Function documentationIntercompany Billing

 

You use this function to generate invoices between units within a corporate group. You need to do this if the unit that receives an order does not deliver the product, but the product is instead delivered by another unit that is within the same organization but in a different company code.

In addition to the customer invoice, the system can generate an intercompany (IC) invoice for the supplier to bill the seller.

You can also generate IC invoices if there are multiple intermediaries within the same group that need to bill each other for their participation in processing a sales order.

Integration

Data from the customer invoice and IC invoice is transferred to accounting and controlling in SAP ERP. For more information about postings in accounting, see Features below.

Prerequisites

You have made the required settings in Customizing for Customer Relationship Management, under   Billing  Intercompany Billing  .

Features

Single-Level Intercompany Billing

In this type of IC billing process, the supplier bills the seller. The system automatically performs IC billing if the vendor entered in the order is in a different company code than the sales organization in the order.

The following figure shows an example of the billing chain in single-level IC billing:

This graphic is explained in the accompanying text.

Single-Level Intercompany Billing

A customer orders goods from a company in USA. These goods are delivered directly to the customer from a Malaysian plant, which is part of the same group as the US company, but in a different company code. The US company triggers delivery from the Malaysian plant and the following invoices are automatically generated:

  • A customer invoice from the US company

  • An intercompany invoice from the Malaysian plant, billing the US company

Multi-Level Intercompany Billing

In this type of IC billing process, the supplier does not directly bill the seller. Instead, it bills an intermediary within the group, which in turn bills the seller. This process can also function with more than one intermediate bill-to party, resulting in a chain of bill-to parties.

You define the billing chain in Customizing (see Prerequisites above).

The following figure shows an example of the billing chain in multi-level IC billing:

This graphic is explained in the accompanying text.

Multi-Level Intercompany Billing

Two intermediaries are involved in processing the sales order. A customer orders goods from a company in USA, which sources its goods from a European company. These goods are delivered direct to the customer from a Malaysian plant.

The following invoices are generated:

  • A customer invoice from the company in USA

  • An intercompany invoice from the European company, billing the US company

  • An intercompany invoice from the Malaysian plant, billing the European company

Cancellation of Intercompany Invoices

When a sales order item or delivery item is canceled, IC invoices are automatically canceled. You can also cancel IC invoices in billing, for example, to make a correction. You can cancel IC invoices in billing independently of customer invoices for the same sales order.

If data from a canceled IC invoice has already been transferred to accounting, the system issues a credit memo to correct the accounting data.

Accounts Receivable

In SAP ERP, posting takes place as follows:

  • Receivables resulting from the customer invoice are posted in the company code of the sales organization.

  • Receivables resulting from the intercompany invoice are posted in the company code of the supplier.

Intercompany Payables

To use this function, you must activate the business function Sales and Service (CRM_SLS_SRV_1).

In SAP ERP, you can post payables from the point of view of the sales organization if you want to reflect a customer-vendor relationship between company codes in your corporate group. This relationship results in cases of intercompany (cross-company code) transactions such the following service parts management (SPM) processes:

Accounts Payable

Intercompany invoice data is transferred to SAP ERP, where it triggers a vendor invoice in accounting. The vendor invoice in accounting offsets the intercompany invoice. As a result, payables are posted in the company code of the sales organization to represent amounts payable to the supplier.

Incoming Invoices (Vendor Invoices)

Prior to posting of accounts payable, incoming invoices can be created automatically in SAP ERP materials management for inclusion in invoice verification. Posting only takes place in accounts payable if invoice verification is successful.

Note Note

In multi-level intercompany billing, accounts payable posting is supported, however, no controlling integration is available and data from the intercompany invoice, such as partner and sales area, cannot be offset for the vendor invoice.

End of the note.

The intercompany invoice data that triggers accounts payable posting and, optionally, incoming invoice creation, is automatically transferred to SAP ERP after billing. However, if a transfer block is set you need to trigger data transfer manually on the SAP Easy Access screen (SAP GUI) under   Sales  Billing  Transfer Intercompany Invoices to Accts Payable  .

To enable transfer of intercompany payables to SAP ERP, you need to activate the billing feature Intercompany Payables in Customizing for Customer Relationship Management, under   Billing  Configure Application  . You also need to make the settings described in the documentation for this feature.

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