Inter Co Configuration-SAP FI

Chapter 4: Intercompany Transactions

CHAPTER 4 : INTERCOMPANY TRANSACTIONS

Objectives

The objectives are:

Set up Intercompany relationships.

Enter Intercompany transactions in the originating company.

Post Payables Management Intercompany transactions in GeneralLedger.

Trace Intercompany transactions back to an originating entry.

Introduction

The following options are available with Intercompany processing:

Transactions can be recorded in one company's PayablesManagement module or General Ledger module that createstransactions in another company's General Ledger.

Revenue or expenses incurred in one company (the originatingcompany) can be tracked as due to or due from amounts in anothercompany (destination company).

Intercompany transactions that are multicurrency transactions can beentered, if Multicurrency Management is a registered module in thesystem.

Intercompany transactions that contain multidimensional analysisinformation for the originating company can be entered.

Intercompany relationships can be established between companiesregardless of their account formats.

The ability to zoom to the origin of an intercompany transactionexists.

Data can be maintained and inconsistencies can be reconciled.

Microsoft Official Training Materials for Microsoft Dynamics ™Your use of this content is subject to your current services agreement

4-1

Payables Management I in Microsoft Dynamics™ GP 10.0

Intercompany Processing Terms

Terms specific to Intercompany Processing are defined in the following table.

Term

Intercompany Transaction

Originating Company

Destination Company

Due To/Due From Accounts

Breakout of Due To/ Due FromAccounts

Definition

Any transaction that containsdistributions to another company.

The company that initiates (ororiginates) an intercompany transaction.

A company that is the recipient of anintercompany transaction.

General Ledger accounts used byMicrosoft Dynamics™ GP to trackamounts to be paid or to be collectedamong companies.The due to/due from accounts aretypically called Intercompany Payableand Intercompany Receivable in thechart of accounts.

Detail created by Microsoft DynamicsGP showing the distribution accountentered and the offsetting due toaccount or due from account for eachintercompany distribution.

4-2 Microsoft Official Training Materials for Microsoft Dynamics ™Your use of this content is subject to your current services agreement


Define Intercompany Relationships

Before entering intercompany transactions, define relationships betweencompanies that can have intercompany transaction interaction. Use theIntercompany Setup window to define these relationships. To open this window,click the Administration series button and then click Intercompany on theSetup content pane.

FIGURE 4.1 INTERCOMPANY SETUP WINDOW

Setting up an intercompany relationship provides the capability to recordtransactions in one company's General Ledger or Payables Management(originating company) that creates transactions in another company's GeneralLedger (the destination company).

Originating Company ID

Enter or select an Originating Company ID. The field is unavailable after anoriginating company is selected. The intercompany relationship must be savedbefore entering another Originating Company ID.

Destination Company Name and Company ID

When an Originating Company ID is selected, all other companies that can be accessed appear in the Destination Company Name list. Select the company toestablish an intercompany relationship with. The Company ID for the companyselected appears below the list box.


4-3


Accounts

Enter the due to and due from accounts for the originating and destinationcompany. These accounts are often called Intercompany Payable andIntercompany Receivable in the chart of accounts.

If entering the account number, enter it as an unformatted string. MicrosoftDynamics GP automatically formats the account according to the specifiedcompany's account format. For example, if the Originating Company Due Toaccount number is 1000-0000-0000-2101-0000, enter it without the dashes;Microsoft Dynamics GP adds the correct account separators to the accountformat after leaving the field.

HINT: For each Intercompany relationship, only one Due To and one DueFrom account can be specified for each company.

HINT: The Originating and Destination Due To and Due From accountscannot be inactive accounts, unit accounts, or unit allocation accounts.

HINT: Accounts cannot be added to the chart of accounts from this window.The account must exist prior to entering it in Intercompany Setup.

Enter Corresponding Company ID

Use this box specifically for Enterprise Reporting. If this box is selected, itprovides the ability to enter a corresponding unit (or Destination Company) oneach distribution line for transactions entered in Payables Management andGeneral Ledger. This allows the Enterprise Reporting integration to bring theintercompany information into Enterprise Reporting.

Window Buttons & Icons

Click Save to save the intercompany relationship. Select Clear to not savechanges. This clears the window and the changes are not saved. Click Delete ifthis intercompany relationship is no longer needed.

To print an Intercompany Setup List for all intercompany relationships for anoriginating company, enter or select the Originating Company ID and selectFile then Print from the Menu Bar or click the Printer icon. This report can alsobe printed from the Reports window.



Enter Intercompany Transactions

Intercompany transactions are similar to any other transactions in the system withthe following exceptions:

They contain distributions to more than one company.

