How-ToFinance & Operations

How to Use Intercompany Transactions in Business Central

A step-by-step guide to setting up and processing intercompany transactions in Business Central, including IC partner setup, chart of accounts mapping, and inbox/outbox handling.

Stein Sæstad
10 min read

Intercompany (IC) transactions in Business Central let you post journals and documents between two companies and have the corresponding entries appear automatically in the receiving company. This removes the need to manually re-enter the same transaction on both sides.

IC works across companies within the same Business Central environment using a shared inbox/outbox mechanism. For companies in separate environments, transactions can be exchanged via email or file. This guide focuses on the same-environment setup, which is the most common configuration.

Step 1: Define Your Own IC Partner Code

Each company participating in IC transactions needs its own IC partner code. This code identifies the company to its trading partners.

  1. In the sending company, search for Intercompany Setup using Alt + Q.
  2. In the IC Partner Code field, enter a short code to represent this company (for example, PARENT or UK01).
  3. Set the Auto. Send Transactions field based on how you want transactions to move: automatically or manually via the outbox.
  4. Select OK to save.

Repeat this step in every company that will send or receive IC transactions, using a unique code for each.

Step 2: Create IC Partners

IC partners represent the other companies you trade with. Each company needs a partner record for every company it transacts with.

  1. Search for IC Partners using Alt + Q.
  2. Select New.
  3. Fill in the following fields:
FieldValue
CodeMust match the IC Partner Code set in the other company’s Intercompany Setup
NameA descriptive name for the partner company
Inbox TypeDatabase for same-environment companies, or File Location / Email for external
Inbox DetailsFor Database, select the company name from the list
Currency CodeLeave blank to use the partner’s local currency, or specify if fixed
  1. Set Receivables Account and Payables Account, these are the G/L accounts used to record the intercompany balance on each side.

Repeat in each participating company, creating a partner record that points back to the originating company.

Step 3: Map the Intercompany Chart of Accounts

IC transactions reference IC account codes rather than each company’s own G/L account numbers. Each company maps its G/L accounts to a shared set of IC account codes.

  1. Search for IC Chart of Accounts using Alt + Q.
  2. This page defines the shared IC accounts used across all partner companies. If your companies share the same chart of accounts, the IC chart typically mirrors the main chart.
  3. Add rows for each account that will be used in IC postings, assigning an IC Account No. and Account Type.

Once the IC chart is defined, map your company’s G/L accounts to IC accounts:

  1. Search for Chart of Accounts using Alt + Q.
  2. Open a G/L account that participates in IC transactions.
  3. On the account card, set the Default IC Partner G/L Acc. No. field to the corresponding IC account code.

Repeat for each G/L account involved in IC postings. In the receiving company, do the same mapping, so the IC account code maps to their local G/L account.

Step 4: Map Intercompany Dimensions (Optional)

If your companies use dimensions and need to pass dimension values across IC transactions:

  1. Search for IC Dimensions using Alt + Q.
  2. Define the IC dimension codes that correspond to dimensions in each company.
  3. On each company’s Dimensions page, map the local dimension code to the IC dimension code.

This step is only required if dimension values need to be preserved across the IC boundary. If both companies use the same dimension codes, mapping is straightforward.

Step 5: Send an IC Transaction

IC transactions can originate from general journals or from sales and purchase documents.

From a General Journal

  1. Search for General Journals using Alt + Q and open the relevant journal batch.
  2. Enter the journal lines as normal.
  3. For lines that should post to the partner company, set Account Type to IC Partner and Account No. to the partner code.
  4. Set the IC Partner G/L Acc. No. to the IC account the partner should post to.
  5. When ready, post the journal. The IC lines are routed to the IC Outbox.

From a Sales or Purchase Document

Sales orders, sales invoices, purchase orders, and purchase invoices can also be sent as IC transactions. When the Sell-to Customer No. or Buy-from Vendor No. is linked to an IC partner:

  1. Create the document as normal.
  2. On posting, Business Central creates the corresponding IC outbox entry automatically.

Step 6: Handle the IC Outbox

The IC Outbox holds transactions that have been generated but not yet sent to the partner.

  1. Search for IC Outbox Transactions using Alt + Q.
  2. Review the pending transactions. Each row shows the partner, transaction type, and amount.
  3. Select the lines you want to send and choose Send to IC Partner from the action bar.

If Auto. Send Transactions is enabled in Intercompany Setup, this step happens automatically on posting and the outbox is cleared without manual intervention.

Step 7: Handle the IC Inbox in the Receiving Company

Switch to the receiving company. Incoming IC transactions appear in the IC Inbox.

  1. Search for IC Inbox Transactions using Alt + Q.
  2. Review the incoming entries. You can accept, modify, or return them.
  3. To accept a transaction, select it and choose Create Journal Lines or Create Document depending on the transaction type.
  4. Business Central creates a journal or document pre-populated with the mapped G/L accounts and amounts from the sending company.
  5. Review the generated entry, then post it.

After posting, the IC inbox entry is marked as Completed. The balance on both companies’ IC partner accounts should net to zero.

Step 8: Reconcile Intercompany Balances

Periodically, confirm that the outstanding balances on each company’s IC partner G/L accounts match.

  1. In each company, run a Trial Balance or G/L Account Balance report filtered to the IC receivables and payables accounts.
  2. The balance in Company A’s IC receivables should equal the balance in Company B’s IC payables (in the same currency), and vice versa.
  3. If there are differences, check for transactions in one company’s inbox that have not yet been posted in the other.

Unposted inbox items are the most common cause of IC reconciliation differences. Review IC Inbox Transactions in each company for any entries with Completed status set to No.

Notes on File and Email-Based IC

For companies in separate Business Central environments or tenants:

  • Set Inbox Type to File Location or Email on the IC Partner card.
  • When sending from the outbox, Business Central exports the transaction to a file or generates an email.
  • The receiving company imports the file via IC Inbox Transactions → Import Transaction File.

The posting process after import is the same as the database method.

If you work across multiple legal entities and need to control which users can post IC transactions, see How to Configure Security Groups in Business Central.