Billing Between Company Codes 

Purpose

In the service branch it is common that employees belonging to one company code sometimes work for other company codes. It is often the case that a company code (requesting company code, for example, a particular international subsidiary) of an enterprise carries out a project in conjunction with external customers, and thereby uses employees from other company codes (supplying company codes) for the project. In order to distribute the project revenues accrued in your company code according to expenditure fairly, you are billed for the expenditures of employees belonging to other company codes. These expenditures are collected for all employees working on a project and you can bill them internally for cost unit rates or any sales prices. All project participants confirm their expenditures for the same project.

 

You can depict this process using the functions for billing between company codes (resource-related internal billing) described in the following documentation. This type of billing is based on the dynamic item processor (DIP), which is also used for resource-related billing of customers.

 

§         Allocating Times

When you allocate times, we recommend that you exclude the corresponding cost elements in the reconciliation postings of the reconciliation ledger. Ensure organizationally that billing between company codes is carried out. For more information, see Reconciliation Ledger.

§         Allocating Travel Expenses

If the CO Company Code Validation in Customizing for Controlling under General Controlling ® Organization ® Maintain Controlling Area is active, implement the modification in SAP Note 643838.  Ensure organizationally that billing between company codes is carried out.

§         Allocating External Invoices

If you want to allocate external invoices from a third-party internally, carry out the modification in SAP Note 643838. Ensure organizationally that billing between company codes is carried out.

 

Prerequisites

You carried out the steps described under Configuration.

 

Process Flow

The following example uses a supplying company code only and a project as an account assignment object.

In the supplying company code you can use all objects with order characteristics as account assignment objects, such as sales orders, WBS elements, network headers, network activities, and service orders.

 

The steps described below correspond to the process depicted in the graphic.

...

       1.      The supplying company code creates an internal sales order once, or once a year for example, in which the internal customer represents the requesting company code.

       2.      The requesting company code creates a project with its (external) customer. Contract agreements in the form of a real sales order lie with the requesting company code.

       3.      An employee from the supplying company code provides services for the project and reports his or her time and travel expenses directly.
Actual costs in the requesting company code are posted to the project, although the employee did not create any expenditures for the requesting company code, because, for example, travel expenses are refunded by the supplying company code.

       4.      The functions for billing between company codes reads exactly those time and travel expense confirmations (and also external invoices, for example), which exceed the company code boundaries between the supplying and requesting company code in this way. The system processes line items as in resource-related billing, for example, summarized dynamically, structured, and evaluated. The system generates an internal billing request.
For more information, see Billing Between Company Codes.

       5.      The internal billing document is created based on the internal billing request in the supplying company code (step 5a) and sent (optional) to the requesting company code using the SAP Electronic Data Interchange (SAP-EDI). There the system posts the incoming invoice in Financial Accounting (step 5b).

                            a.      In this way, internal revenues are posted on the side of the supplying company code. These internal revenues balance the employee’s travel expenses in this company code. As a rule, revenue surplus is attained, which balances out the fact that the supplying company code did not use its employees for one single customer project.

                            b.      Internal expenditures are posted on the side of the requesting company code. Account assignment in Controlling is superfluous, as a rule, since the actual costs were already account assigned in step 3.

       6.      The requesting company code creates a customer billing document and thereby creates revenues for services as well, which were provided by the employee from the supplying company code. The requesting company code must not wait for the incoming invoice (step 5b), but rather it can create its billing document immediately after time or travel expenses have been entered by the employee (step 3). The requesting company code hereby creates external revenues. A portion of these revenues must be used to compensate the internal expenditures from step 5b.

 

Alternative Process

If you do not want to use the process described above, you can use the business process described below. Here the employees of the supplying company code confirm their time or travel expenses for a sales order, and the employees of the requesting company code confirm theirs for a project, even though both work for the same project. You must create a purchase order (and a sales order) for each project belonging to the supplying company code.

       1.      The requesting company code creates a purchase order for the supplying company code.

       2.      The supplying company code creates a sales order for the purchase order.

       3.      The employee belonging to the supplying company code who works on the project, confirms his or her time and travel expenses for the sales order.

       4.      The supplying company code bills the sales order to the requesting company code, whereby incurred costs are account assigned at invoice receipt to the project of the requesting company code.

       5.      The project costs are billed to the customer belonging to the requesting company code.

 

Result

You billed for services provided for other company codes. The revenues you attained from external customers are divided among all participating company codes.