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Trading Partner Field important in GL master data, Customer master data and vendor master data

Hi Gurus,

I have research on all of the forums but did not find the relevant answer that I am looking for:--

What should I know about this topic I make a summary of that below:-

1) Basically, the concept of trading is used to settle and reconcile inter comp transactions both sales and purchases.

2) This field has prevailed in almost all master data Customer, vendor and GL...Why this is needed in all master data? For customer and vendor, I can understand but for GL?

3) Why do we need to enter only company in this field?

Please give me the as much as information about this topic

If it is possible please give me the real time example on this topic.

Thanks and Regards

Dheeraj joshi

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1 Answer

  • Dec 14, 2018 at 06:12 AM

    Hi

    Since you are aware of the use of trading partner requuirements for AP And AR, the field is used for intercompany reconcilliation and knocking off the liabality and recievable between two group entities.

    The same logic is also relevant for GL. Let us take Bank Accounts for example. There could be intercompany transactions between two bank accounts of group companies and as such you will need to make sure that reconcilliation happens. More eg, transfer of asset between group employees. Eg, an employee is working for a Company A and hold a laptop, which is an asset in books of company A. Now the employee is transferred to Company B, which is a group companu. So the laptop has to be shown in the books of Company B. To do that, an intercompany asset transfer has to be executed.The accounting entry generated because of this should carry the trading partner information. Now when the consolidation netting is done, it is done using the field of Trading Partner.

    I am hoping I have been able to answer your question

    Regards

    Sanil Bhandari

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