Intercompany Reconciliation

In cases where parties have mutual obligations, they can offset their claims against each other to settle their commercial obligations. This can be done in Business Central using the Net Customer/Vendor Balances feature.

Establishing a Relationship between Vendor and Customer Cards

To reconcile matching obligations, the counterparty must be both a vendor and a customer.

The connection between a vendor and customer cards is established through the contact card. For example, if a vendor card exists in the system, you can create a customer card from the contact card of that vendor. To do this, go to the contact card page of the vendor and click on Actions > Functions > Create as > Customer. A new customer card identical to the vendor card will be created.

If vendor and customer cards already exist in the system, you can link them by navigating to the contact card of the vendor or customer and clicking on Related > Contact > Organization > Business Relations, then add the business relationship code of the vendor or customer, specifying the relevant vendor or customer number.

Note: The business relationship codes for the customer and vendor should be different. The configuration of business relationship codes for contacts is done on the Marketing Setup page.

Configuring the General Journal Section

To create reconciliation entries in the financial journal, the following settings need to be configured:

• In the Bal. Account Type field, select G/L Account.
• In the Bal. Account No. field, enter the balancing account for recording mutual obligations.

Creating Entries in the General Journal

1. Click the button to open the Search feature and enter General Journals, then navigate to the appropriate link.
2. Open the relevant general journal section.
3. Click Actions > Functions > Net Customer/Vendor Balances.
4. On the report request page, fill in the fields as follows:

Field	Description
Posting Date	Specify the date on which the reconciliation transaction will be recorded.
Description	Provide a description for the reconciliation operations.
Document No.	Enter the document number to be used for recording the reconciliation operation.
Vendor No.	Select the vendor number for which reconciliation needs to be performed.
Calc. By Agreement	Specifies that the calculation of the balances of the vendor and the related customer will be carried out in terms of contracts. If this parameter is enabled, the report page will display the option to filter data by vendor and customer contracts.
Vendor Agreement No.	Defines the filter by the vendor agreement number.
Customer No.	Identifies the relevant customer to the vendor.
Customer Agreement No.	Defines the filter by the agreement number with the associated customer.

5. Click OK. The corresponding entries will be created in the general journal.
6. Click Post.

You can also print a printed form of the reconciliation act from the general journal or the customer/vendor ledger entries by clicking the Print - Reconciliation Act button.