In an intercompany organization, you can set up parameters that determine the way you trade between your different companies. These parameters are determined by fields that you select, and you can choose different combinations to reflect different trading scenarios.
The following two examples illustrate an intercompany organization with two levels and one with three levels.
Example 1 (two-level intercompany chain)
The setup of parameters in Example 1 is for an intercompany organization with a selling company (A) that sells to external customers but has no stock and, therefore, buys from an internal company (B), which only sells to the selling company (A). This relationship can be both ways, for example, both companies selling and buying from each other.
In this example, the pricing on the original sales order, which is directed to the external customer, is always based on the sales price. The pricing on the intercompany sales order and the intercompany purchase order is controlled by the internal sales/transfer pricing on the intercompany sales order in the internal selling company (B).
The order header information is controlled from the original sales order to the end customer. Any change on the intercompany sales order is NOT synchronized to the original sales order.
In the form for the purchase order (in company A), select the following fields under Original sales order (direct delivery):
Under Intercompany purchase order (direct delivery), select the following:
Under Synchronization between the original sales order and the intercompany purchase order, select the following fields:
Under Synchronization from the intercompany purchase order to the intercompany sales order, select the following fields:
In the form for the sales orders (in company B), select the following fields under Intercompany sales order creation:
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:Company + original number
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:Yes
Under Intercompany sales order prices, select the following fields:
Under Synchronization from the intercompany sales order to the intercompany purchase order, select the following fields:
The preceding example illustrates the best practices for a two-level intercompany chain.
Example 2 (three-level intercompany chain):
In Example 2 there are three (or more) internal companies who are buying and selling from/to each other.
The three companies are: company A, which sells to external customers and buys from company (B); company B that cannot deliver and must buy from another internal company (C); and company C that delivers to company B. Both companies (B + C) are production or distribution companies, whereas company (A) is a sales company.
Internal transfer pricing between the production and distribution companies (B+C) are at cost from the selling company at the start of the chain, and at cost to the company (A) selling to the end customer. However, pricing on the original sales order to the end customer is always based on the sales price.
Pricing on all intercompany sales orders and intercompany purchase orders is controlled on the intercompany sales order at the start of the chain (company C (selling to company B) controls the price). Intercompany sales order pricing is based on internal sales/transfer pricing stored in the internal selling company C.
The order header information is controlled from the original sales order to the end customer. Any change on the intercompany orders is NOT synchronized to the original sales order.
The following parameters should be selected:
From company (A) to company (B), in the form for the purchase order select the following fields under Original sales order (direct delivery):
Under Intercompany purchase order (direct delivery), select the following:
Under Synchronization between the original sales order and the intercompany purchase order, select the following fields:
Under Synchronization from the intercompany purchase order to the intercompany sales order, select the following fields:
In the form for the sales orders (in company B), select the following fields under Intercompany sales order creation:
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:Company + original number
-
:Yes
Under Synchronization from the intercompany sales order to the intercompany purchase order, select the following fields:
Under Intercompany sales order invoice posting:
In company (B) to company (C), in the form for the purchase order, select the following fields under Original sales order (direct delivery):
Under Intercompany purchase order (direct delivery), select the following:
Under Synchronization between the original sales order and the intercompany purchase order, select the following fields:
Under Synchronization from the intercompany purchase order to the intercompany sales order, select the following fields:
In company (C) to company (B), in the form for the sales orders, select the following fields under Intercompany sales order creation:
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:Number sequence
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:Yes
Under Intercompany sales order prices, select the following field:
Under Intercompany sales order invoice posting:
Under Synchronization from the intercompany sales order to the intercompany purchase order, select the following fields:
The preceding example illustrates the best practices for a three-level intercompany chain.
