Intercompany Accounting in Dynamics AX 2012

I was going through the requirements for the client that I am working for and it so happened that they require the intercompany functionality. I have never before done this, hence started playing around with the AX 2012 R2 system in my oracle virtual box. This is what I concluded.

1. Create the Receivables and Payables Ledger accounts in the Chart of Accounts of all the involved companies.
2. Create the Customer and Vendor posting profiles. There should be separate lines for all the intercompany Customers and Vendors, if the client wants to track the intercompany funds separately for each company.
3. In step 2, select the accounts defined in step 1 for each individual line in the setup section of the posting profile record.
4. You are ready to go for intercompany Sales Orders and Purchase Orders now. The settings are such that the transactions will be tracked individually for each associate company.
5. The same settings work well when used for Free Text Invoice. Out client wanted invoice to be created for any non-trade transaction between the two associate companies. Free text invoice was a very good suggestion in that case.
6. Now suppose the companies are passing intercompany journals as well, then they can do so by passing a General Journal, but selecting the different company while defining the offset account.
7. However this  ONLY works when the Intercompany Accounting setup is defined in the GL module.
8. Navigate to GL > Setup > Posting > Intercompany Accounting and define the same payables and receivables account for the appropriate companies that were created in step 1 above. Also the user needs to define the journal that will be automatically posted, from the drop down. This can be a normal General Journal
9. Some may also insist creating a separate Intercompany Journal, so that its easy for tracking. Imagine all types of journals being posted as General Journal. Its difficult to track the purpose. Hence it is advisable to create a separate Intercompany Journal.
10. But remember the same setup has to be done in all other associate companies so that this functionality works well.
11. Once the setup is complete and the General Journal is posted, the system posts two vouchers one in the parent company and other in the associate company.

For e.g.:

Company A has to book some expense on Company B, then a General Journal can be created in Company A:

Dr  Car Expense 120 (Company B)
   Cr  Bank 120 (Company A)

When the above journal is posted, then system automatically posts two transactions:

Company A:

Dr Receivables from B  120
    Cr Bank 120

Company B:

Dr Car Expense 120
   Cr Payable to A 120

This can then be settled by passing a payment journal OR this can be settled by a similar reverse journal from Company B.

As far as the intercompany Sales and Purchase orders are concerned they will behave exactly same as the normal trade Sales and Purchase orders, only difference being there amounts will be tracked separately in the summary / control accounts defined in the customer and vendor posting profiles. Also the payments will also be done through the normal payment journals.

Thanks!

AXAPTAMANIAC