Intercompany Postings

Fisherman

All -

I've been skimming the whitepaper on IC Postings, and I've got a question.

We have several locations in different states in the US. Each location engages in different lines of business, with different vendors, customers, etc...

We were considering setting each location up as its own company in Navision, and were wondering if IC Postings could be used to centralize accounting functions - like Payables and Receivables. The IC whitepaper I have seems to address it in part, but it's not that clear if this is the intention.

If we used IC postings, would central accounting only be able to see payables and receivables from each location, or would they also be able to see other information, like COGS (for example)?

nunomaia

In intercompany you can send documents between different companies and merge chart of accounts. Send payment/receive information, etc.

You will have different invoice numbering for each company, different vendors and customer no., etc.

You will have different COGS per item / company.

I don’t know if that you had in mind.

ayhan06

if locations run REALLY different business, they must use different companies in navision.. but, if dimension names, item numbers etc are prepared identically and planned carefully, you can have reports combining amounts of all companies by using "Business Intelligence" solutions like TARGIT. also you can try standart BA module of NAV..

MarkD33

I'm not a big fan of IC simply because it doesn't handle IC the way most US/Canadian companies handle IC.

If you're looking to do the following:

~ Input a Purch Invoice, specify an IC partner, and have that posted Purch Invoice create a Sales Invoice for the IC partner, then NAV's IC is for you.

If you're looking to do this:

~ Input a Purchase Invoice in a parent company and have the Payable hit the Parent company while the Expense goes to a subsidiary, the NAV's IC is the wrong option. There are very good add-on's that will cover this scenario.

Mark

mfeirman

What are some of the add-ons you are referring to in the second scenario???

-Mark

David_Cox

I have worked on a couple of NAV IC projects this year, and found we have had to tidy it up quite a bit, it is a bit to open "out the box", like allowing the financial details to be changed after an order has been sent to a partner, allowing received documents to be changed, recalculating values like if you send a direct unit cost or unit price at Navision's standard 5 decimals, it recalculates them and rounds the values to 2 decimals or the amount precision for the currency, it has no checks for the VAT %, if a line was calculated at 5% in partner 1 and the G/L Account was set to 7.5% in partner 2, it will calculate the VAT base from the "Amount Including VAT" and the 7.5% rate of partner 2, and just ignores the "VAT Base Amount" from the Inbox detail, why it recalculates I cannot understand, it should at leat take the VAT % across and test the value, we have changed this to calculate and match the VAT %, by finding a "VAT Prod. Posting Group", or stopping the Document until one is set up.

If you create an Invoice at Partner 1 which is then rejected by Partner 2, there is no function to create a matching Credit when you accept the Returned Document, we have also had to develop this option, this would be a nice to have as standard!

Having found these problems it is still a reasonable module.

But it really need MS to test and correct this module and bring it back to the table!

These comments are true as at version 5! :shock:


Why??

    IF Currency.GET(SalesHeader."Currency Code") THEN
      Precision := Currency."Amount Rounding Precision"
    ELSE BEGIN
      GLSetup.GET;
      IF GLSetup."Amount Rounding Precision" <> 0 THEN
        Precision := GLSetup."Amount Rounding Precision"
      ELSE
        Precision := 0.01;
    END;
    SalesLine.VALIDATE(Quantity,Quantity);
    SalesLine.VALIDATE("Unit Price",ROUND(("Amount Including VAT"/(1 + (SalesLine."VAT %"/100)))/Quantity,Precision));
    SalesLine.VALIDATE("Line Discount Amount","Line Discount Amount");
    SalesLine."Amount Including VAT" := "Amount Including VAT";
    SalesLine."VAT Base Amount" := ROUND("Amount Including VAT"/(1 + (SalesLine."VAT %"/100)),Precision);
    SalesLine."Line Amount" := ROUND("Amount Including VAT"/(1 + (SalesLine."VAT %"/100)),Precision);

But then it keeps us in work!

David
[/code]

mfeirman

Davis,

Thanks for the reply.

My issue is i do not want the intercompany to function as creating sales and purchase orders between companies. All I want to do is to be able to have my A/P go on one company and expenses posted to other companies. the system should recognize this and automatically add intercompany lines to the journal entry to balance the entry by company.

Any ideas?

-Mark

David_Cox

mfeirman wrote:

Davis,

Thanks for the reply.

My issue is i do not want the intercompany to function as creating sales and purchase orders between companies. All I want to do is to be able to have my A/P go on one company and expenses posted to other companies. the system should recognize this and automatically add intercompany lines to the journal entry to balance the entry by company.