If they are distributed to multiple companies, the information is sentto the specified destination companies and a General Ledger batch iscreated in each company.

All companies on the transactions must have a functional currencyspecified, regardless of whether Multicurrency Management isregistered. The functional currency for each company can beassigned in the Multicurrency Setup window.

If Multicurrency Management is not registered, all companies musthave the same functional currency specified.

They must be saved to a batch. Standard intercompany transactionsare entered in single use or recurring batches. Intercompany multicurrency transactions must be entered in single use batchesonly.

Multidimensional analysis codes associated with distributions arefunctional only for the originating company. That is, the Analysisbutton is available only for those distributions within the company where the intercompany transaction is being entered.Multidimensional analysis codes cannot be entered for destinationcompany distributions during the entry of the originating transaction.However, amounts can still be distributed to destination company accounts that have multidimensional analysis codes set up. To take advantage of the analysis information for the codes, theintercompany transaction must be viewed and edited in thedestination company's General Ledger.

HINT: If analysis groups are assigned to accounts that are entered on anIntercompany transaction, the Multidimensional Analysis information defaultsas normal on the transaction after the transaction moves over to the destinationcompany. However, the only place this information can be edited is in thedestination company (not at the time of entering the Intercompany transactionin the originating company).


4-5


Enter Payables Intercompany Transactions

Open the Payables Transaction Entry window to enter an intercompany transaction. To open this window, click the Purchasing series button and thenclick Transaction Entry on the Transactions content pane in the originatingcompany.

FIGURE 4.2 PAYABLES TRANSACTION ENTRY WINDOW

HINT: When entering an Intercompany transaction in Payables Management,the posting must be set to update General Ledger. Transactions are not postedto destination companies until they are posted in the originating company'sGeneral Ledger.

Enter a voucher number or accept the default number. This identifies an invoice,credit memo, return, miscellaneous charge, or finance charge. The vouchernumber appears on edit lists, posting journals and audit trail reports. Use thesenumbers on the audit trail documents to trace the history of any specificdocument.

If this transaction is an intercompany transaction, select the Intercompany checkbox. Intercompany transactions can be entered for any of the availabletransaction types.



HINT: Clear this check box only if distributions are not entered in companiesother than the originating company.

Enter a description to help identify the transaction. The description appears as thereference in General Ledger.

Batch ID and Document Date

Enter the Batch ID for the batch to save this intercompany transaction to.

HINT: All Intercompany transactions must be saved in a batch. If thetransaction is entered in a recurring batch, payment information cannot beincluded on the transaction.

The Doc. Date is the date the transaction is posted in the Payables Managementmodule. The selections made in Posting Setup determine what date is used whenthe transaction is posted to the General Ledger. If selecting to post to the GeneralLedger using the transaction date, the Date expansion button is available.

Click the expansion button to open the Payables Date Entry window. A postingdate different than the document date can be entered, otherwise the posting datedefaults to the document date.

If selecting to post to the General Ledger using the batch date, the Dateexpansion button is unavailable. The posting date for this transaction uses thedate assigned to the batch in the Payables Batch Entry window.

HINT: The posting date is the date that also updates the General Ledger in thedestination companies.


4-7


Distribute to Posting Accounts

To enter distributions to destination companies, access the Payables Transaction Distribution Entry window to edit these distributions. Click the Distributionsbutton on the Payables Transaction Entry window to open this window.

FIGURE 4.3 PAYABLES TRANSACTION ENTRY DISTRIBUTION WINDOW

Enter the Company ID of the destination companies this transaction is for. Eithertype in the ID or select it from the lookup.

HINT: Intercompany transactions can only be distributed to the types ofPURCH, FNCHG, FREIGHT, MISC, or UNIT.

Account

Enter the accounts or select them from the Account lookup list. If entering theaccount number, enter it as an unformatted string. Microsoft Dynamics GPautomatically formats the account according to the specified company's accountformat. For example, if the account number is 1000-1000-2100-0000, enter itwithout the dashes; Microsoft Dynamics GP adds the correct account separatorsfor the account format when the prompt leaves the field.



The account alias is not available for intercompany transactions. Allintercompany distributions must be entered in the originating currency (thecurrency specified in the Payables Transaction Entry window). In addition, ifMulticurrency Management is not registered, all originating and destinationcompanies must have the same functional currency.

Intercompany relationships must exist with all companies specified in thedistributions, and it is also necessary to have security access to all selectedcompanies.

HINT: Transactions can contain both posting and unit accounts; however,amounts posted to unit accounts have no effect on the transaction total. Unitaccounts do not generate a breakout of Due To, Due From accounts during theposting process.

