Inter-company Sales

An inter-company sale occurs when the sales organization arranges the materials from a delivering plant that is assigned to another company code. In this process the delivering plant deliver the goods to the customer and bills the ordering company code. Intercompany sales process consist three stages they are: 1) Sales order processing 2) Delivery Processing 3) Billing

Inter-company sales __ Process Flow.

1) When you enter a sales order the system automatically determine the plant for the items based on the standard plant determination rule. During availability check if you found that the required material is not available in any of the plants of your company code but it is available in a plant that is assigned to an another company code, you can overwrite the proposed delivering plant. This will initiate an inter-company sales transaction. 2) If you want to deliver an item from a plant that is assigned to a different company code, then you must configure that Plant as a delivering plant of your Distribution Chain (Sales organization and Distribution channel) in customizing. Otherwise you cant deliver the goods from that plant. 3) The system process the delivery as any other normal delivery by selecting a shipping point that is assigned to that delivering plant. 4) The delivery in inter-company sales may have to be processed for billing twice. 5) Once the goods issue is posted the sales organization of the selling company code bill the customer. In turn the selling company code of the delivering plant automatically billed to the internal payer that is assigned to the sales organization of the selling company code. 6) The billing document type for inter-company sales is IV.

Inter-company sales __ Pre-requisites.

The following data must be defined in Customizing for Sales for iner-company transaction:

1) For intercompany sales processes you must maintain a billing type IV and assigned to the relevant sales document types.

2) Billing type IG is used for internal credit memos. 3) Output type RD04 is used to enable intercompany billing to carry out posting to vendor account or invoice entry. In the standard system, billing type IV is assigned to output procedure V40000, which contains this output type. 4) The delivery document type for inter-company transaction is LF. 5) You must maintain relevant copy control in customizing for documents.

6) For performing an Inter-company sales transaction the processing of the material should be extended in both the plants. That means the material should exist in both the plants. 7) You have to define the relevant pricing procedure for the transactions: ICAA01 for intercompany pricing and RVAA01 for the customer. 8) The following condition types need to maintain for inter-company sales:

A. PI01 (fixed amount per material unit)

B. PI02 (percentage of the net invoice amount)

9) Permissible combinations of plant and sales organization must be defined

10) Sales area data (sales organization, distribution channel, and division) must be assigned to each plant that participates in intercompany sales processing

11) You must define an internal customer number by Sales Organization: That means you have to create a dummy customer master under the company code of the delivering plant. This customer number has to be assigned to the sales organization of the ordering company code.

Some key points to remember

1) The condition table for the condition type PI01 will be created with the combination of the following fields Ordering sales Org, Supplying Plant, and Material. 2) The system will determine the pricing procedure ICAA01 based on Sales Area (of supplying company code), Document pricing Procedure of Billing document type IV and Customer Pricing Procedure of the internal customer. 3) The condition type PI01 in the pricing procedure ICAA01 is a statistical condition type and meant for information purpose only. 4) Pricing Procedure ICAA01 has condition type IV01 that represents revenues for Supplying company code in the intercompany billing.