Intercompany Accounting - PowerPoint by aam94847

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									                Intercompany Accounting and Transfer
                      Pricing in Oracle EBS 11i.10


                                        Rixin Zhu
                            Manager, Cost Management Systems
                                     Oracle USA, Inc.

                                                             March, 2006




This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                           Agenda

      •      Overview
      •      Supported Flows and Features
      •      Logical Transactions
      •      Parent Transactions
      •      Accounting
      •      Setups
      •      Material Transactions and Distributions Forms




      This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-2   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                         Overview
      •       Support of Internal Order Transfer Available in
              11i.9
                – Transfer Pricing + Intercompany Invoicing
      •       Enhanced Drop Shipment and Shared
              Procurement Available in 11i.10
                – Internal Drop Shipment to Customer
                – Shared Procurement
                – External Drop Shipment
      •       Cross-Product Effort:
                –     Inventory
                –     Purchasing (Receiving)
                –     Order Management
                –     Cost Management
                –     AR/AP

      This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-3   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                  White Papers

      •       Transfer Price Accounting in Oracle SCM, Feb
              2006 (Metalink Note: 360106.1)

      •       Overview of Intercompany Invoicing, July 2005
              (Metalink Note: 336129.1)

      •       Intercompany Invoicing and Advance Pricing
              Integration, May 2002 (Metalink URL:
              https://metalink.oracle.com/cgi-
              bin/cr/getfile.cgi?p_attid=72450.1:284025)




      This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-4   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                   Internal Order Transfer
                                                              Transfer
                  Sending Organization                        Price: $120            Receiving Organization
                  Inventory Cost: $102                                               Inventory Cost: $108


      Features
      •   Account for the shipment as an (external) Sales Order and
          account for the receipt as a Purchase Order.
      •   Deriving the Cost of Goods Sold Account for the shipping
          organization as per the standard Oracle functionality.
      •   Customers can choose whether to use the Transfer Price as the
          incoming cost to the receiving organization.
      •   Internal profit margin is supported in Margin Analysis Report.

      Limitations
      •   No support of return and correction.
      •   Only support transfers across operating units.
      •   Only in-transit transfers are supported.

      This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-5   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
            Enhanced Drop Shipment and Shared
                      Procurement

      •       Separate financial transaction flows from physical flows
      •       Support infinite number of intermediate operating units
      •       Allow intermediate operating units to record COGS and
              Revenue on the logical internal sale of goods
      •       Support documents for the transaction flow (intercompany
              invoices)
      •       Support forward as well as return flows
      •       Costing features
                –     Perform all of the Inventory accounting distributions for a
                      transaction flow in a single commit cycle, and display them
                      together on the form
                –     Costs and Quantities in intermediate organizations are not
                      impacted



      This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-6   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                          Transaction Flows
                                                Shared Procurement

                                   T                             I                           P                    S




                             Ship To OU                                              Procuring OU

      Shared Procurement
      •  Purchase order is created in operating unit P and received in a
         warehouse in operating unit T, with one or more intermediate
         operating units
      •  Execution of the receipt (into RI) in warehouse T kicks off the
         creation of receiving accounting events and logical inventory
         transactions in I and P.
      •  Accounting takes place in all operating units to record the
         obligations and intercompany COGS / revenue.
      •  Item costs and quantities in the procuring and intermediate
         operating units are not impacted

      This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-7   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                          Transaction Flows
                                 Internal Drop Shipment to Customer

                             C                      O                            I                        F




                                       Order-Booking OU                                           Ship From OU

      Internal Drop Shipment to Customer
      •    Order is booked in operating unit O and shipped from a
           warehouse in operating unit F, with one or more intermediate
           operating units (source type: internal)
      •    Execution of the ship confirm from warehouse F kicks off the
           creation of logical inventory transactions in I and O
      •    Accounting takes place in all operating units to record the
           revenue and COGS for the transaction
      Limitation
      •   Internal drop shipment to internal organization is not supported.
          For example, if C is an internal organization and it is an internal
          sales order.