HINT: The Intercompany distributions entered on the transaction entrywindows do not show due to/due from account breakout. This breakout isprinted on the edit list and posting journal.

Corresponding Co. ID

This is specifically for Enterprise Reporting users. Enter a corresponding unit (ordestination company) on each distribution line for this transaction. This allowsthe Enterprise Reporting integration to bring the intercompany information intoEnterprise Reporting. This field is available if the Enter CorrespondingCompany ID box is selected on the Intercompany Setup window.

Save and Verify Transactions

Save this transaction after the information is entered. Always print an edit listbefore posting to verify the accuracy of the transactions entered. To print an editlist select Print from the File menu or click the Printer icon.

An edit list can be printed from either the Payables Transaction Entry or Payables Batch Entry window, if a Batch ID is entered. On the edit list, view the dueto/due from account breakout.

If errors are identified on the edit list (system errors are denoted by an asterisk,and include errors such as Distributions do not balance and Fiscal Period forposting date is closed), correct the transactions and print another edit list beforeposting. To print documents for the records, select the document and click thePrint button.


4-9


Post Transactions in Payables

Payables Transaction Entry batches can be posted from the Payables Batch Entry,Purchasing Series Posting, or Master Posting windows. Depending on the way the system is set up, the posting journals can or cannot be printed when batchesare posted.

These posting journals are optional; printing can be turned off for any of thesereports in the Posting Setup window. Refer to the Posting Setup lesson of theFoundation training for additional information on posting journals. On theposting journal, the due to/due from account breakout can be viewed.

HINT: The only reports where entries for both companies are seen is on theedit list and the original posting journal in the originating company. Theposting journal reports (reprint posting journals) only show the distributionsspecific to that company.

Post Intercompany Transactions in General Ledger

Once the intercompany batch is posted in Payables Management, it needs to beposted in General Ledger. It does not create a batch in a destination company until it is posted in the originating company's General Ledger.

HINT: This step is not required if selecting to Post through General Ledger.The batch already updated the General Ledger in the originating company andcreated a batch in the destination company.

Print an edit list of the batch to verify the accuracy of the transactions. To printan edit list, select Print from the File menu or click the Printer icon. On the edit list, the Due To/Due From account breakout can be viewed.

When an intercompany transaction is posted in General Ledger, if it is distributed to multiple companies, the information is sent to the specified destinationcompanies and a General Ledger batch is created in each company. The batchsent over to each destination company's General Ledger must be posted in thedestination company for it to become a permanent part of that company's records.

If edits do not need to be made to the transactions in this batch, click Post from the Batch Entry window to post the batch. This batch can also be posted from theSeries Posting or Master Posting windows.

HINT: Intercompany transactions are not included in the batch total inGeneral Ledger. However, the number of transactions in the batch is updated. In destination companies, the transactions created are not selected asIntercompanyand are included in the batch totals (but transactions are assignedan Intercompany audit trail code).



If edits need to be made prior to posting the batch, go to the transaction entry window in General Ledger. This window can also be accessed by clicking theTransactions button on the Batch Entry window. Enter the journal entry numberor select it from the journal entry lookup. Make any necessary edits and resavethe transaction.

HINT: All Intercompany transactions must be saved in a batch. Total debit andcredit amounts appear only when viewing the originating currency.

HINT: The Intercompany distributions entered on the transaction entrywindows do not show Due To / Due From account breakout. However, thisbreakout is printed on the edit lists and posting journals.

Print another edit list to verify the changes made are correct and post the batchfrom the Batch Entry, Series Posting, or Master Posting window.

Post in Destination Companies

Pull up the transaction in the destination company's General Ledger. The batchsent over to each destination company's General Ledger must be posted in thedestination company for it to become a permanent part of that company's records.The transactions in the destination companies are not selected as Intercompany.However, these transactions are assigned an intercompany audit trail code. Thisunique intercompany audit trail code gives the ability to print reports for allintercompany generated transactions.

The transaction can be edited prior to posting if needed. MultidimensionalAnalysis information can also be entered and edited on any distributionsdestination company at this time. Always print a General Transaction Edit Listbefore posting and verify the accuracy of the transactions entered.

To print a transaction edit list select Print from the File menu or click thePrinter icon. An edit list can be printed from either the Batch Entry orTransaction Entry window, as long as a Batch ID is entered.

If errors are identified on the edit list, correct the transaction errors and printanother edit list before posting. Post the transaction using Batch Entry, SeriesPosting, or Master Posting windows.

