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Multi-company Management with Dynamics 365 Business Central

Manage Multiple Entities within Same Localization with Dynamics Business Central Intercompany Features

The deployment of Microsoft Dynamics 365 Business Central has helped businesses with multiple legal entities ensure robust management within the same environment and localization. Unlike in the past, when it was more complex to get a new company set up, the latest Business Central Intercompany feature has made it much easier and more convenient. Now, you can make the best of the new replication tool to synchronize the organization’s master data and initiate creating intercompany accounts.

Multi-company Management in Microsoft Dynamics 365 Business Central

Once you step out of the core financials and begin using modules, such as Distribution, Manufacturing, Jobs, Service, or other applications integrated with Business Central, setting up these same entities in the other modules gets critical.

Multi-company or intercompany feature in Business Central is a power-packed add-on product. Some of its key features that modern-day businesses can get are listed below.
  • Flexibility in one chart of accounts and financial segmentation
  • An advanced intercompany bridge between two databases, both with multiple entities
  • Shared system and company setup
  • Shared Vendors/ Customers/ Items with entity security
  • Entity or Location associations
  • Entity-wise segmentation of all transactions
  • W9s reported per entity
  • Consolidated financial, data, and trial balance reports
  • User Security by the entity: users can see all entities or just one entity
  • Different invoices, order confirmations, quote, and PO forms by an entity
  • Different bank formats per entity
  • Centralized banking, AR, and AP
  • One API data connection to Azure data lake, and Power BI

Although Single Company in Microsoft Dynamics 365 Business Central is a small subset, it is extensively expandable with multi-company management. Business administrators can make the most of an efficient transaction workflow, powerful filtering capabilities, and a simplified user interface to manage multiple entities in a single instance.  

Benefits of Business Central Multi-location Feature

Small and medium-sized enterprises can leverage the fundamentals of Dynamics 365 Business Central to accelerate their financial close and ensure robust reporting.

This SaaS ERP by Microsoft is embedded with advanced functionalities to streamline accounts receivables and payables. You can witness the automatic reconciliation of accounts, close faster, and report on financials accurately while maintaining compliance as well.

Additionally, it lets you improve forecast accuracy with comprehensive data modeling and analysis across multiple verticals. Here, connecting to an experienced Business Central Consultant can get you customized reports, which you can share via seamless Excel integration.

Once you integrate multi-location modules, you can add more value to your business expansion and growth.
  • You can offer role-based access to your users across all locations to view or update transactions for all or specific locations.
  • Sales personnel can check inventory in real-time across all locations and book sales orders from their mobile devices, and that too, without having to make multiple calls.
  • The procurement or purchase head can monitor stocks lying at various locations, orders in hand, and indents received from each location— right from the main office. Business Central renders the capabilities for purchase planning, purchase order management, and stock transfer from one location to another as per business needs.
  • For the most part, businesses operating from multiple states are required to have multiple GST numbers. Here, Business Central Accounting facilitates maintaining books of multiple GST numbers in a single platform. With such capabilities, you can specify the GST number of each location, and generate GST reports for each GST No.

Consolidations Performed

  • Across subsidiary business organizations with different charts of accounts
  • Across companies with different fiscal years
  • Using either the full amount or a particular percentage of a company’s financial information
  • Across businesses with different currencies

Consolidation for Companies

  • In a similar database as the consolidated company
  • In other Microsoft Dynamics Business Central/NAV databases
  • In other accounting and business management software solutions
  • In XML format
Case Study: How NavisionIndia Assisted in Multi-company Management with Dynamics 365 Business Central?
Intercompany features

Company Structure: – Company with global presence.

The Problem: Efficient Management of Multiple Companies

Our client encountered challenges in managing multiple entities and the issues were getting complex with the expanding business operations. For example, two or more subsidiaries of a company frequently do business with each other. 

They needed a solution that would enable them to distribute sales and purchasing documents, as well as general journal entries, across their satellite offices, sales branches, and subsidiary companies. The goal was to reduce data entry efforts, save time, and increase overall operational efficiency.

Solution: – Business Central’s Intercompany Feature

To address the challenges of managing multiple companies efficiently, the company opted to use Microsoft Dynamics 365 Business Central’s Intercompany Feature. This solution provided them with a comprehensive way to handle intercompany transactions seamlessly. The Intercompany Feature allowed the trading company to define mappings between the items and chart of accounts of each entity involved (e.g. Company A and Company B). When one subsidiary, say Company A, required items from another subsidiary, Company B, it could create a purchase order in Business Central and send it to Company B.

In Company B’s Business Central database, the system automatically generated a corresponding sales order with the appropriate items or general ledger (G/L) accounts, based on the predefined mappings. This streamlined process eliminated the need for manual re-entry of data, ensuring accuracy and consistency throughout intercompany transactions.

When Intercompany functionality is set up in Business Central, there are two ways transactions between companies in the same database can interact with one another:

  • The first uses Intercompany Inboxes and Outboxes, where a user manually reviews incoming transactions for sales, purchases, and journal entries and chooses which to accept and reject.
  • The second is by selecting which entities to automatically accept those transactions from, which means the related sales documents, purchase documents, and journal entries will be created in the other company automatically. This assumes the related entity will always accept these documents and is very common when the same users are processing related documents. It removes the step of accepting the documents through the inbox/outboxes.

Intercompany focuses on sales and purchase documents and general journal lines, and allows transactions between multiple Business Central databases. For example:

  • In different countries/regions
  • Multiple currencies
  • Different charts of accounts
  • Different item numbers

There are four main benefits to the intercompany functionality:

  • Increased productivity as a result of time saved and simplified transactions
  • Minimized mistakes with the one-time entry of information and system-wide, automated updates
  • Complete audit trail and full visibility into business activities and transaction histories
  • Efficient, cost-effective transactions with affiliate and subsidiary companies

Conclusion: Managing multiple companies can be a complex task for businesses with a global presence. Microsoft Dynamics 365 Business Central’s Intercompany Feature provided our client with a robust solution to streamline intercompany transactions, ensuring data accuracy, reducing data entry efforts, and enhancing overall operational efficiency.

By leveraging the power of Business Central’s Intercompany Feature, the company was able to improve collaboration between subsidiaries, optimize resources, and gain a competitive edge in the market. Embracing such innovative solutions can propel companies toward success in today’s dynamic and interconnected business landscape.

At Navisionindia, we let the business drive maximum business outcomes with the Business Central Intercompany feature and assisted them in driving more efficiency than before. Along with time-saving, cost-saving, and highly scalable solutions, we rendered unmatched support services to ensure business continuity even while eliminating the challenges and beyond the implementation lifecycle.

For more details on Dynamics 365 Business Central Intercompany Features, write to us at  info@navisionindia.in  Or Schedule A Demo