intercomany billing

[Former Member]

Dear Friends

What are the advantage of using intercompany billing.if the material is not present in one plant than it is possible for us to acess the same by acessing

the sales order by using difeerent plant where the material is present

so why we are suggesting the client to go with intercompany billing

With regards

Sankalp Singhai

[Former Member · Accepted solution]

Hi Sankalp,

Accurate and timely invoicing is absolutely fundamental to client satisfaction and efficient collections. Support of both fixed-price and time-and-materials billing together with punctual invoicing ensures an even revenue stream and transparency for both sides of the business relationship. Moreover in many companies a plant can be a sub contractor also, here intercompany billing help keep up an accountability of material.

award points if that enhances ur understanding.

Thanks

[Former Member]

Hi Sankalp,

Let me throw some light on the intercompany billing process and its configuration.

A company arranges direct delivery of the goods to the customer from the stocks of another company belonging to the same corporate group.

To put in simple terms, Company code A orders goods through its sales organization A from Plant B belonging to Company code B.

It is imperative that both Plants A & B should have the material. In other words, the material is created for both the Plants A & B + their respective storage locations.

Sales Organizations and Plants are uniquely assigned to Company codes. It is not possible to assign either a plant or a sales organization to more than one company code.

Sales organizations and plants assigned to each other need not belong to the same company code.

In other terms, a plant belonging to Company code A & assigned to Sales Organization A can also be assigned to Sales Organization B of Company Code B. This enables cross company sales.

PARTIES INVOLVED

1) End Customer 2) Ordering Company code 3) Supplying Company Code.

End customer:

Customer who orders goods from the ordering company code.

Ordering Company Code:

Which orders goods from Plant belonging to Supplying Company code through its sales organization and bills the end customer.

Supplying Company Code:

Supplies goods from its plant to the end customer specified by the ordering company code and bill the ordering company code.

CONFIGURATION SETTINGS

Assign Delivery Plant of the supplying company code to Sales Org + Distribution channel of the Ordering company code in the Enterprise Structure.

DEFINE ORDER TYPES FOR INTERCOMPNY BILLING:

Menu path: IMG/ SD/Billing/Intercompany Billing/Define Order Types for Intercompany billing

Assign Organizational units by Plant:

Menu Path: IMG/ SD/Billing/Intercompany Billing/Assign Organizational units by Plant.

Define Internal Customer Number By Sales Organization:

Menu Path: IMG/ SD / Billing/ Intercompany Billing/ Define Internal Customer Number By Sales Organization:

Creating / Showing Ordering Sales Organization as Internal Customer for Supplying Company code:

Transaction Code: XD01

The ordering sales organization is represented as Internal customer of Supplying company code.

We need to create customer master in Account Group – Sold to Party and maintain minimum required financial & Sales Area data.

This internal customer number has to be assigned to the ordering sales organization. Hence, the system automatically picks up this Internal customer number whenever there is Intercompany billing.

PRICING:

We need to maintain two pricing procedures RVAA01 & ICAA01. Pricing procedure RVAA01 represents condition type PR00 & any other discounts or surcharges that are meant for end customer.

We assign Pricing procedure RVAA01 to combination of Sales area (Of Ordering company code) + Customer Pricing Procedure + Document Pricing Procedure of Sales document type.

This pricing Procedure (RVAA01) is determined both at Sales Order level & Billing processing for the end customer.

We maintain PR00 condition type to represent the ordering company code’s price to the end customer.

Condition records for PR00 are maintained using organizational elements of Ordering company code, end customer & the Material.

Eg: Sales Org. of Ordering company code + End customer + Material.

We also need to maintain PI01 condition type to represent costs to Ordering company code (in other words revenue to supplying company code). It is statistical condition type & meant for information purpose only.

Condition records for PI01 are created with the following key combination:

Ordering sales Org + Supplying Plant + Material

Pricing Procedure ICAA01is determined at Intercompany billing processing level.

Pricing Procedure ICAA01 – Pricing Procedure for Inter company billing is assigned to the combination of:

Sales Area (of supplying company code) + Document pricing Procedure of Billing document type IV + Customer Pricing Procedure of the Internal customer.

Pricing Procedure ICAA01 has condition type IV01 that represents revenues for Supplying company code in the intercompany billing.

