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Centralized Payments and Expense Allocation in Business Central Online

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Posted on by haroonattari

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Hi Everyone,

I would appreciate it if anyone could confirm the following regarding Business Central Online:

1. Does BC Online support centralized vendor payments, allowing the parent company to pay vendors of its subsidiary or sister companies?
2. Does BC Online support receiving payments from a subsidiary or sister company's customer via the parent company?
3. Does BC Online support allocating expenses from a shared invoice for a service between the parent company (50%) and two subsidiary or sister companies (25% each)?

Thanks in advance for your insights!

Best regards

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Dynamics 365 Business Central

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OussamaSabbouh 5,796 on at

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Hello,

All three scenarios are supported in Business Central through Intercompany Posting:

1. Centralized Vendor Payments – Parent company can pay vendor invoices of subsidiaries using intercompany vendors/customers, with automatic due-to/due-from entries.

2. Receiving Payments for Subsidiary Customers – Parent company can receive payments on behalf of subsidiaries via intercompany customers.

3. Allocating Shared Expenses – Shared costs (e.g., 50%/25%/25%) can be split using Intercompany General Journals or Purchase Invoices with intercompany partner codes.

Regards,

Oussama Sabbouh

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Jainam M. Kothari 15,639 Super User 2025 Season 2 on at

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Hello,

1. Centralized Vendor Payments: Yes, Business Central Online supports centralized vendor payments. You can configure an organizational hierarchy and intercompany setup that allows the parent company to pay vendors on behalf of subsidiaries or sister companies, with proper due-to/due-from entries automatically created. [learn.microsoft.com]

2. Receiving Customer Payments via Parent Company: Yes, Business Central Online allows the parent company to receive payments from customers of subsidiaries or sister companies using intercompany transactions. This requires setting up intercompany partners and mapping accounts and dimensions across entities. [learn.microsoft.com]

3. Allocating Shared Invoice Expenses: Yes, Business Central supports allocating expenses from a shared invoice across multiple companies using intercompany general journals or purchase documents. You can distribute costs (e.g., 50% to parent, 25% each to subsidiaries) and the system will handle the intercompany postings accordingly. [learn.microsoft.com]

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Valentin Castravet 31,342 Super User 2025 Season 2 on at

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For points 1 and 2, you’ll definitely need a third-party add-on in Business Central. The standard intercompany functionality doesn’t support applying payments to invoices. Point 3, however, can be done using standard Business Central features.

Valentin Castravet
Work: Zander ERP Services
Blog: Dynamics 365 Business Central Insights
LinkedIn: www.linkedin.com/in/valentin-c-0500a247/

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haroonattari 2,346 on at

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@OussamaSabbouh

@Jainam M. Kothari

Let me explain the requirement in more detail. If you've worked with AX 2012 R3 or Dynamics 365 for Finance & Operations, you've likely seen this setup:

You can select Bank as the debit account type for the parent company and Customer as the offset account type for the subsidiary company. This lets you choose a bank account from the parent and a customer account from the subsidiary.

When you post the entry:

It increases the parent's bank account balance.

It reduces the subsidiary's accounts receivable.

It also uses the configured "Due to" and "Due from" accounts for both companies:
crediting the same amount in the parent and debiting it in the subsidiary.

I don't think this type of entry is possible using Business Central's intercompany feature. Am I right?

Please let me know if my understanding is correct.

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Jainam M. Kothari 15,639 Super User 2025 Season 2 on at

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May this can help : https://learn.microsoft.com/en-us/dynamics365/business-central/intercompany-allocate-costs

https://onlinehelpcrm.azurewebsites.net/HelpFiles/MEM_D365BC_Help/Content/Topics/NAV_MEM/icbridge/icbExpenseExample.htm

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Rishabh Kanaskar 6,148 on at

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Hi @haroonattari,

You’re right. Business Central does not support a single cross‑company voucher where you pick the parent’s Bank and the subsidiary’s Customer and have it auto-post with Due To/Due From like AX/D365FO.
BC’s intercompany lets you exchange documents and post reciprocal IC entries, but payments must be posted within each company’s own ledger:

> No cross-company bank account selection on a single entry.
> No direct settlement of a subsidiary’s AR by posting a parent bank receipt in the same voucher.
> Due To/Due From can be posted via IC documents or IC general journals, but AR/AP settlement still occurs inside the subsidiary.

Use a third-party centralized payments solution. Out of the box, BC cannot replicate the AX/D365FO centralized payment pattern.

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