Intercompany Setups

Intercompany Transactions are the transactions between two legal entities related to same Organization. Following are the setups need to be defined for Intercompany Transactions.

Selling Operating Unit: Vision Japan

Shipping Operating Unit: Vision Operations

Step1: Define Transaction Type

Responsibility: Receivables Manager, Vision Operations

Navigation: Setup → Transactions → Transaction Type

Define New transaction type as shown below.

 

Step2: Assign Document Sequence to new Transaction Type (Defined in Step1) 

Responsibility: General Ledger Manager, Vision Operations

Navigation: Setup : Financials → Sequences → Document → Assign

Assign a document sequence to the transaction type 'Intercompany' as shown below.

 

Step3: Define Intercompany Transaction Flow and Intercompany Relations

Responsibility: Inventory Manager, Vision operations

Navigation: Setup → Organizations → Intercompany Transaction Flows

Define Intercompany Transaction flow and Intercompany Relations as shown below.

Mandatory Setups to Check:
1. Make Sure there are no security rules defined when shipping the item from other Operating unit and Auto Accounting rules are defined(for Selling OU) to default the balancing segment values with Table Name as Standard Lines(Which will get the values from Standard line item or Inventory Item used)

Path for Security Rules:

Responsibility: General Ledger Responsibility

Navigation: Setup → Financials → Flexfields → Validation → Security → Define

Path for Auto Accounting:

Responsibility: Receivables Responsibility

Navigation:  Setup → Transactions → Auto Accounting

2. Make Sure Shipping parameters are defined for both Shipping and Selling operating units.
 

Responsibility: Order Management Responsibility

Navigation: Shipping → Setup → Shipping Parameters

3. Make Sure that the COGS account is assigned to the Transaction Type used for SO in Selling Organization.

Responsibility: Order Management Responsibility

Navigation: Setup-> Transaction Type 

4. Make sure that a value is assigned for System parameter 'Inventory Item For Freight'

Responsibility: Order Management Responsibility

Navigation: Setup → System Parameters → Values

Intercompany Transaction Process:

1. Create and Book Sales Order:

Responsibility: Vision Japan Order Management Responsibility

Navigation: Orders, Returns → Sales Orders

Create a Sales Order with Vision Operations Shipping Warehouse and book the order as shown below.

 

2. Release the Order and Ship the Item

Responsibility: Vision Operations Order Management Responsibility

Navigation: Shipping → Release Sales Orders → Release Sales Orders

Release and ship the order. Then notice the transaction status as 'Shipped' or 'Interfaced' on Shipping Transactions form as shown below.

Navigation: Shipping → Transactions

 

3. Run Workflow Background process

Responsibility: Vision Japan Inventory Responsibility

Navigation: Workflow Background Engine

Run Workflow Background Process.

4. Run Auto Invoice Master Program to create Customer Invoice

Responsibility: Vision Japan Receivables Responsibility

Navigation: View → Requests → Auto Invoice Master Program

The invoice created is shown below.

Navigation: Transactions → Transactions

5. Create Intercompany AR Invoice

Responsibility: Vision Operations Inventory Responsibility

Navigation: Reports → Intercompany Invoicing

Run the Program 'Create Intercompany AR Invoices' to create Intercompany AR invoice.

6. Import Intercompany AR invoice

Responsibility: Vision Operations Receivables Responsibility

Run Auto Invoice Master Program with parameter Source as 'Intercompany'. The Intercompany invoice created is shown below.

Navigation: Transactions → Transactions

7. Create Intercompany AP Invoice

Responsibility: Vision Japan Inventory Responsibility

Navigation: Reports → Intercompany Invoicing

Run the Program 'Create Intercompany AP Invoices' to create Intercompany AP invoice.

8. Import Intercompany AP invoice

Responsibility: Vision Japan Payables Responsibility

Run Payables Open Interface Program with parameter Source as 'Intercompany'. The Intercompany AP invoice created is shown below.

Navigation: Invoices → Inquiry → Invoices

Possible Errors while making Intercompany Transactions:

1. Please correct the revenue account assignment 

2. INCIAP - Create Intercompany AP Invoices Terminated By Signal 11 Error

3. Can not retrieve payment term from bill-to site information

4. Returned warning from extra function

Solution: Check Mandatory Setups Section.