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Intercompany transactions

How to create Intercompany Transactions using Global Intercompany

Swapnil Patkar
March 30, 2020

Select Manage Intercompany Outbound Transactions task as an initiator of an intercompany transaction.

Goto Intercompany Accounting >> Transactions syntax_image Task Bar >> Create Transaction (Using Sub Ledger Transaction Type) syntax_image Create Intercompany Batch:

Provider (who is initiating Intercompany transaction)

Transaction Type: IC Transfer

Batch Date: 11-10-2019

Accounting Date: 11-10-2019

Control Amount: 2,300.00

syntax_image Create Transactions:

Enter Receiver: Pango GmbH (who is Receiving Intercompany transaction), Debit Amount

syntax_image Create Transaction Distributions:

Provider

Enter Distribution Account and Credit Amount

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Receiver:

Enter Distribution Account and Debit Amount

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Submit Transaction.

syntax_image Transferring Transactions to Receivables and Payables

Initiator workflow transfers the intercompany transactions to Receivables module to create AR invoices as required by legal or business requirements. After creating the invoices, Receivables updates the intercompany transactions with the invoice numbers and passes the number to the recipient workflow, which updates and transfers the transaction to Payables.

Transfer to Receivables

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Enter Business Unit (Initiator company), Legal Entity, and Submit it .

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This will create transaction in Receivables Interface table & Autoinvoice ESS job will import this transaction as an Invoice in AR.

Search Intercompany AR Invoice which system created.

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Validate all Invoice details

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Invoice Distributions

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Transfer to Payables:

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Enter Business Unit (Receiving company), Legal Entity, and Submit it

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This will create transaction in Payables Interface table & Import Payables Invoices ESS job will import this transaction as an Invoice in AP.

Search Intercompany AP Invoice which system created.

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Validate & Approve this invoice.

Review Invoice & Line

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Review Line Distribution

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Settle these Open invoices as per business rules within these Intercompanies.

Task Bar >> Create Transaction (Using Journal Transaction Type) syntax_image Create Intercompany Batch:

Provider (who is initiating Intercompany transaction)

Transaction Type: Journal

Batch Date: 11-13-2019

Accounting Date: 11-13-2019

Control Amount: 1,000.00

syntax_image Create Transactions:

Enter Receiver: Pango GmbH (who is Receiving Intercompany transaction), Debit Amount

syntax_image Create Transaction Distributions:

Provider

Enter Distribution Account and Credit Amount

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Receiver:

Enter Distribution Account and Debit Amount

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Submit this Transaction.

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Intercompany transactions that do not Subledgers like AR/AP are directly transferred to General Ledger once it is approved.

Before you transfer the transactions, ensure the following:

  • The corresponding period is open
  • The transaction status is approved
  • The exchange rate exists between the intercompany and general ledger currency if it is foreign currency transaction

The transaction date is used to derive the exchange rate.

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Note: Do not enter any parameter, this will transfer all intercompany transactions entered within various ledgers(companies).

syntax_image System creates Journals in Initiator & Receiver Ledgers

Verify ledger in Initiator Ledger “Pango Inc.”

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Validate journal & Approve it

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Verify ledger in Receiver Ledger “Pango GmbH”

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Validate journal & Approve it

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Post both these journals.

Intercompany Offset entries gets created as per intercompany Balancing Rules.

Manage Intercompany Balancing Rules: (Subledger having Transaction type IC Transfer) syntax_image System creates offset entries for Provider & Receiver Ledgers as follows syntax_image syntax_image

Intercompany Offset entries gets created as per intercompany Balancing Rules. Read relevant blog here: Considerations to be made by Organizations during Bank change

Manage Intercompany Balancing Rules: (General Ledger having Transaction type Journal) syntax_image System creates offset entries for Provider & Receiver Ledgers as follows. syntax_image syntax_image

About the Author

Swapnil Patkar, Principal Solution Architect

Swapnil Patkar is Solution Architect for Procure to Pay, Order to Cash & Record to Report process cycles in Oracle 11i, R12 & Fusion He is Oracle certified Accounts Payables Implementation.
Having 20+ years EBS & Fusion Implementation, Upgrade, Enhancement & Support experience. Completed 8 EBS & 3 Fusion End to End implementations, 2 R12 upgrades & various Enhancements.

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