In Business Central, intercompany functionality allows users to transact goods between different companies in the same environment. This extends to both drop shipments and special orders. Before we continue, we previously covered drop shipments, special orders and intercompany transactions in two separate previous posts. We recommend reading these first. Today’s post covers how to go about creating intercompany records for these types of transactions.
Establishing the intercompany setup
In our first blog on intercompany functionality, we ran through the setup you need to transact between companies in the same environment. The exact same setup applies here. Due to this, I will provide more of a summary of what was said in that blog. You can find a link to that particular blog in the opening paragraph.
For all of the relevant companies you wish to transact between, there’s a list of what you should set up.
- On the Company Information, establish:
- IC Partner Code
- IC Inbox Type
- Auto. Send Transactions (this is a timesaver, so enabling is optional)
- IC inbox Details (optional)
- On the Intercompany Partners page, establish:
- A record for each company you wish to perform intercompany transactions with
- On the specific Intercompany Partner records, establish:
- Company Name
- Transfer Type (typically, Database)
- Auto. Accept Transactions (optional)
- Customer and/or Vendor No.
How to perform intercompany drop shipments and special orders
Now that we’ve configured the setup, let’s begin demonstrating how to perform these intercompany transactions. I will do so by making my own records, explaining each step as I go. For my examples, I will use these three entities:
- Probitas – UK
- Probitas – France
- Trey Research
Probitas – UK will be selling goods to Trey Research. Trey Research are simply the customer who will receive the goods. ‘Probitas – France’ is the vendor. Their role will differ between drop shipments and special orders.
Intercompany drop shipment example
In Probitas – UK, I have created a sales order for Trey Research:
On the sales order lines, tick the ‘drop shipment’ field. You may have to personalise the page to add this field.
After creating the sales order, leave the record. The next step is to create the purchase order. As this will be a drop shipment, this purchase order will be shipped directly from the vendor to the customer.
Intercompany purchase order for the drop shipment
On the purchase order record, input the Vendor No. value. This will be for our intercompany vendor, Probitas – France. The next step is to go down to the Shipping and Payment tab. Here, amend the Ship-to field value to Customer Address. In the Customer field below, add the relevant customer. In our case, this is Trey Research.
Next, in the ribbon, click ‘More Options’, ‘Actions’, ‘Functions’, ‘Drop Shipment’ and ‘Get Sales Order’. Simply select the relevant sales order record. If you can’t remember which it is, if you sort the No. values in descending order, it should be the top value. This is presuming you have a number series set up for sales orders.
The purchase order line now has values:
Next, click ‘Actions’, ‘Functions’, ‘Other’ and ‘Send Intercompany Purchase Order’. Depending on whether you have Auto. Send Transactions enabled, this will either be in the Intercompany Outbox Transactions or the Handled Intercompany Outbox Transactions. If it’s in the former, you will need to find the record on that particular page, click ‘Actions’ and ‘Send to CI Partner’. If it’s in the latter, you can simply switch company to your other intercompany entity.
Over in the other company, dependent on whether you have ‘Auto. Accept Transactions’ enabled, the record will either be in the Intercompany Inbox Transactions page or the Handled Intercompany Inbox Transactions. Similar to before, if it’s in the former, you need to find the record, click ‘Actions’ and ‘Accept’:
You should now have a corresponding sales order.
The records created
The only thing left to do now is post the records. The records you should have at this stage are:
- Sales order to Trey Research in the Probitas – UK company
- Purchase order to Probitas – France in Probitas – UK company
- Sales order to Probitas – UK in Probitas – France company
One thing to note is you can’t post the purchase order in the Probitas – UK company completely until the sales order in Probitas – UK to Trey Research is posted.
Intercompany special order example
Fortunately, as we’ve already got out intercompany functionality set up appropriately, this shouldn’t be onerous. One of the main differences between special orders and drop shipments is who ships the goods. For special orders, the company who creates the inital sales order will ship the goods to the customer.
For intercompany special orders, we again start at a sales order:
As you can see, the sales order’s very similar to the previous one. However, one key difference is, to have the Special Order field ticked, you must input a corresponding Purchasing Code. Once you’ve done this, you can leave the record. Our next job is to create the purchase order.
Using the Requisition Worksheet to create the purchase order for the special order
Instead of manually creating a purchase order, this time I will create one using the Requisition Worksheet. Click the highlighted actions below:
I have subsequently input values to filter the sales order results. I only want the worksheet to display the sales order specific to the special order. In my case, I couldn’t remember the Document No. value. To get around this, I sorted the Document No. values in Descending order and clicked the top result. I know that I am the last person to create a sales order for this customer. In larger organisations with more transactions, you may simply have to go back and check the Document No. value to be safe.
Once you’re happy with the filters, click ‘Ok’. You should now have a line in the worksheet that matches your sales order line. Make sure you input the relevant Vendor No. on the line.
Afterwards, click the actions highlighted below to create the purchase order:
Intercompany purchase order for the special order
Now we have our purchase order, the next step is to send the record to our vendor, using intercompany. As we set up the intercompany details before, this next part is straightforward.
On the Purchase Order record, click ‘Actions’, ‘Functions’, ‘Other’ and ‘Send Intercompany Purchase order’:
As I mentioned for drop shipments, whether or not you have Auto. Send Transactions enabled will determine whether a record will be in the Intercompany Outbox Transactions or the Handled Intercompany Outbox Transactions page. If it’s in the former, you will need to find the record on that particular page, click ‘Actions’ and ‘Send to CI Partner’.
After switching into the ‘Probitas – France’ company, there will either be a record in the Intercompany Inbox Transactions page or the Handled Intercompany Inbox Transactions page. This depends on whether ‘Auto. Accept Transactions’ is enabled in the company you sent the intercompany purchase order to. Like before, if it’s in the former, find the record and click ‘Actions’ and ‘Accept’.
At this stage, there are three records:
- Sales order to Trey Research in Probitas – UK company
- Purchase Order to Probitas – France in Probitas – UK company
- Sales Order to Probitas – UK in Probitas – France company
The final task is to post the special order. Unlike with drop shipments in Business Central, special orders allow you to fully post the purchase order before the sales order. So, remaining in our ‘Probitas – UK’ company, I can fully post my intercompany purchase order before switching to the ‘Probitas – France’ company.
After posting both the intercompany transactions between the two Probitas companies, the final step is to post the original sales order to Trey Research.
Thanks for reading! Hopefully you’ve learnt something new. Intercompany drop shipments or special orders are potentially a niche requirement, but knowing it’s possible in Business Central is useful. We’d love to hear your feedback. If you have any comments or questions, please get in contact with us. To never miss when we post, follow us on LinkedIn.