Intercompany accounting setup and process in Microsoft dynamics AX 2012

In this post, I will take you through a very simple functionality called  the intercompany accounting in dynamics AX 2012. This is a simple walk through of the setup required to be able to do intercompany transactions and also we will post and verify the ledger updates for an actual intercompany transaction in both the source and destination legal entities.

We will do this in the CONTOSO dataset. Let us say that the CEU is the source company and CEE in the destination legal entity and CEE ordered some stationary for promotional events, for which the finance controller of CEU received the invoice. Now the controller needs to post and intercompany entry to record the transaction in CEE.

Let us now look at the setup we need to do in CEU  and CEE for these to be able to intercompany transactions with each other.

In CEU company, navigate to GL > Setup > Posting > Intercompany accounting and see that its required IC setups.

Credit account: The ledger account that contain the intercompany credit transactions.

Debit account: The ledger account that contain the intercompany debit transactions.

Journal : It is the name of the journal to which the transactions are transferred.

Now, in the CEE company, navigate to GL > Setup > Posting > Intercompany accounting and see that its required IC setups.

We have now done/verified the necessary setups for the intercompany transactions. Let us now go and post and actual transaction and verify the impacts.

Say that the CEU and CEE ordered some stationaries for which CEU finance controller of CEU received the invoice. Now the controller needs to post and intercompany entry

For this do the following.

1. In CEU go to GL >  General Journal and create a new intercompany journal.

2. Click lines and enter account type = ledger , Main account = 110180(Petty cash account) and credit amount of $1000.

3. Click General tab and select offset account company  = CEE, account type = Ledger and account = 6300

4. Click post and notice the info log. (One in CEE and another in CEU)

5. Let us now verify the voucher postings. In CEU, navigate to GL > Inquiries > Voucher transactions and fetch the required voucher. Please see the screen below and verify that the petty cash account is credited and the Inter unit receivable – CEE account is debited. ( This is the debit account which we did set in the inter company accounting setup form earlier).

6. Now go to entity CEE and notice the voucher. The Due to CEU account(3360 is the credit account which set in the intercompany accounting setup parameters of CEE entity.

7. You may also wish the see the IC journal which got created in the CEE company as shown below.