Intercompany postings are useful when you manage multiple companies at the same time and those companies do transactions between them (that is, a subsidiary company buys or sells products or services to another subsidiary company).
The intercompany functionality allows you to define the mapping between the items and chart of accounts of company A and the items and chart of accounts of company B. When company A wants to buy items from company B, company A creates a purchase order and then sends it electronically to company B. In company B, a sales order is automatically created with the appropriate items or G/L accounts. This way, the information is introduced only once and carried to the corresponding companies in the corresponding way.
Intercompany postings use a number of entries and documents for the relevant transactions:
General journal entries
Purchase and sales orders
Purchase and sales invoices
Credit memos
Return orders
To set up Intercompany postings, the company...