      This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-8   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                            Transaction Flows
                                             External Drop Shipment

C                     O                            I                       F/T                         I                        P                    S




           Order-Booking OU                                      Ship From/To OU                                        Procuring OU


      External Drop Shipment
      •   Order is booked in operating unit O and specifies a ship-from
          warehouse in operating unit F/T, with one or more intermediate
          operating units (source type: external).
      •   Run requisition import in F/T to create a requisition for the item.
      •   Run Autocreate process in F/T to create a purchase order. Be sure
          to specify operating unit P as the procuring OU, specify the
          supplier S, and the warehouse in F/T as the ship-to location for the
          PO. Approve the PO in operating unit P.
      •   Execute the direct delivery receipt in warehouse F/T to kick off the
          creation of RCV accounting events and INV logical transactions.

       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-9    any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                        Logical Transactions
                                                    Procurement Flow
                               RECEIVE               LOGICAL RECEIVE                   LOGICAL RECEIVE

                                    T                             I                           P                    S




                              Ship To OU                                              Procuring OU

       Functional Event: Perform Receive (into RI) in warehouse T
       The following logical transactions are created in INV as a result
       •   P    logical PO receipt
                logical intercompany sales issue
       •   I    logical intercompany procurement receipt
                logical intercompany sales issue
       •   T    <none>




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-10   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                       Logical Transactions
                                                        Shipment Flow

                             C                      O                            I                        F




                                       Order-Booking OU                                          Ship From OU


       Functional Event: Perform Ship Confirm out of warehouse F
       The following transactions are created in INV as a result
       •   F    [physical] sales order issue
                logical intercompany sales issue
       •   I    logical intercompany shipment receipt
                logical intercompany sales issue
       •   O    logical intercompany shipment receipt
                logical sales order issue



       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-11   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                       Logical Transactions
                                          External Drop Shipment
                                       Procurement + Shipment flow
                                                                     RECEIVE                LOGICAL RECEIVE                   LOGICAL RECEIVE

C                     O                            I                       F/T                         I                        P                    S

                                                                      DELIVER


           Order-Booking OU                                      Ship From/To OU                                        Procuring OU

    Functional Event: Perform DIRECT DELIVERY receipt of item into warehouse F/T
    The following logical (no physical) transactions are created in INV as a result
    •    P    logical PO receipt
              logical intercompany sales issue
    •    I    logical intercompany PROCUREMENT receipt
              logical intercompany sales issue
    •    F/T logical PO receipt – replaces delivery to inventory
              logical intercompany sales issue
    •    I    logical intercompany SHIPMENT receipt
              logical intercompany sales issue
    •    O    logical intercompany SHIPMENT receipt
              logical sales order issue

       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-12   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                         Parent Transactions


       •      Accounting for all related logical events created at once
       •      Grouping is achieved by linking all logical events together via the
              parent transaction ID – new column in mtl_material_transactions
       •      Parent transaction is always in the FROM operating unit of the flow
                –      Physical transaction if one exists (shipment flows): sales order issue and
                       RMA receipt
                –      Logical transaction otherwise: Logical PO receipt and Logical RTV in
                       procurement flows. Logical PO receipt during deliver in shipment flows of
                       external drop shipments
       •      All accounting for a single flow is displayed together on the Material
              Distributions form (grouped together by parent transaction ID)




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-13   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                         Parent Transactions

                                          Forward                                                      Return

                                                   P            S                                            P             S
Procurement
   Flows
                                      Logical PO receipt                                              Logical RTV


                                  C                             P                            C                             P
  Shipment
    Flows
                               [physical] Sales Order Issue                                       [physical] RMA receipt



Shipment Flow                                  C                             P                             …
  – External
  Drop Ship
                                                        Logical PO Receipt (created during direct deliver)



       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-14   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                               Accounting – Internal Order
                                     Option 1: Price As Incoming Cost
                                                                 Transfer
                 Sending Organization O1                         Price: $120            Receiving Organization O2
                 Inventory Cost: $102                                                   Standard Cost: $108
                                                                 FOB
                                                                 Shipment

                        INV                   COGS                In-transit                INV                  Accrual                   PPV
                     Valuation                                                           Valuation
                                                (O1)                  (O2)                                         (O2)                    (O2)
 Event                 (O1)                                                                (O2)