Intercompany Audit Trail Codes

The Batch ID assigned to the intercompany batch in the destination company isICTRX, ICTHS, or ICREV, with the next audit trail code number from theoriginating company appended to it.


4-11


For example, if the next audit trail code number is 00000002 in Company A and an intercompany transaction is posted from Company A to Company B, theBatch ID in Company B is ICTRX00000002.

Audit Trail Code Description

ICTRX

ICTHS

ICREV

Intercompany Transactions: Audit trail code assignedto intercompany transactions posted to open years. This isalso the Batch ID assigned to the batch created in thedestination companies.

Intercompany Historical Transactions: Audit trail codeassigned to intercompany transactions posted to historicalyears. This is also the Batch ID assigned to the batchcreated in the destination companies.

Intercompany Reversing Transactions: Audit trail codeassigned to intercompany reversing transactions posted toopen years. This is also the Batch ID assigned to the batchcreated in the destination companies.



Voiding Intercompany Transactions

To void an intercompany transaction entered in Payables Management, open theVoid Open Payables Transactions window. To open this window, click thePurchasing series button and then click Void Open Transactions on theTransactions content pane in the originating company.

FIGURE 4.4 VOID OPEN PAYABLES TRANSACTIONS WINDOW

Select the Void box and click Void. When the transaction is selected for voiding,the following message appears for intercompany transactions as a reminder tomanually adjust the destination company records.

“This transaction was originally marked as an intercompany transaction. Youmay need to make manual adjustments in other companies.”

HINT: Intercompany transactions can be voided in Payables Management, butthe only entries that are automatically backed out are those in the originatingcompany. Manual adjustments must be made in the destination companies.


4-13


View Intercompany Transactions in Inquiry

Use the Payables Transaction Inquiry - Vendor window to view transaction detailfor intercompany transactions originating in Payables Management. To open thiswindow, click the Purchasing series button and then click Transaction byVendor on the Inquiry content pane.

FIGURE 4.5 PAYABLES TRANSACTION INQUIRY - VENDOR WINDOW

If it is an intercompany transaction, the IC check box is selected.

To view more information about a particular intercompany transaction, highlightit. Drag the pointer over the Document Number column heading or theVoucher/Payment Number column heading and click to zoom to the PayablesTransaction Entry Zoom.

Here, view how the transaction is originally entered in the Payables Transaction Entry window, how the transaction is applied, how the amounts are distributedand how the taxes are calculated.



Intercompany Transactions; GL Inquiry

Use the Journal Entry Inquiry window to view transaction information forIntercompany transactions posted in General Ledger. To open this window, clickthe Financial series button and then click Journal Entry Inquiry on the Inquiry content pane in the destination company.

FIGURE 4.6 JOURNAL ENTRY INQUIRY WINDOW

View any posted journal entry number that did not move to history for thecompany being accessed using this window. View each portion of theintercompany transaction in the inquiry window in both the originating companyand the destination company.

The Intercompany button is available only for an intercompany-generatedtransaction in the destination company. Information such as the originatingcompany name, originating audit trail code and originating journal entry numbercan be viewed.


4-15


Summary

Some key points to remember include:

Intercompany transactions entered in one company's PayablesManagement or General Ledger module creates transactions inanother company's General Ledger.

Revenue or expenses incurred in one company (the originatingcompany) can be tracked as due to or due from amounts in anothercompany (destination company).

Intercompany relationships can be established between companiesregardless of their account formats.

Use inquiry functionality to trace transactions through PayablesManagement and General Ledger.


Test Your Knowledge


Test your knowledge with the following questions.


1. Which of the following methods can be used to enter Intercompanytransactions?

( ) Single transactions

( ) Transactions in a single use batch

( ) Transactions in a recurring batch

( ) Single manual payments


2. What designates a transaction as an Intercompany transaction?

( ) Select the Intercompany check box

( ) Select an account from a destination company when distributing accounts

( ) Use Multidimensional Analysis for a distribution

( ) Post the transaction from another company


4-17


Quick Interaction: Lessons Learned

Take a moment and write down three Key Points you have learned from thischapter:

1.

2.

3.


Solutions

Test Your Knowledge



1. Which of the following methods can be used to enter Intercompanytransactions?

( ) Single transactions

() Transactions in a single use batch

( ) Transactions in a recurring batch

( ) Single manual payments


2. What designates a transaction as an Intercompany transaction?

() Select the Intercompany check box

( ) Select an account from a destination company when distributing accounts

( ) Use Multidimensional Analysis for a distribution

( ) Post the transaction from another company


4-19

Inter Co Configuration-SAP FI

Documents

Transcript of Inter Co Configuration-SAP FI