How does the intercompany shipping flow work ? (Ship stock from different Operating Unit)
Sales Order – OU A
- Create a Sales order for OU A
- Every sales order line has a field called “Warehouse”, if the “Source Type = Internal” then you can choose any of the inventory orgs from where the good need to be shipped. If the inventory org selected belong to a different OU then system automatically treats this as intercompany transaction
- Select the warehouse as inventory org B which belongs to OU B
- Book the order (Note that the workflow status can be different depending on item attributes (if the item is ATO item then there is more detailed tracking of status)
- Reserve, Pick Release and Ship the order
- “Interface Trip Trop” concurrent request determines the “Transfer” price charged by OU B to OU A
- Once this process is complete, system automatically generates following accounting entires in R12
- OU B – Shipping OU
- Deferred COGS based on Cost in Inv Org B – Debit
- Inventory Valuation – Credit
Customer Invoice – OU A
- Run Autoinvoice for Selling OU A, it would create following account entries (Depending on accounting rule choosen)
- Trade Receivables – Debit
- Deferred Freight Revenue – Credit
- Deferred Trade Revenue – Credit
Intercompany AR Invoice – OU B
- Now run “Create Intercompany AR Invoices” under “Inventory”. This will then populate data into AR interface tables for intercompany AR invoice from OU B to OUA
- Run autoinvoice in OU B, this process will create intercompany AR invoice based on transfer price. In case “Invoice Freight As Revenue” profile is turned on, “Freight Charges” are also automatically included as a separate line in the invoice. In case TAXes are defined, tax is also automatically applied
- This process will also create accounting entries for OU B
- Intercompany Receivables – Debit
- Intercompany Revenue – Credit
- Intercompany Freight Revenue – Credit
Intercompany AP Invoice – OU A
- Now run “Create Intercompany AP Invoices” under “Inventory”. This will then populate data into AP interface tables for intercompany AP invoice from OU A to OUB
- Run “Open Invoices Import” program under Payables to create a Intercompany payables invoice which will have exactly same amount as receivables invoice
- Trade COGS – Debit
- Freight – Debit
- Intercompany Payables – Credit
- Once GL posting is done then Deferred COGS and Deferred Revenue both get recognized