1. Shipment                   102          102                    108                                                    120             12

2. Receipt                                                                108           108


                       I/C               I/C Revenue                                                             Accrual              I/C Payable
                   Receivable
                                                (O1)                                                               (O2)                     (O2)
                      (O1)

3. I/C AR           120                              120
4. I/C AP                                                                                                      120                               120



         This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
  1-15   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                   Accounting – Internal Order
                                    Option 2: Price Not As Incoming Cost
                                                                     Transfer
                     Sending Organization O1                         Price: $120            Receiving Organization O2
                     Inventory Cost: $102                                                   Standard Cost: $108
                                                                     FOB
                                                                     Shipment

                      INV                COGS              In-transit            INV                    PPV               Accrual               Profit In
                   Valuation                                                  Valuation                                                        Inventory
                                           (O1)                (O2)                                     (O2)                 (O2)                 (O2)
 Event               (O1)                                                       (O2)

1. Shipment                  102       102                108                                                 6                   120            18

2. Receipt                                                         108        108


                      I/C    I/C Revenue                                                                                  Accrual             I/C Payable
                  Receivable
                                  (O1)                                                                                       (O2)                   (O2)
                     (O1)

3. I/C AR          120                          120
4. I/C AP                                                                                                                120                             120



             This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
     1-16    any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                       Accounting
                                                Procurement Flow – P
         60                        50                           40                      30                         20                      10

C                     O                           I2                       F/T                         I                        P                    S




           Order-Booking OU                                      Ship From/To OU                                        Procuring OU



                                                                                            Inv
                 Event                          Accrual              Clearing            Valuation            I/C COGS

              1. RCV Receive                           10            10

              2. INV Log PO Rcpt                                            10            10

              3. INV Log I/C Ship                                                                10            10




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-17   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                       Accounting
                                                 Procurement Flow – I
         60                        50                           40                      30                         20                      10

C                     O                           I2                       F/T                         I                        P                    S




           Order-Booking OU                                      Ship From/To OU                                        Procuring OU



                                                                                            Inv
              Event                           I/C Accrual            Clearing            Valuation            I/C COGS

         1. RCV Receive                                20            20

         2. INV Log I/C Proc Rcpt                                           20            20

         3. INV Log I/C Ship                                                                     20            20




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-18   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                       Accounting
                                                 Shipment Flow – F/T
         60                        50                           40                      30                         20                      10

C                     O                           I2                       F/T                         I                        P                    S




           Order-Booking OU                                      Ship From/To OU                                        Procuring OU



                                                                                            Inv
              Event                           I/C Accrual            Clearing            Valuation            I/C COGS

         1. RCV Receive                                30            30

         2. INV Log PO Rcpt                                                 30            30

         3. INV Log I/C Ship                                                                     30            30




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-19   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                       Accounting
                                                   Shipment Flow – I2
         60                        50                           40                      30                         20                      10

C                     O                           I2                       F/T                         I                        P                    S




           Order-Booking OU                                      Ship From/To OU                                        Procuring OU



                                                                                     Inv
                           Event                            I/C Accrual           Valuation            I/C COGS

                        1. INV Log I/C Ship Rcpt                     40            40

                        2. INV Log I/C Ship                                               40               40




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-20   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                       Accounting
                                                   Shipment Flow – O
         60                        50                           40                      30                         20                      10

C                     O                            I                       F/T                         I                        P                    S




           Order-Booking OU                                      Ship From/To OU                                        Procuring OU



                                                                                     Inv
                           Event                            I/C Accrual           Valuation            I/C COGS

                        1. INV Log I/C Ship Rcpt                     50            50

                        2. INV Log SO Issue                                               50               50




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-21   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                             Setups
                                                     Transaction Flow




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-22   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                             Setups
                                              Intercompany Relations




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-23   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                             Setups
                                                         Transfer Price




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-24   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                              Forms
                                          Material Transactions Form




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-25   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                              Forms
                                          Material Distributions Form




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-26   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                              Forms
                                      Material Distributions Form (2)




       This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
1-27   any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
                                                        Thank You.




This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into
any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.

								
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