presentation to oaug - sig atlanta 21-oct-2005. confidential. all trademarks appearing herein belong...
TRANSCRIPT
Presentation to OAUG - SIG
Atlanta
21-Oct-2005
Confidential. All trademarks appearing herein belong to their respective owners.2
Inter – Company Transactions
Confidential. All trademarks appearing herein belong to their respective owners.3
Agenda
Overview of Inter-Company Transactions
Organization Structure
Business case – Solution
Confidential. All trademarks appearing herein belong to their respective owners.4
Movement of Goods : Between Divisions belonging to Same Legal Entity Across more than one Legal Entities within US Across Many International Subsidiaries
Single face to Customer (One Selling Company – Multiple Internal Supply Companies) Selling Company Books Order & Raises Bills on Customer Supply Company drop-ship goods directly to Customer warehouse. Intercompany Billing between Selling and Supply company.
Multiple Selling Companies – Single Supply Companies
Multiple Selling Companies – Multiple Supply Companies
Cross Charging for Goods & Services across Projects
Inter-project Billing between projects owned by different legal entity.
Intercompany Journals
Shared Bank Accounts across Legal Entity : To receive Customer payments To disburse Supplier Payments
Inter-company Transactions
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Business Case
Single face to Customer Single Selling Company – Multiple Supply Companies Multiple Selling Companies – Multiple Supply Companies
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Why Single Face to Customer ?
Customer desired a single ITO face…One Brand
CustomerCustomer
LE 1LE 1
LE 2LE 2
LE 3LE 3
LE 4LE 4
LE 5LE 5
LE 6LE 6
CustomerCustomer
LE 1LE 1
LE-3LE-3LE-2LE-2
LE-4LE-4LE-1
LE-1
LE-3LE-3
LE-4LE-4
LE-5LE-5
LE-6LE-6
LE-2LE-2
CustomersCustomers
1. What the customer was seeing before…multiple legal entities, no single interface
2. Multiple businesses servicing a single customer order…time consuming internal negotiations
3. Multiple acquisitions…many faces to the customer. ITO / Application confusion etc.
Confidential. All trademarks appearing herein belong to their respective owners.7
Parent CompanyParent CompanyFinance
LegalHR IT
“New” Organizational / Legal Entity Structure
Primary Objectives
Single Face to Customer
Compliant Legal Structure & Branding
Rationalize multiple USA Benefit Plans
Re-align people to operational owners
Single ITO Platform
Leadership
Commercial Statutory Entity - CSECommercial Statutory Entity - CSE(Selling Company – Customer facing)(Selling Company – Customer facing)
Commercial Statutory Entity - CSECommercial Statutory Entity - CSE(Selling Company – Customer facing)(Selling Company – Customer facing)
LE - 3LE - 2
Product Line
Product Line
LE - 1 Future Acquisitions
(US / Non-US)
New Simplified Organization / LE Structure
Product Line
Product Line
Home Base Statutory Entities - HBSEHome Base Statutory Entities - HBSE(Supplying Company – Fulfillment Center)(Supplying Company – Fulfillment Center)
Confidential. All trademarks appearing herein belong to their respective owners.8
Oracle Solution : Multi – Org Structure & Transaction Flow (Within US)
USD
Set of Books
LE - US
Selling OU Supplying OU
Average Cost
Entity 1
Average Cost -Entity - 4
Average Cost-
Entity - 3
Average Cost –
Entity 2
Sal
es O
rder
Demand
Sh
ipm
ent
AR
Invo
ice
IC - AP
IC-AR
Sub - Inv Sub - Inv Sub - Inv Sub - Inv
LegalEntity
Operating Unit
Set of Books
Inventory Organization
Sub- Inventories …..
