Chart of Accounts

Make sure both companies use accounts that match in purpose.

Example:

• a. Sales Revenue in Company A → Intercompany Sales Revenue in Company B
• b. Payable in Company A → Receivable in Company B

4. Create Intercompany Customer and Vendor

• a. In Company A, create a customer that represents Company B.
• b. In Company B, create a vendor that represents Company A.
  Link these two accounts under Intercompany Partner Links.

5. Create Intercompany Journal Templates

Use IC General Journals to record shared expenses or income regularly. You can automate them using job queues or recurring batches.

Step 2: Automation in Action

Once the setup is complete, every time a user posts a sales invoice or general journal related to an Intercompany Customer or Vendor, Business Central creates a matching entry in the partner company.

Both companies can see these transactions in their IC Inbox and Outbox. You can even add automation rules to post them automatically without approval if desired.

Step 3: Use Case – Monthly IT Service Charges

Scenario:

The Head Office provides IT services to a Subsidiary every month for ₹1,00,000.

Steps:

1. The Head Office posts an Intercompany journal recording income of ₹1,00,000.
2. Business Central automatically sends this transaction to the Subsidiary’s system.
3. The Subsidiary sees the entry in its inbox as an expense entry and posts it.

Both companies now have matching entries, one as income and one as expense, without any manual adjustments.

Result:

Transactions are accurate, time is saved, and your accountants can focus on analysis rather than repetitive posting.

To conclude, automating intercompany postings in Business Central makes financial management simple and reliable. Once configured, it ensures transparency, reduces errors, and speeds up reporting.

I Hope you found this blog useful, and if you would like to discuss anything, you can reach out to us at transform@cloudfronts.com.