Keep both sides in step with Business Central intercompany

Why intercompany balances drift apart

Two entities trade with each other, and each books its own side by hand. The entries often differ in date, amount or account. One company posts the invoice this period. The other posts it next period. Or a recharge goes to the wrong partner.

These gaps show up at group close. Someone must match the due-to and due-from accounts line by line. That work repeats every period. The feature fixes the cause. It makes the second entry from the first, so the two cannot disagree.

How Business Central intercompany transactions flow

First, you define each company as an intercompany partner in the others. Then you link a customer or vendor card to its partner code. A purchase order raised to that vendor can then travel across. It lands in the partner's inbox. Once the partner accepts it, a sales order appears.

Journals work the same way. A recharge posted in one company creates the mirror line in the other. Sent items wait in the outbox until you send them. Handled transactions stay on both sides, so you can see what moved and when.

How we set up the partners

Groups rarely share one chart of accounts. So we build an intercompany chart. It is a neutral list, and every company maps its own accounts to it. Then an expense recharged from one entity arrives coded to the right account and department in the other.

Next, we decide how transactions travel. Companies in one environment can swap data directly. Companies in separate environments or tenants swap by file or through the API. We turn on auto send and auto accept only where your controllers agree.

What the group gains

Once live, a sale from one entity to another is entered once. The receiving company gets a purchase document with the same quantities and prices. If the currencies differ, it shows its own currency. Due-to and due-from accounts move together. So elimination entries at consolidation become routine.

We also hand over tested scenarios that match how your group really trades. They cover stock sold between entities, shared costs, a management fee and a loan. Each has written steps for the sender and the receiver. In addition, finance gets a simple check to run before the close.

Limits to know before you start

The feature swaps documents and journal lines. It does not move stock between companies by itself. The selling company ships, and the buying company receives, each through its own posting. You must also match item numbers across companies. Otherwise, lines arrive without an item.

People often mix this up with consolidation. Intercompany keeps trading entries aligned. Consolidation combines the ledgers into group statements, and that is where eliminations are posted. Most groups need both. So we plan them together, and the accounts we pick suit each one.

Business Central intercompany questions

Do the companies have to be in the same environment for Business Central intercompany?

No. Companies in one environment swap transactions directly. Companies in different environments or tenants can swap them through files or an API connection. The partner card records which method applies. We choose the method per partner, based on where each company is hosted. We also test the link before you rely on it.

Can intercompany partners use different currencies?

Yes. Each partner card holds a currency code. A document sent from one company arrives in the other with amounts in the agreed currency. Then each company converts to its own local currency at its own exchange rate when it posts. So both ledgers stay correct, even when the two currencies differ.

Does a sales invoice in one company post the purchase invoice in the other?

It creates the purchase document in the partner's inbox. Whether someone accepts it by hand or the system accepts it automatically depends on your setup. Posting the received document normally stays with the receiving company. That way, each entity keeps control of its own books and its own period close.

What if our charts of accounts are different?

Each company maps its accounts to a shared intercompany chart. A line sent from one company turns into the intercompany account first. Then it turns into the receiving company's own account. We use the same approach for dimensions. So even different structures can trade cleanly, and nobody has to rebuild a chart of accounts.

Is Business Central intercompany the same as consolidation?

No. Intercompany creates matching entries in two trading entities. Consolidation pulls the ledgers of several entities into one company for group reporting, and it is where you eliminate intercompany balances. They are separate features. However, they work well together when you plan the accounts for both at the same time.

Related group accounting services

Groups that trade internally usually need several entities set up the same way, plus a consolidated view on top. These pages cover the services that sit beside Business Central intercompany work. Each one helps you keep the group books tidy, so month-end stays calm and every entity closes on a clear, shared routine. For the product detail, see Managing intercompany transactions in Business Central on Microsoft Learn.