Intercompany Sale without Intercompany Invoice

[Former Member]

Hi Folks,

I have a requirement which says I have to create a Intercompany sale between two different plant which are assigned to different company code. At the same time my client does not want the Intercompany Invoice for the same. How can this be

configured and as far as Financial flow is concern how can this transaction be reflected in the books of account.

Looking forward to hear from you.

A quick action would be highly appreciated.

Thanks,

Nihar

[Former Member]

Hi,

Create a Customer Invoice in Finance module to do the sales by transaction code FB70 and post the Finance entries. Get help from FI consultant.

Regards,

K Bharathi

[Former Member]

Hi Bharathi,

Thank you so much for your response. Did you mean creating customer invoice in Finance is creating invoice for the end customer or the ordering company code.Because the scenario is like this;

End Customer places order to Ordering Plant and Ordering plant issues a PO to Supplying plant. Supplying plant makes the sales order and supply to ordering plant and ordering plant deliver it to customer and raise the invoice for the same.

But here the catch is Client does not want the supplying plant should raise the invoice to the ordering plant. In this case how they can close this transaction with out invoice?

Pls let me have your views shared.

Thanks,

Nihar

Edited by: nihar.ranjan on Feb 19, 2010 5:28 PM

[Former Member]

Hi Nihar,

You are correct that the accounting entry has to happen for closing the transactions between the company codes in this scenario. In real life, there can be scenarios where client don't want to generate SD invoice for Intercompany but rather perform the transaction closure on a periodic basis. For example, suppose company A is in US and company B is a subsidiary in India. The intercompany transactions between these two companies can happen via SD automated transaction cycle where you setup the intercompany invoicing between company A and company B or it can also happen via a regular PO from MM module raised on Vendor (US company code), followed by normal GR/IR processing in Plant of India company code and sale of goods from sales organization of india company code.

Though it is always suggested to go with standard SAP best practices which calls for creating intercompany invoicing between two company codes using IV documents, but you can try handling this using the 3rd party sales scenario. In 3rd party scenario, you automatically create a purchase requisition based on the sales order line item and that then follows the PO/GR/IR cycle. You can setup the process to allow billing to customer on receipt of invoice (if it is a direct delivery from US company to your customer in India) or follow the process to allow billing irrespective of I/R status. i.e. when goods are in stock at India plant, you can delivery them to customer as a regular delivery and bill the customer. In this case I/R processing on PO side takes care of charging to company in India by Compay in US and billing to customer is taken care by sales order.

I can suggest some other alternative, if you can be more elaborative about the scenario, like is it cross border, what country to what country, what is the complete end to end cycle, is client trying to settle the accounts betwen company codes using some other methods (like monthly accouting entry or management fees basis etc. etc.)

Thanks

Kapil Sharma

[Former Member]

Hi Kapil,

Thank you so much for the time spent and let me know your views.

As asked by you let me describe the end to end scenario to you.

There are three system u201CABC inc , XYZ inc and 123 Incu201D

Both ABC Inc and XYZ Inc belongs to same group of Company

The Structure of ABC Inc is as follows; (It is an Existing System)

Company Code : AZ00

DC (Distribution Center) : DU00 (Dubai DC)

DC (Distribution Center) : GR00 (Germany DC)

XYZ Inc is a New system where they will create the new enterprise structure

Company Code : CA00

Factory Plant u201CFP1u201D (This is located in Netherland)

Factory Plant u201CD8u201D (This is located in Netherland)

123 INC (Netherland) is Third party system which works for XYZ Inc. XYZ Inc deals with many products from many vendors. All the vendors supplies their product to 123 INC as per the PO issued by XYZ INC and 123 INC will assemble them and make them into a Finished Goods and supply to ABC Inc as per XYZ Inc u2018s instruction. 123 Inc will send the ASN to XYZ Inc before making the physical delivery and XYZ inc will make Virtual GR and finally itu2019ll make virtual GI to ABC Inc.

The Business flow is as follows;

First Flow

Customer places order to ABC Inc. and ABC Inc will supply to the customer either from DU00 or GR00. At the same time both the DC (DU00 n GR00)maintain minimum stock level. Whenever it goes below that level this DC issues supply order to Factory Plant (FP1) to replenish the stock. DC will issue a Intercompany PO to FP1 in XYZ Inc. Which in turn will become Sales Order for XYZ Inc. XYZ Inc will make that Sales Order into a Sub-contact PO and issue to respective supplier. At the same to this XYZ Inc will inform 123 Inc about the same. On the basis of the availability of the resources 123 INC will send an ASN to XYZ Inc about the delivery and the same ASN will be forwarded to ABC Inc by XYZ INC. 123 Inc (NetherLand) will make the physical delivery to ABC Inc (either to Dubai DC DU00 or Germany DC GR00) as per the requirement. XYZ Inc will Virtually do the GR and GI. 123 Inc will raise the invoice to XYZ Inc. And Xyz Inc will raise the Intercompany Invoice to ABC Inc.

Second Flow

Both the DC (DU00 or GR00) will issue PO to D8 Plant in XYZ Inc. D8 will make a Stock Transfer to DU00 n GR00. Rest process will be same as explained in the First flow.

The difference between both the flow is that in second flow company will get some TaX benefit.

As far as my understanding in the First Flow I need to create ABC Inc as Customer in XYZ Inc and XYZ INc as aVendor for ABC Inc. I hve to use Billing Type "IV" for the IC Invoicing.

But in Second Flow I am bit confused.

Feel free to let me know if some more information required.

Thanks,

Nihar

Edited by: RANJAFAX on Feb 26, 2010 5:28 PM

[Former Member]

Hi Folks,

I am still waiting for my Question to be answered. If any body knows the solution please share with me.

Your quick and positive response is highly appreciated.

Thanks,

Nihar

[Former Member]

Hi Kapil,

Your information is really helpful. The example you have put across here is almost the same scenario in which I am working. It follows a PO from ordering plant to supplying plant and supplying plant make the delivery. Both the plant are assigned to two differnt company code. My requirement here is after the Delivery the supplying company code should not raise any invoice to the ordering company code.

How this can be customized and in what way the financial flow will be taken care of.

Your quick response would be highly appreciated.

Folks, any one has any input to this pls share with me.

Thanks,

Nihar