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Former Member
Jul 17, 2012 at 06:40 PM

Cross Company Settlment


Hi Guys

I am currently having issue understanding the cross company settlement. The scenario that i am going to discuss with you guys is an Insurance Industry scenario, but it shouldn't be any different than a normal cross-company scenario.

Company XYZ is an insurance company. It has 3 legal entities created as 3 different company code. CCOA, CCOB,CCOC.

CCOA and CCOB writes Policy and settles claim for two different line of Business. CC0C is a service company code, created for doing billing and Collection.

Lets say, A person buys two policy from XYZ insurance Company, one for Accident and health (CCOA) with 1000$ premium and another for Home Insurance with 700$ premium (CCOB).

This will create two receivables of 1000$ and 700$ posted in Company Code CCOA and CCOB respectively.

Since the Collection is done by Company Code CCOC, the cash is deposited to bank account of company code CCOC. So the Cash of 1700$ is posted to Company Code CCOC.

At this point, i know we can do cross company code clearing and the system will post multiple documents for cross company code clearing. But my question is, what is the next step to settle the cash received in the bank account of CCOC to the bank account of CCOA and CCOB.

What i want is, at the end of the day, Cash in CCOC should be zero and Cash in CCOA and CCOB bank account should be 1000$ and 700$ respectively.