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Itc WP Internal Orders With Intercompany Invoicing
Itc WP Internal Orders With Intercompany Invoicing
Author
Hernan Hamburg
Copyright
IT Convergence 2012
TABLE OF CONTENTS
Introduction ............................................................................................................................................................................... 3
Why Should I use Internal Orders with Intercompany Invoicing? .............................................................................................. 3
Internal Orders with Intercompany Invoice Flow ....................................................................................................................... 4
Internal Orders with Intercompany Invoice Key Setups ....................................................................................................... 12
Internal Orders with Intercompany Invoice Identifying Prices and Costs.............................................................................. 13
Intercompany Function............................................................................................................................................................ 14
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Introduction
Internal Orders with Intercompany Invoicing is not a new function, in fact, its been around for quite some time in different
Oracle versions. However Oracle has made major improvements to Intercompany functionality in Release 12, and this
new globalized scenario will help companies lower costs and improve operating efficiencies.
This paper discusses the fundamentals behind Oracle R12 Intercompany Invoicing and highlights this transaction flow.
Automatization Internal Orders with Intercompany Invoicing reduce manual operations involved in a typical
transfer. This flow automatically creates Sales Orders and generates the Intercompany Invoices in Account
Receivables and Account Payables. In addition, if you use Advanced Supply Chain Planning you can even
create the Internal Requisition automatically. This means that the only human interaction points are actual
picking and shipping of the goods and the receiving them inside the Inventory organization.
Accuracy Fewer mistakes will be made since Oracle handles most of the flows operations.
Flexibility You can add / disable different Operating units to use this flow at any given time. You can also run
this flow in parallel with other options, like creating a Purchase orders in the requesting operating unit and
manual Sales order within the sourcing Operating unit.
Oracle has recently added functionality in R12 such as shipping documents that further enhance the Intercompany
Invoicing flow. R For example this enhancement in Oracle Shipping that allows you to easily modify documents in XML
gives you the flexibility to gather all the information you need. In addition the performance for the concurrent Create
Intercompany AR invoices and Create Intercompany AP Invoices has been improved.
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Flow Steps:
1) Internal Requisition
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3) Order Import
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4) Pick Release
This form allows many combinations to execute the pick release. For this case specific the picking rule has an automatic
shipment rule. As a result both Pick and Ship confirm happens in one step.
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6) Autoinvoice
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8)
AP Invoice
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Internal Requisition
Internal Sales Order
Shipping
Intercompany Invoice
Internal Requisition
Oracle populates the Internal Requisition Price field based on the Item cost as determined by the sourcing
Organization. If the Currency in the source organization is different than the currency of the Requesting operating unit,
an exchange rate will be applied based on the setup of the profile options.
Internal Sales Order
The Price flag for Internal Sales Order is No. In other words, you will see the field called Calculate Price Flag as Freeze
Price.
The Selling price for the internal sales order lines will be coming from the internal requisition. In other words, it will be the
item cost of the source organization.
Shipping
The Shipping part of the flow will create an internal Inter Org Transfer (based on the Shipping networks setup).
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The cost used here will depend on the profile option CST: Transfer Pricing
If the value selected is No, Oracle will use the item cost
If the value selected is other option, Oracle will use a price list using the Transfer pricing functionality.
Intercompany Invoice
The AR Invoice will get the Price from a Price List. This can be either defaulted from the Internal Customer Bill to Site or
based on the use of Qualifiers depending on the setup of the profile option INV: Advanced Pricing for Intercompany
Invoicing
Intercompany Function
Implementing Internal Orders with Intercompany Invoicing comes with its unique set of challenges, just as any Oracle
workflow does. Hopefully this paper has given you some guidelines which will help you get started on the right foot. In
the event that you should need further assistance, please feel free to contact us at 1-800-675-0032 and we will be happy
to assist you.
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Bibliography
Oracle Inventory User Guide, Release 12.1, Part No. E13450-04, August 2010
Oracle Order Management Implementation Manual, Release 12.1, Part No. E13406-04, August 2010
Oracle Order Management Users Guide, Release 12.1, Part No. E13408-04
Oracle Shipping Execution Users Guide, Release 12.1, Part No. E13431-04
Oracle Purchasing User Guide, Release 12.1, Part No. E13410-05
Hernan Hamburg has been an Oracle Functional Consultant since 1998 and has implemented and supported Oracle Applications worldwide. He is
presently Senior Principal Consultant at IT Convergence.
LEGAL DISCLAIMER:
The information contained herein should be deemed reliable but not guaranteed. The author has made every attempt to provide current and
accurate information. If you have any comments or suggestions, please contact us: info@itconvergence.com.
IT Convergence:
805 Veterans Blvd., Suite 216,
Redwood City, CA 94063, USA
Worldwide Inquiries:
Tel: + 1.415.675.7935
Fax: + 1.650.556.9739
www.itconvergence.com
Copyright 2012
IT Convergence.
All rights reserved.
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