Intercompany Expense/Revenue Allocation - Example

Company A receives a utility bill which needs to be allocated to Company A as well as to two companies’ subsidiaries, B and C:

1. Create a purchase invoice in Company A with the entity HDO selected on the invoice header.

2. Select the utility company vendor.

3. Add three invoice lines, one for each subsidiary’s expense amount.

4. Use the first line to enter the utility expense amount allocated to Company A.

5. On the second line, keep the same line entity, HDO, and select Company B and entity 100 to allocate the utility expense to the entity 100, Company B.

6. In the IC Partner Reference field, select the Utility Expense GL account. Note that this the GL account from the Company B chart of accounts.

7. On the third line, repeat the same steps to allocate the utility expense amount to Company C.

8. Once the invoice is posted, Business Central will create the Outbox transaction in Company A which will be send to Company B and Company C.

9. Accept the invoice in the Company B, Inbox. The system will create the Intercompany General Journal for the selected GL account with the amount of utility expense allocated to Company B. The system will use IC partner, Company A, to balance the transaction.

10. Repeat the same process in Company C to accept the utility invoice.