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One tenant, many companies: what that really means
A Business Central environment can contain as many companies as you need. Each company has its own general ledger, customers, vendors, items and number series, and its own tax setup, so a Delaware holding company and an Arizona operating company can live side by side without mixing their books.
What they share is the tenant: the same users, the same installed extensions and the same update schedule. A user switches company from the settings menu, and permissions can be granted per company, so a bookkeeper at one subsidiary need not see payroll entries at another.
Setup data does not copy itself. New companies are usually created by copying a template company or by applying configuration packages, which is why settling the master design first saves so much rework.
How an intercompany sale travels between two companies
- 1
Selling company raises the order
Company A creates a sales order to a customer card that is linked to an intercompany partner code representing company B.
- 2
Posting creates an outbound IC transaction
When A posts, the document is placed in its intercompany outbox, or sent straight on if automatic sending is switched on in intercompany setup.
- 3
Buying company receives it
The transaction lands in B's intercompany inbox. B accepts it, and Business Central creates a purchase invoice using the vendor linked to company A.
- 4
Items and accounts are translated
Item references and the intercompany chart of accounts map A's lines to B's items and G/L accounts, so each side posts in its own terms.
- 5
Both ledgers agree
A's receivable and B's payable carry matching amounts and document numbers, which makes elimination at consolidation straightforward.
Group structures we set up
Shared services charging
A head office that runs payroll, IT or finance for sister companies recharges them each month through IC general journals.
- ✓Monthly management fees
- ✓Allocated overhead
- ✓IC journal templates
Maker and distributor
One entity manufactures and sells to a separate distribution entity, with IC sales and purchase documents carrying item detail.
- ✓IC sales and purchase orders
- ✓Transfer pricing on price lists
- ✓Item reference mapping
Holding company view
A consolidation company pulls balances from each business unit to produce group statements with eliminations.
- ✓Business units
- ✓Consolidation accounts
- ✓Elimination entries
Foreign subsidiaries
A Canadian or UK subsidiary keeps its books in local currency while consolidation translates it into dollars at the right rates.
- ✓Local currency ledgers
- ✓Average and closing rates
- ✓Translation differences
Intercompany postings and consolidation do different jobs
Traps in multi-entity setups
- ✓Giving each company its own chart of accounts, which forces a mapping for every account at consolidation.
- ✓Creating dimension values differently in each company, so group reports by department never add up.
- ✓Posting intercompany charges as ordinary vendor invoices, which leaves nothing to match or eliminate.
- ✓Forgetting that extensions install per environment, so an app needed by one company is present, and may need setup, in all of them.
- ✓Leaving IC transactions sitting in inboxes for weeks, then discovering mismatched balances during the audit.
Multi-company questions from group finance teams
Do we pay for Business Central separately for each company?
No. Business Central full users are licensed per user, and a licensed user can access every company in the tenant, subject to the permissions you grant. Storage grows with each company, so very large groups keep an eye on database capacity. We do not quote Microsoft pricing, but your licensing partner can confirm the numbers for your structure.
Should subsidiaries be separate companies or just a dimension?
If the entity files its own tax return, has its own bank accounts or needs its own audited statements, it should be a separate company. If it is only a division or branch for management reporting, a dimension is simpler and avoids intercompany postings altogether. We usually settle this entity by entity in the design stage.
Can intercompany work between different currencies?
Yes. Each company can have its own local currency, and IC documents carry the currency code, so a dollar invoice from the US company arrives in the Canadian company as a dollar purchase invoice. Exchange differences then follow each company's normal currency rules. Consolidation later translates the foreign company's balances at the rates you specify.
How is the consolidation company kept up to date?
Each subsidiary is set up as a business unit in the consolidation company, and a consolidation run imports balances for the period you choose. You can rerun it after late adjustments. Eliminations for intercompany balances are posted in the consolidation company, not in the subsidiaries.
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