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the Enterprise
and Oracles New
Intercompany Functionality
11.5.9 and 11.5.10
Internal Sales Orders
Hans Kolbe, Celantra Systems Inc.
About Us:
Celantra Systems provides international program management services
with a strong focus on multi-org, inter-company, and global compliance and
implementation issues. Celantra Systems also offers specialized software
tools to augment application functionality in global implementations.
Celantras consulting and technical services can add valuable impact in the
integration of Oracle Apps with boundary systems such as SAP, People
Soft, trade and customs compliance systems and others. Former and
current clients include Xerox, Tektronix, British Telecom, Assa Abloy,
Yahoo, Texas Instruments, PPG, Dionex and others.
Hans Kolbe has managed and advised software implementation projects
for over 15, global projects for over 8 years. His extensive knowledge on
Oracle applications is combined with a formal background as a German
attorney, trained in international and comparative law.
Intercompany Transactions
Overview
All of these entities may operate in one and the same country.
In the multi-national environment we need to add Foreign subsidiaries and
Foreign Branches registered in other jurisdictions in any of the
categories.
Operational Entities
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very quickly
Operating Unit most sub-ledgers (AR, OM, AP, PO, PA, CM,
OPM)
Inventory Org INV, WIP, part of PO
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Internal Drop-Ship
Customer
Bill-to
Ship-to
Shipment
Entity A
Entity B
Selling Entity
IC Invoice
INV-Org A
OM: Book Sales Order - Reserve
with Ship-From
Warehouse of Inv Org B
Shipping Entity
INV-Org B
OM: Pick Release, Ship-Confirm,
Inv Interface, Costing
AR: Create IC Invoice To Entity A
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Internal Fulfillment
Customer
Bill-to
Ship-to
Entity A
Shipment and IC
Invoicing
Selling Entity
INV-Org A
PO: Internal Requisition
PO: Create Internal Order
AP: Create IC AP Invoice from
Entity B
Entity B
Shipping Entity
INV-Org B
OM: Import Internal Sales Order
OM: Reserve, Pick Release, ShipConfirm, Inv Interface, Costing
AR: Create IC Invoice To Entity A
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External Drop-Ship
Customer
Bill-to
Ship-to
Shipment
Vendor
of Entity B
Purchase Order, AP
Invoice
Entity A
Entity B
Selling Entity
IC Invoice
INV-Org A
Shipping Entity
INV-Org B
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Non-Shippable Items
Non-Invoiced Items
Internal requisitions and fulfillment Sales Order documents show incorrect transfer
price
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Break Discussion
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New Accounting
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Profile Options
CST: Transfer Price Option - Site Level Only
Options:
Yes, Price as Incoming Cost = complete IC price will be directly applied
against cost base in receiving org, either as Purchase Price Variance (if
Standard Cost) or updating the average cost.
Yes, Price not as Incoming Cost = the intercompany markup will be booked
to the new profit-in-inventory account on the receiving side
No = old accounting continues
CST: Intercompany Invoicing for internal orders site level: YES/No (user
option does not work?)
CST: Advanced Pricing for internal orders - Site Level, (Does user option
work?)
Other important options:
Tax: Invoice Freight as Revenue
Tax: Inventory Item for Freight
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The Accounts
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Process Steps
- Rec. Org: Internal Requisition
- Ship Org: Process Sales Order
- Ship Org: Shipping
- Ship Org: Intercompany AR
- Rec. Org: Intercompany AP Invoices
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Menu path: OM, Order Management, Orders/Return, Import Orders, Import Request
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Internal Sales
Orders are
immediately
booked, not
entered status
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Sales Order Price is NOT from price list, but cost of shipping org without transfer credit. ISSUE
for documents and reports!
Puzzler: Price is: 0.50576 per unit; on Requisition it was 0.32568
Hint: The price is shown in CHF, the functional currency of shipping organization versus while the
receiving organization has a functional currency of EUR.
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Tax Code shown here defaults from Internal Customer Ship-to Site; it will not be used for IC
Invoicing; only Bill-to Site tax will be used. Watch out when printing documents!
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The IC AR Invoice
After Run Master Auto-Invoice Program: Invoice is created
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The IC AP Invoice
Lines
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Break Discussion
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Setup Elements
-
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Shipping OU:
Internal Customer and Sites - Addresses
Same Customer No.
from IC Relationship
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Receiving OU:
Internal Customer and Sites - Addresses
Same Customer No.
from IC Relationship
NOTE: We have to create customer bill-to and ship-to sites for the receiving entity within
the receiving operating unit. It must be tied to the inventory location and inventory
organization. This bill-to and ship-to site is used for the processing of the internal order
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Receiving OU:
Internal Customer Ship-to Site
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Receiving OU:
Internal Customer Ship-to Site, OM Tab
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Receiving OU:
Internal Vendor Site
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Profile Option CST: Transfer Price should be set for entity to entity pair. If different
intercompany policies current setting is impractical
Sales Order Price is not IC Price: needs customization of external documents,
Ship-to Address is not printed on invoice: needs customization of external
documents,
Duplicate IC Invoices for old internal shipments resolved (needs patch)
Tax functionality: only based on Bill-to account; no ship-to account available.
Needs review. May be sufficient.
Accounting Definition: Profit-In-Inventory account needed, IC COGS accounts
(changes in workflow?); (client extension).
Freight on IC Invoices: Tar outstanding with development Resolved. User needs
to manually unfreeze pricing on each internal sales order and set to partial
calculate.
Accounting IC AP Invoice: Accrual debit cannot be configured to match shipping
network detail (IC Relationship).
Implementation: only big bang with site wide profile option. Can we continue halfmanual internal sales order invoicing? IC invoicing for internal sales orders needs to
be switched globally. However, the invoices are selectively generated by shipping
organization. Therefore specific shipping organizations do not need to participate.
However the shipment accounting will change for all organization across the Oracle
instance.
Client extensions can be made to Costing workflows: Appendix C in Costing
Manual R11.5.10; h
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CST: Transfer Price Option, No: will leave old accounting with
balancing sheet accrual entries. Set at Site Level, i.e. for all entities.
INV Intercompany invoicing for internal orders = YES at User Level.
Automatic IC Invoicing from Price List can be activated where needed.
Manual invoices can continue where desired.
Additional restriction is possible by leaving IC relationship blank. Then
no IC invoices are generated.
Automatic IC AR and AP invoice works with accounting from Shipping
Network mapping IC AR account and Transfer Credit account to
COGS.
Incoming markup can be booked either to PPV account or matched up
with Material overhead account on receiving side.
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Thank you !
Hans Kolbe, Celantra Systems
hanskolbe@celantrasystem.com
+ 1 (415) 730 - 1131
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