Intercompany Handling (SAP Library - Process Flow Hierarchy)

Intercompany Handling

Purpose

Intercompany handling (cross-company code business processing) contains business transactions that take place between two different companies (company codes) that belong to one organization or central company. A sales organization, assigned to the ordering company code, creates a sales order for goods from a plant belonging to another company code. The R/3 System distinguishes between two different processes:

cross-company sales handling
The goods are delivered directly from the plant to the customer.

cross-company stock transfer
The goods are delivered from the plant in the second company code to the plant for which the sales organization has ordered the goods. Because both company codes manage their own balance sheets, the delivering company code has to invoice the ordering company code for the goods. An internal billing document is used for this consumption. The price, for which the delivering company code invoices the ordering company code, represents the costs spent by the delivering company code.

Only cross-company sales handling is described here. You can find information on cross-company stock transfer under Internal Procurement

The relevant Quality Management processes in this scenario are described in detail in QM in Sales and Distribution.

Prerequisites

The following R/3 components are integrated in intercompany handling:

SAP Component	Functions
Sales	Sales Order Processing
Shipping	Deliveries, goods issue
Warehouse Management	Stock placement and removal
Transportation	Transportation planning and processing
Billing	Invoice, credit/debit memo, and rebate processing
Information system	Planning, forecasts, and statistics

Process Flow

Use for a sales order

The ordering company code creates a sales order for the goods it wishes to order from the delivering company code. The following basic functions are available in sales order processing:

Costing and pricing
Availability check
Transfer of requirements to demand management
Delivery scheduling
Export control

Shipping

The delivering company code ships the goods to the customer. You trigger shipping processing by creating deliveries from orders that are due to be shipped. The system checks both the availability of the product and the validity of the shipping deadlines.

In picking, you remove goods from the warehouse and prepare them in the picking area. These functions are also supported by the Warehouse Management system.

Delivery items are packed by assigning shipping units that can be composed of materials and packing, or just the delivery item.

Goods issue represents the completion of shipping processing. It results in a reduction of stock and an update in the balance sheet account valuation in Financial Accounting (FI).

Warehouse Management

Picking links warehouse management (WM) with sales order processing. The system differentiates between picking in warehouses with fixed bin locations, or in warehouses with random storage (using transfer orders).

Transportation

You can use transportation planning to group together the deliveries that are due to be transported. Essential planning activities are determining shipping deadlines and means of transport, and assigning routes.

Transportation processing also allows you to follow the transportation activities that take place after planning.

The shipment costs determined in transportation are forwarded to Financial Accounting, settled with the carrier and billed to the customer.

Billing

As well as a standard customer billing document, an internal billing document is also necessary for calculating the consumption between company codes. Once a billing document has been created, the values are posted to the relevant financial and cost accounting accounts.

Information system

The information system helps you in planning, forecasts, and analyses. It uses master data and any transaction data that may result from the business processes for its evaluations.

Result

The following scenarios may also be of use to you in conjunction with Intercompany Handling:

Presales Handling

Returnables/Empties Handling

Foreign Trade Handling

Complaints Handling