Intercompany Expense Reports in Microsoft Dynamics AX 2012

A term Intercompany is used to describe activities that are conducted between two or more related internal legal entities with common control, i.e. in the same enterprise.

It is a very common scenario that an employee submits an expense report that just lists all his or her expenses for a week or a month. Some are project related expenses and some are not. A worker can travel to a sister company to perform some tasks and it could be that the sister company is required to pay for the expenses occurred during the trip. Then the expenses need to be charged to a project or ledger of the borrowing legal entity: the sister company is considered a borrowing entity and the worker’s company is a lending one.

After all, there is an expense report for multiple projects and some of them are for a different from worker’s legal entity.

Project Controller

A project might be assigned a Project controller – a person who is financially responsible for the project. At assignment on the Project form, a Project controller is selected from the list of workers from the current company:

assigning a project controller dynamics ax

Expenditure reviewers are set in Travel and expense > Setup > Policies menu:

setting expenditure reviewers dynamics ax

A Project controller might be the one who approves expenses submitted to a project. When a Project controller is an approver for expense reports, the workflow approval task is assigned to a participant Project controller:

assigning workflow approval task dynamics ax

Ultimately, if an expense report has multiple lines for multiple projects, there could be more than one Project controller per expense report.

Intercompany Approvals of Expense Reports

In case of multiple lines expense report with multiple projects on lines, project managers can be from different legal entities. The intercompany setting on Travel and expense parameters is on the General tab:

allow intercompany expenses dynamics ax

When checked, it allows to mark an expense report as intercompany:

checking intercompany expense box dynamics ax

Then a prompt for a Legal entity comes up to be entered on the next prompt to start a line:

select legal entity expense category dynamics ax

The lines grid shows multiple legal entities:

multiple legal entities expense lines dynamics ax

If Project controllers are approvers in the expense reports workflow, each project and therefore each line might have a separate approver. And if the expense report is intercompany (the report is submitted in one company, but a line is under a different company), Project controllers might be workers from different companies.

An error was received at the approve step for an intercompany expense report:

Stopped (error): X++ Exception: Participant token ‘Project controller’ does not resolve to any user

The error is a known issue for Microsoft and there is a hot fix KB 3057725 that is only for AX 2012 R3. The link to the hot fix is here.

However, setting up the worker’s record for the Project controller as an employee in both companies will avoid the error: the expense reports can still be submitted with lines for different legal entities. That provides a convenience of submitting all expenses in one document.

Have other Microsoft Dynamics AX or inquires or needs? Visit our Help Desk for AX page to see how our experts can help!

For more information please contact Ellipse Solutions at info@ellipsesolutions.com or by calling our corporate office at (937) 312-1547.