intercompany transaction

[mariks]

Hi All,

I am facing one client requirement and don’t have any clue, please advise best possible way to meet client requirement.

Business purpose:

The plants are “A” and “B” (under diff co. codes) have begun shipping products to each other.  They are using existing process used with other external customers and vendors.  That is to say the buyer will issue a PO and the seller will issue a sales order with delivery and post goods issue.  This results in an intercompany transaction that would normally be eliminated during consolidation.  However, Client wants to avoid the elimination entry. 

The normal accounting entries for these transactions are:

Billing entry (VF01):

DR   Customer

CR    Sales

Post goods issue entry: VL01N

DR Cost of goods sold

                CR Inventory

Client is asking for these entries:

Billing entry: VF01

DR   Customer

CR Inter Company Clearing

Post goods issue entry: VL01N

DR Inter Company Clearing.

                CR Inventory

The object is to have these entries be self-eliminating with no impact on profit. 

These transactions are only for specific customers. 

Please advise your thoughts on this requirement. If any one comes across with this requirement, kindly provide step by step.

Thanks,

Mariks

[suma_mani]

Hi Mariks,

Why don't you suggest 301 movement type between interplants ( Different company codes)

Mentioned entry will post :-

Inventrory .........Dr........1001 Comapny code

1002 Intercompany GL.......Dr......1001 Company code

    To Inventory account..............Cr....1002 Company code

     To 1001 intercompany account...Cr...1002 Company code.

Maintain Intercomapny accounts in OBYA settings.

Otherwise ,you do change the OBYC setting > GBB - VAX / VAY based on your scenario to populate intercompany whule doing PGI. Change VKOA settings to determine the Intercomapny account instead of sales GL.

Regards

ManiKumar

[mariks]

Thanks for the reply Mani Kumar,

1^st method, I will check with my client, if they are agreed I am very happy.

I have some basic doubts: 1) I have tested in sand box as you suggested, Accounting entries are generated perfectly. But what about cost incurred respective plant involved to produce for a particular goods/product, how to manage cost and profit.

Example: Finished product: PEFG (to produce a product cost is Rs 100).

Under Plant A & company code 1001	Under Plant B and company code 1002
Finished product: PEFG (to produce a product cost is Rs 100.
This goods if we transfer from Plant A (CC 1001 ) to Plant B (CC1002)
Cost here is 100% and No revenue	No cost and 100% revenue.
Where is invoice and sale?

How to manage? or system will take care of in back end ?. Please clarify...

2^nd Method: Not possible.

• I requested in my original post, to implement only for specific customers not entire company. If we change in VKOA this would happen for all the customers.

Please share your ideas on this requirement.

Thanks & regards,

Mariks

[suma_mani]

Hi Mariks,

No cost or revenue occur ,if you are using 301 movement type and material master having
price control as V. There is cost / revenue ,if maintain price control is S. I mean one
price difference line item will generate along with intercompany entry.

But i never checked the price control S.Better you can change the price of plant and check
about the treatment of accouting entry.

I hope no tax invoice required for plant to plant transfer. If yes,you can just develop
simple smartform to show required data against material document.

No sales or Purchase entry occur. You are sending materials 1001 plant 1002 plant (Inter
company).

In the books of 1001 :- Intercompany 1002 getting debit that means it is debtors and should
be clear by 1002 company once pay the same.
Payment entry is :-
Bank clearing account.......Dr
  To Intercompany 1002 account......Cr...( Must be activate open item management in FS00)

In the boosk of 1002 :- Intercompany 1001 getting credit that means it is creditors and
should be clear by 1002 to 1001 plant.

Payment entry is :-
Intercompany 1001 account.......Dr( Must be activate open item management in FS00)
  To Bank clearing account...........Cr

Use F-07 & F-06 for payment entries

Regards
Mani kumar