Centralized Purchase Orders In D365 F&O And Allocating Expense to Other Legal Entities

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Posted on by PaladinSteve

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We have multiple legal entities set up for our Corporate Office and Manufacturing Plant sites. Our IT department, which resides under the Corporate Office legal entity, needs to be able to create purchase orders (we do not use a purchase requisition process) in the Corporate legal entity, but spread the costs of those PO lines to the plants.

Is there any out of the box functionality in D365 F&O/SCM to allow for this? I don't see any way to select a company on the PO line, and while I can show the company under Distribute Amounts for the line, it doesn't seem to be changeable.

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Dynamics 365 Finance

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André Arnaud de Cal... 300,915 Super User 2025 Season 2 on at

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Hi PaladinSteve,

It is not possible to just allocate the costs to other legal entities. The manufacturing companies should receive the goods and value them by posting a purchase order invoice.

In case the corporate office is buying the raw materials, you can consider using Intercompany orders. The manufacturing company places an order with corporate. In the corporate office, an intercompany sales order is created. They can then collect item requirements and place purchase orders with their vendors.

Once the goods are received, the sales order can be posted which will be linked with the intercompany purchase order in the manufacturing company.

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PaladinSteve 290 on at

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Thank you for responding, Andre.

This isn't for raw materials. This is for IT supplies, things like computers or software licenses. We allocate the costs to our various sites on a percentage basis, rather than based on any kind of actual consumption. The licenses, in particular, are things we procure at the company headquarters level. It simply isn't feasible for each site to issue individual purchase orders for them.

Unfortunately, it sounds as though this isn't feasible and we'll have to continue with doing manual monthly allocations. It does sound like an opportunity for me to suggest an Idea.

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André Arnaud de Cal... 300,915 Super User 2025 Season 2 on at

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Hi PaladinSteve,

Thanks for the clarification. As you mentioned manufacturing plant sites, I assumed it was about a centralized purchasing department for raw materials. My bad.

For your requirement, there is indeed no standard feature. You can create a general journal and post IC transactions, but this is not automatically created from the purchasing process. It is also not aware of any percentage split. Apart from a manual process, you can also consider a customization.

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Frank Hamelly | MVP... 46,625 Super User 2025 Season 2 on at

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My company has IP that leverages project accounting to allocate expenses across legal entities, where the Project is configured in the 'corporate' entity and the receiving entities are setup as Funding sources in the project. When billing is run periodically, the costs are "allocated" to the receiving entities via sales invoices. This concept may be overkill, but I wanted to share it as food for thought for you.

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