Why it matters for manufacturers
- A supplier can invoice the wrong entity, which puts GST credits and cost in the wrong place.
- Group-wide suppliers such as steel and gas are bought on one agreement but billed to several plants.
For manufacturers in Dynamics 365 Finance
- When a sales order in the purchasing company triggers an intercompany purchase order, the vendor needs the customer company and customer account set up. The customer needs the vendor company and vendor account.
- For an intercompany purchase order the net amounts on the vendor and customer invoices must match. That rule overrides invoice matching approvals and the price tolerance percentage. Microsoft's example flags a 2 percent tolerance breach when the net price is wrongly changed from 45.00 to 54.00.
- Set Post invoice with discrepancies to Require approval. Both the intercompany posting rules and the matching rules must then be met before the vendor invoice posts.
What Dynamics 365 Finance does on its own
Finance supports intercompany accounting between legal entities and consolidation into a separate consolidated legal entity. Intercompany accounting pairs legal entities with Due from and Due to accounts, and intercompany purchase orders can be matched to invoices within set rules.
For intercompany purchase orders the net amounts on the vendor and customer invoices must be equal. That rule overrides invoice matching approvals and price tolerance.
What you need and the setup steps: Multi-entity accounts payable for Dynamics 365 Finance.
Example
Example Gas Supplies sends one invoice covering bottled gas for Plant 1 in Sydney and Plant 2 in Brisbane, which are separate entities.
| Line | Amount | What the check finds |
|---|---|---|
| Gas cylinders, Plant 1 Sydney | $3,200.00 | Bill to Example Manufacturing East Pty Ltd |
| Gas cylinders, Plant 2 Brisbane | $2,100.00 | Bill to Example Manufacturing North Pty Ltd |
| Cylinder rental, shared | $300.00 | Split by agreed ratio |
Each plant's cost is coded to its own entity and shared rental is split by the agreed ratio. Each entity claims only its own GST.
Common mistakes
- Entering the whole invoice in one entity and fixing it later with an intercompany journal.
- Using different supplier names for the same supplier in each entity, so group spend cannot be added up.
Step-by-step guides for Dynamics 365 Finance
- How to close the month in accounts payable in Dynamics 365 Finance
- How to set up vendor invoice approval in Dynamics 365 Finance
What Pulsify adds
Pulsify gives each company its own address, suppliers and approval rules, with one login across all of them. Pulsify connects to Dynamics 365 Finance. We set up the connection for you. More about multi-entity accounts payable in Pulsify or Pulsify for manufacturers.
More help
- Multi-entity accounts payable in Kinetic for manufacturers
- Multi-entity accounts payable in CloudSuite Industrial for manufacturers
- Multi-entity accounts payable in NetSuite for manufacturers
- Duplicate invoice checks in Dynamics 365 Finance for manufacturers
- PO matching in Dynamics 365 Finance for manufacturers
- Supplier price checks in Dynamics 365 Finance for manufacturers
- Invoice approvals in Dynamics 365 Finance for manufacturers
- All Dynamics 365 Finance how-to guides
Sources
Last checked 2026-10-19.
Common questions
What happens when an intercompany plant invoice does not match in Finance?
The net amounts on the vendor and customer invoices must be equal. This overrides tolerance and approvals. Finance flags the price difference on Invoice matching details and the invoice cannot post until the net amounts agree and matching rules are met.
Should each entity have its own supplier record?
Usually yes. Give each entity its own record for the supplier, with the same ABN, name and terms. Matching names let you add up group spend on one supplier without mixing the books.
How does Finance post between legal entities?
Through intercompany accounting. You create pairs of legal entities with Due from and Due to accounts and a journal name. Intercompany journals then work for daily, vendor invoice and payment journals.
Pulsify setup guides
Want this done for you?
Book a call to see how Pulsify handles multi-entity accounts payable in Dynamics 365 Finance for manufacturers.