Any ideas?

-Mark

After a nights sleep and a train journey to contemplate!

Not sure what you mean, you have IC journals for posting to and moving within the G/L, and the AR/AP Documents of Partner 1 Create AP/AR Documents at Partner 2, so do you want to post the detailed Document in Partner 1, with just the summary postings going to Partner 2, which is just like the Consolidation, but automated.

If this is correct then as standard "no", but with development it could be done, adding a couple of fields to the IC Partner and a mapping table sitting in between, as a Sale at Partner 1 is a Purchase at Partner 2, so you will need to swap the AR and AP accounts.

The options on the IC partner would be IC Sales and IC Purchase by Document or Journal, then in codeunits 80 and 90 when posting the Journal lines, if "IC Sales" by = "Journal" pass the journal line and dimensions to a new codeunit that will create Outbox Journal lines, useing the mapping table to assign the account, then a check in the standard IC functions to stop an IC Sales or IC Purchase outbox documents being created if the "Journal" option is selected.

That is my brief analysis :!:
Or am I way off base :?:

David

MarkD33

David Cox wrote:

mfeirman wrote:

Davis,

Thanks for the reply.

My issue is i do not want the intercompany to function as creating sales and purchase orders between companies. All I want to do is to be able to have my A/P go on one company and expenses posted to other companies. the system should recognize this and automatically add intercompany lines to the journal entry to balance the entry by company.

Any ideas?

-Mark

After a nights sleep and a train journey to contemplate!

Not sure what you mean, you have IC journals for posting to and moving within the G/L, and the AR/AP Documents of Partner 1 Create AP/AR Documents at Partner 2, so do you want to post the detailed Document in Partner 1, with just the summary postings going to Partner 2, which is just like the Consolidation, but automated.

If this is correct then as standard "no", but with development it could be done, adding a couple of fields to the IC Partner and a mapping table sitting in between, as a Sale at Partner 1 is a Purchase at Partner 2, so you will need to swap the AR and AP accounts.

The options on the IC partner would be IC Sales and IC Purchase by Document or Journal, then in codeunits 80 and 90 when posting the Journal lines, if "IC Sales" by = "Journal" pass the journal line and dimensions to a new codeunit that will create Outbox Journal lines, useing the mapping table to assign the account, then a check in the standard IC functions to stop an IC Sales or IC Purchase outbox documents being created if the "Journal" option is selected.

That is my brief analysis :!:
Or am I way off base :?:

David

If I may step in to the conversation for a moment, David.

I think what Mark is trying to say is that NAV's IC functionality is great from an InterCompany Trade perspective. The application does a nice job of automatically creating a Sales Order for an IC Partner1 from a Puchase Order created at IC Partner2. However, that's not what many North American companies are looking for when you bring up the topic of Intercompany transactions.

Here's a North America example of InterCompany transacations. In order to increase efficiency, a parent company receives all subsidiary rent bills at their corporate office. For IC processing to work in this instance, the AP clerk should be able to open a purchase invoice, processing multiple lines (one for each sub) and "tag" each line with the appropriate IC Partner (subsidiary) code. When the transaction posts, the corporate company get a Credit to AP and a Debit to an Intercompany account. The subsidary gets a Debit to Expense and a Credit to an Intercompany account.

In other words, the Parent Company pays the bill and the subsidiary's income statement gets the expense. When the user then runs consolidation, the 2 Intercompany accounts net to zero with the Payable and Expense recorded appropriately on the parent's GL.

Mark

David_Cox

Hi mark

I do understand, what the requirement is, I just may not have made it clear.

It still comes back to the same scenario, post a multi-line purchase document and produce summary IC Journals.
In your scenario one AP document creating AP documents or AR journals to different IC partners, by entering the different IC partners on the line.

"Not as standard".

Where as the system as standard now works on a single AP Document to AR Document relationship.

David

Fisherman

MarkD33 -

This is what I'm looking for. We sell and purchase out of our subidiaries, so they incur the expense or receive the revenues, but we process payables and receivables out of our corporate office. I want to know how to set this up in Navision.

It would be nice if we could use multi-company so that we have complete separation of data. See - we might service different divisions of our customer's company out of several of our subsidiaries, and we have to make sure that each subsidiary is isolated, so that their transactions cannot impact the business that another subsidiary is engaged in.

You said that an add-on is available to do what we're trying to do. Do you have any suggestions?