Setting up Intercompany Trade in Dynamics AX 2012

You all must be familiar with what intercompany is. Here I am going to tell about the setups that are required to run the intercompany trade and the intercompany trade process.

I will be using a scenario throughout this blog and I will map it on Contoso.

For intercompany scenario, we will be needing two companies. CEU is a company that is involved in production of finished goods and CEE is a company that sells the product to the end consumer. So in order to sell it to the end consumers, CEE has to purchase the finished goods from CEU Company.

Let’s have a look at how we can map this in AX.

The first step is to build a trading relationship between the two companies.

For this first create CEU Company as a Vendor in CEE Company.

Then create CEE Company as a Customer in CEU Company.

To set trading relationship, go to the CEE Company

Navigate to Procurement & Sourcing > Common > Vendors > All Vendors


Select CEU Vendor, click the General tab and then click Intercompany in the set up on the Action Pane




Click Trading Relationship




In Sales Relation, select CEU Company and select the Customer account that is CEE in my account



Click Activate to activate the relationship between the two companies.



This makes the relationship to be activated in both the companies,

Now to record the sales and purchases i.e. the trade between the two companies, following procedure will be followed:

An Intercompany Purchase Order will be created in CEE Company to procure Finished Goods from CEU Company

In CEE, Open Procurement and sourcing > Common > Purchase orders > All purchase orders.





Click Purchase order in the New group on the Action Pane to create a new purchase order.




In the Create purchase order form, select the CEU Vendor. Click Yes to copy the details mentioned on the vendor form to the purchase order.




Click OK, an Infolog will appear that an Intercompany Sales Order has been created.




In the Purchase Order Lines, Select the Item number and Quantity information, if required select Product Dimensions, Site and Warehouse.



Note: only Released Products can be used in intercompany orders.

After the Intercompany purchase order is created, Click Confirm on the Action Pane to save and Confirm the purchase order.





Purchase Order Status at Confirmation will be of an Open Order



Note: when the Purchase Order is Created, the Intercompany Sales Order is automatically Created in the vendor company

On Purchase Order form, in the Manage Tab, in Intercompany Tracing Click Intercompany Sales Order to view Intercompany sales order:




Sales Order form will pop up, which is the auto generated order. The Sales Order will be generated in CEU Company





To Confirm an Intercompany Sales Order, In the Sell tab of the Action Pane, click Sales Order Confirmation in the Generate group.



Click OK to generate the order confirmation.


 Note: Confirming the sales order is optional

Sales Order Status on confirmation will be of an Open Order





To generate a packing slip, In the Pick and Pack tab of the Action Pane, click Packing slip in the Generate group. The Packing slip posting form opens.




In the Posting Packing Slip form, in the Quantity field, select the All option. Select the Print Packing Slip check box to Print the packing slip and then Click OK on the Posting dialog box.



Sales order Status will now change to Delivered




Note: Sales order status will change to delivered only if the quantities on the packing slip equals the ordered quantities

On the posting of the pakcing slip, physical on-hand inventory gets reduced. But this of course depends on the setups that we have done for the item model group that we are using.

Now to generate an invoice, In the Invoice tab of the Action Pane, click Invoice in the Generate group



Note: On product receipt number and the invoice number, packing slip number will automatically get updated.

Sales Order status will now change to Invoiced



Note: Sales order Status will change to Invoiced only if the full ordered quantity is Invoiced.

Invoice form will appear, in Quantity field, select the Packing Slip option to generate invoice of the quantity mentioned in the Packing Slip and click OK.

Note: you can select other available options as well depending on your process and requirement.




Now generate product receipt to confirm that intercompany item is received in the purchasing company i.e. CEE

In the Receive tab of the Action Pane, click Product Receipts in the Generate group. The Product Receipt form opens.




In the Product receipt form, in the Quantity field, select the Ordered Quantity or any other available option according to your requirement. Select the Print Product Receipt check box to print the product receipt and then Click OK on the Posting dialog box.



Note: The packing slip number gets automatically appeared on the product receipt

When the item is received, In the Invoice tab on the Action Pane click Invoice in the Generate group





A Vendor Invoice form will appear in which Invoice Number will automatically get updated.




Click Post to post the Invoice.



Purchase Order Status will now change to Invoiced


I hope this will be useful for you, thanks for reading it.

I will get back to you with another topic soon :)