Introduction of SAP Inter company sales process
This SAP tutorial will concentrate on understanding of SAP Intercompany sales process. Intercompany sales processing allows a company to sell goods from a Plant assigned to another company code.
Intercompany sales processing shall be initiated with the sales organisation creating an order for the delivery plant belonging to another company code.
The system checks sales organization and distribution plant company codes and conducts intercompany billing processing via Inter-Company Billing document automatically.
The plant in the company code of delivery delivers the goods to the customer for whom the sales organization has placed the order.
In this case, two billing documents are created:
- The customer billing document that is sent from the sales organization to the customer who receives the goods.
- •An Inter-Company billing document that is forwarded from the delivery plant to the sales organization
An inter-company business transaction is where sales transactions (sales orders and billing documents) for the sale of materials are carried out in a company code different from that used for the storage, production and delivery of those materials. This business transaction often occurs in corporate groups where, for example, the subsidiaries are entrusted with sales-related operations, while the actual production takes place exclusively in the parent company.
Intercompany business therefore typically requires the actual sale of products to “external customers” to be accompanied by an internal allocation between the subsidiary (sales company code) and the parent company (suppliers company code).
Billing documents for such transactions must be generated both in the company code of production and in the company code that sells the product to the end customer.
Benefits of Inter company sales process
- This prevents the company from pre-supplying the goods in its own warehouse and can choose from whom to deliver the goods to the customer.
- Allows all company codes to share inventory information, track inter-company shipments, and view automatic FI postings and settlements.
- Automatic Inter-Company account reconciliation and settlement In-transit inventory visibility and reporting
- Workload reduction in processing invoices
- Eliminate invoicing errors
- Eliminates reconciliations
Pre-requisites for intercompany
- The ordering sales organization and the delivery plant must be governed by different company codes.
- The required combination of the Sales Organization and the Delivery Plant must be maintained.
- Sales Area – Sales Organization, Distribution Channel and Division shall be assigned to all plants in which the sales processing of Intercompany is carried out.
- Intercompany Billing Document type must be assigned to the type of sales document required.
- In order to represent the ordering Sales Organization, an internal customer number must be established in the Sales Organization representing the delivery plant.
- Materials must be available in all plants participating in the Intercompany Sales process.
- Condition types representing the processing of sales by Intercompany shall be maintained in the pricing procedure.
- Condition records for the required combination of sales organization and plant must be maintained
Inter Company Invoice Posting
The delivery company and the ordering company are part of the same company. The intercompany billing document for the delivery company is therefore posted as the receipt of the invoice for the ordering company.
The ordering company can post an invoice receipt either:
- Manually after delivery of the goods, the invoice document can be printed with the help of the output type RD00, which is then sent to the end customer.
- Automatically with an intercompany billing document: through IDOC / EDI. The system uses the output type RD04 included in the output determination procedure V40000, which is assigned to the internal billing type.
The delivery company must be set up as a supplier or vendor in order to be able to create the financial document of the ordering company.
Define Order Types For Inter company Billing:
Intercompany billing document type IV is assigned to all types of order documents for which intercompany sales processing may be carried out.
Menu Path: IMG- > Sales & Distribution->Billing->Inter Company Billing->Define Intercompany Billing Order Types.
Assign Organizational Units by Delivering Plant:
The sales organization, Distribution Channel and Division are allocated to plants for which inter-company processing of sales is possible. Delivery Plant uses these specifications to process intercompany billing.
Menu Path: IMG- > Sales & Distribution->Billing->Inter Company Billing->Assigning Organizational Units by Plant
Assign Plant to Sales Organization and Distribution Channel:
Sales Organization and Distribution Channel must be assigned to the Delivery Plant to enable the processing of sales.
Menu Path: IMG->Company Structure->Assignment->Sales and Distribution->Assign Plant to Sales Organization and Distribution Channel.
Define Internal Customer Number By Sales Organization:
The Internal Customer Number must be assigned to the Ordering Sales Organization.
Menu Path: IMG- > Sales & Distribution->Billing->Inter Company Accounting->Define Internal Customer Number by Sales Organization.
Master Data –Preparation
Create Internal Customer Number By Sales Organization:
The Customer Master Record shall be established in the Sales Organization representing the Delivery Plant. The sales organisation belonging to the Code of the Ordering Company shall be the internal customer.
Menu Path: Easy Access- > Logistics- > Sales and Distribution- > Master Data- > Customer- > Create.(XD01)
Master Data – Extend the material in the Delivery Plant
Enter the Delivery Plant in the material master records that will be relevant to the sales transaction will be carried out by the Ordering Sales Organization. Extend the material master records in the Delivery Plant: Enter the Delivery Plant in the material records that will be relevant to the sales processes carried out by the Ordering Sales Organization.
Menu Path: Easy Access- > Logistics- > Sales & Distribution- > Master Data- > Products- > Material- > Other Materials- > Change.
Condition Type Configurations
Creating Intercompany Condition Types: The delivery plant uses one of the following condition types to bill the sales organization.
- PI01 Intercompany: fixed amount per unit of material
- PI02 Intercompany: percentage of the amount of the net invoice.
- These conditions specify that the price charged by the delivery plant to the sales organization shall be shown as a statistical value in the order of sale and as an effective charge in the internal invoice.
Menu Path: IMG -> Sales and Distribution ->Basic functions -> Pricing-> Pricing Control -> Define Condition type.(T-code: V/06)
Master Data – Condition Records
Creating Inter-Company Condition Records:
- PI01 Inter company: fixed amount per material unit
- PI02 Inter company: percentage of the net invoice amount.
Menu Path: Easy Access ->Logistics -> Sales and Distribution -> Master Data -> Conditions -> Select using Condition Type ->Create
All Setup has been done, Now let’s create an intercompany transaction
Transaction Steps – Order Creation
Menu Path: Easy Access -> Logistics -> Sales & Distribution -> Sales -> Order -> Create
Create Order: The ordering Sales Organization shall prepare the order for sale. The system shall check the company codes and the authorized combinations of the ordering sales organization and the delivery plant for the implementation of the Inter-Company Billing process.
Sales order initials creation
The system automatically performs pricing in accordance with the pricing procedure assigned to the sales organization. The intercompany charge (PI01 / PI02) appears as a statistical value on the sales order screen conditions-the charge has no effect on the final value of the customer’s order. The intercompany charge is not printed on the customer’s documents.
Transaction Processing – Outbound Delivery
Delivery shall be effected by the Ordering Company from the Shipping Point assigned to the Delivery Plant.
Transaction Processing – Billing Document
Menu Path: Easy Access- > Logistics- > Sales & Distribution- > Billing- > Document Billing- > Create (VF01)
The Ordering Company creates the invoice for the end customer. The Payer and the Company Code are derived from the Order created by the ordering Company Code
The Company associated with the Delivery Plant bills the Ordering Company through the Inter-Company Billing Document. The Payer Code and the Company Code are derived from the Order of the Company.
IV Inter company Invoice
Posting of the Inter Company Invoice
Manual invoice posting is done after Post good issue has been done and the systems prints invoice documents using the output type RD00, which is then sent to the end customer. The intercompany accounting transaction is automatically posted via IDOC / EDI The system uses the output type RD04 included in the output determination procedure V40000, which is assigned to the internal billing type.
For the system to determine another delivering plant for the material in the customer order item, when entering a sales document:
- Ensure that the same delivering/supplying plant is maintained in the Customer material info record if any.
- The internal customer master for the delivering sales organization must also contain the same plant.
The delivery company must be set up as a vendor in order to be able to publish the financial document of the ordering company.
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