How Intercompany Invoicing is Done in Oracle EBS

Setup Oracle Intercompany Invoicing in Oracle 11i and R12

1. Inter company
Invoicing

2. Agenda
Introduction
Conditions
Inter Company Transaction Flow
Advanced Accounting

3. Introduction
Intercompany invoicing is done when one organization
offers products / services to another operating unit. For
example, when a customer order is processed through
the order cycle and then invoiced, the selling
organization records journal entries to accounts
receivable, revenue, and as applicable tax and freight.
When this scenario involves a selling organization in
one business unit but a shipping warehouse in a
different business unit, additional accounting must take
place.
The shipping organization needs to bill the selling
organization at transfer price, and the selling
organization needs to make the corresponding
payment.

4. Introduction
Note: that intercompany invoicing is
possible only between two operating
units. You cannot invoice between two
inventory orgs if they belong to the
same operating unit.

5. Conditions…
Oracle supports intercompany
invoicing when:
• Shipping operating unit is different
from selling operating unit and
• Receiving operating unit is different
from procuring operating unit.

6. The building block of intercompany
invoicing is the setup of intercompany
transaction flow.

7. Inter Company Transaction
Flow
Intercompany transaction flow is of two types
shipping flow and procuring flow.
You need to setup intercompany transaction flow
of type shipping when selling operating unit is
different from shipping operating unit.
You need to setup intercompany transaction flow
of type procuring when buying operating unit is
different from receiving operating unit.

8. Advanced Accounting
By enabling advanced accounting
for an intercompany transaction flow,
you would be able to generate
multiple intercompany invoices
between different operating units for
the same physical movement of
goods.

11. Freight

12. Freight
Freight charges can be added to the
intercompany invoice only for
shipping flows
You need to define an inventory item
with user type as “Freight”
Then assign this item in the profile
“Tax: Invoice Freight as Revenue”

15. Thank You