PR00 condition type also appears in Intercompany billing document. It is for information purposes only and does not have bearing on the value of the document.

PI01 represented under pricing procedure RVAA01 is reference condition type for IV01 and the same is defined in the condition type IV01. Due to this these two condition types represent same value.

The condition type IV01 in intercompany billing document represents revenue to the Supplying Company. But its corresponding condition type PI01 in the billing document to the end customer is shown as a statistical item meant for information purposes.

Condition Type VPRS in the intercompany-billing document indicates cost to the supplying company code.

The use of two different condition types in Intercompany billing is necessary to ensure that data is transmitted correctly to the financial statement (Component CO-PA).

ILLUSTRATION:

STEP 1: Create Sales Order

Manually Enter the Delivery Plant of the Supplying Company Code:

OBSERVE CONDITIONS SCREEN FOR ITEM:

PR00 represents Price to the end customer (in other words, revenue for the ordering company).

PI01 represents cost to ordering company (in other words, revenue for the supplying company). It is represented as statistical item only.

DELIVERY:

Delivery is carried out from the supplying point & hence we can observe that it is done from shipping point assigned to the supplying point.

Subsequently, Picking & PGI are carried out.

BILLING TO END CUSTOMER:

T-Code: VF01

Create Intercompany Billing:

T-code: VF01

OBSERVE THE CONDITIONS SCREEN OF THE INTERNAL INVOICE:

IV01 Condition type represents revenue for the supplying company code.

VPRS condition type represents cost to the supplying company code.

PR00 in intercompany billing document displays amount billed to the end customer. It serves as just an information item and is inactive.

If the ordering company enters the incoming invoice manually, the delivering company can print out an invoice document with the help of output type RD00, which is then sent to the Payer.

If automatic invoice receipt has been agreed, we must use the SD output control functions to ensure that output type RD04 is found in internal billing. In R/3 system, output determination procedure V40000, which includes this output type, is assigned to Intercompany billing type IV.

The automatic posting to the vendor account is initiated when output type RD04 is processed. The system uses the EDI output type INVOIC in the FI variant.

To ensure that payables are posted in financial accounts of the ordering company, the delivery company must be created as a vendor.

Award points if it adds information.

By going through the process we can understand that we can deliver the goods to the customer through the plant of another company code which belong to the same company.

Thanks

Mohan

[Former Member]

Sankalp,

Inter company billing comes into the picture, when you are ordering the goods from one company and delivering the goods from the plant of another company..

Eg: Order was placed from Company 1.. by customer XYZ... goods were delivered from plant 2 that belongs to another company 2.

At the end the customer XYZ pays the money to Company 1, not the Company 2 from where the actual goods were delivered..

So after taking the cash from the customer, Company 1 will post the pre defined %age of sales transaction into company 2.. So this will be done by using the Inter company billing transactions..

Hope you got what you are looking for..

Ajai.

Don't forget to reward points if useful.

[Former Member]

Hi,

Sankalp,

Basically intercompany( Stock Transfer ) between one plant to another Plant for which the company is not saying that there is not stock to the customer and it will be sending or delivering the same to the customer in time.

Please go through the below notes to get better under standing on STO',

Stock Transfer Orders comes into picture when the stock is moving / Transferring between two different plants with two Different Company Codes or Stock Transfer between two plants with One Company Code the Difference are given below:

P.O Order types and Delivery Types

STO: - Stock Transfer Order – Intra Company

Stock Transfer between Two Plants with One Company code.

The Purchase Order Type is Used in this case is "UB".

And the Delivery Type Used here is "NL".

Goods Movement type: 641

STPO: - Stock Transfer Purchase Order – Inter Company

Stock Transfer Purchase Orders between Two Plants with Two Different Company Codes.

The Purchase Order Type is Used in this case is "NB".

And the Delivery Type Used here is "NLCC".

Goods Movement type: 643

Please do let me know if have any quires on this and Please Reward,

Thanks and Regards,

Sateesh.Kandula

[Former Member]

Hi Sankalp,

If the sales org and plant belong to different company code and the sales org want to take the stock from plant also to track the sales revenue you need to follow intercompany business process.

Regards,

Beena