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Oracle Solution : Multi – Org Structure & Transaction Flow (Intl. Outside US)
USD
Set of Books
LE - US
Selling OU Supplying OU
Average Cost
Entity 1
Average Cost -Entity 4
Average Cost-
Entity 3
Average Cost – Entity 2
Sub - Inv Sub - Inv Sub - Inv Sub - Inv
LegalEntity
Operating Unit
Set of Books
Inventory Organization
Sub- Inventories
Non-USD
Set of Books
LE –
Non-US
Supplying
OU
Average Cost
Entity 5
Sub - Inv
Sal
es O
rder
Demand
Sh
ipm
ent
AR
Invo
ice Intercompany AP
Intercompany AR
MRC USD
Set of Books
MRC
Consolidation Set of Books
(Financial Consolidation + I/C Elimination)
Confidential. All trademarks appearing herein belong to their respective owners.10
Oracle Solution : Process Flow DiagramSupply Chain Model - Selling Company (Order Management)
CSE – CSE – Selling Selling
OUOU
HBSE –HBSE –Supplying Supplying
OUOU
Book
Order
Create Receiver
Project
GenerateProgressBill Cycle
from Receiver Project to Customer
RunCreate Inter-
company AP Invoice
RunCreate Inter-
company AP Invoice
Auto invoice Import
Auto invoice Import
Ship Goods to
Customer
Ship Goods to
Customer
Auto Invoice
Import Inter-company
Auto Invoice
Import Inter-company
Manual Automatic
Inter- company
InvoiceSettlement
& Elimination
Inter- company
InvoiceSettlement
& Elimination
Manual or Automatic
RunCreate Inter-
company AR Invoice
RunCreate Inter-
company AR Invoice
Custom Program
updates the Inter-Co Inv
Amount
Custom Program
updates the Inter-Co Inv
Amount
Import Inter-
Company AP invoice
Import Inter-
Company AP invoice
Select One of the Fulfillment Org as Shipping Warehouse on Sales
Order
Select One of the Fulfillment Org as Shipping Warehouse on Sales
Order
Confidential. All trademarks appearing herein belong to their respective owners.11
Oracle Solution : Process Flow DiagramManufacturing Model - Selling Company (Project Accounting)
CSE – CSE – Selling Selling
OUOU
HBSE –HBSE –Supplying Supplying
OUOU
Book Order
Create Receiver Project
GenerateProgressBill Cycle
From Receiver Project
Import Inter-
company AP Invoice
Import Inter-
company AP Invoice
GenerateFinal
Bill and Recognize Revenue
GenerateFinal
Bill and Recognize Revenue
Accumulate Cost against
Provider Project
Accumulate Cost against
Provider Project
Ship Goods to Customer
Ship Goods to Customer
Generate an Intercompany AR invoice on
CSE from Provider Project
Generate an Intercompany AR invoice on
CSE from Provider Project
Manual Automatic
Inter- company
InvoiceSettlement
& Elimination
Inter- company
InvoiceSettlement
& Elimination
Manual or Automatic
Book
Order
Select One of the Fulfillment Org as Shipping Warehouse
on Sales Order
Select One of the Fulfillment Org as Shipping Warehouse
on Sales Order
Create Receiver Project
Confidential. All trademarks appearing herein belong to their respective owners.12
Oracle Solution : Setup Details & Customization DetailsSelling Company
Module Involved : OM, AR, AP, INV )
Supply Chain Model
Define Intercompany Customer & Supplier
Create Intercompany Relationship in Inventory Module
Setup Auto-accounting Rule in AR
Setup AR Transaction Type and link to Order Transaction Type.
Create Custom Program to calculate Transfer price and update AR Auto invoice Interface table.
Modules Involved : (OM,PA, INV, AR, AP)
Manufacturing
Define Intercompany Customer & SupplierDefine Implementation option in PA (Internal Billing)
Define Billing extension. (Optional)
Set up Automatic Billing (Optional).
Setup Auto-accounting Rule in PA
Setup Auto-accounting Rule in AR
Setup AR Transaction Type and link to Order Transaction Type.
Define and link Receiver project & Provider project. (Required)
Create custom program in AP to handle one to many Supplier relationship.
Confidential. All trademarks appearing herein belong to their respective owners.13
Operational Structure – Process Flow & Accounting
Order BookingOrder Booking
Intercompany AR Invoice
Intercompany AR Invoice
Order Assignment(Internal Demand)Order Assignment(Internal Demand)
Ship to CustomerShip to Customer
Invoice to CustomerInvoice to Customer
CSE Books order from Customer
CSE Assigns order to appropriate HBSE
business @ Established TP
• HBSE business drop-ships parts to Customer Warehouse.
• CSE raises Invoices to Customer.
• HBSE raises an Inter-company AR invoice on CSE @ agreed Transfer Price.
Make / BuyMake / Buy HBSE makes or buys Parts
Intercompany APInvoice
Intercompany APInvoice
Intercompany Settlement & Elimination
Intercompany Settlement & Elimination
• CSE creates an Inter-company AP invoice on HBSE @ agreed Transfer Price
• Intercompany Revenue (HBSE) is eliminated with COGS (CSE)
• Due From & Due To Elimination
No Accounting EntriesNo Accounting Entries
Dr. Due From CSE (HBSE – LE)Cr. Internal Revenue (HBSE – LE)Dr. Due From CSE (HBSE – LE)Cr. Internal Revenue (HBSE – LE)
No Accounting EntriesNo Accounting Entries
Dr. COGS (HBSE – LE)Cr. Inventory (HBSE-LE)Dr. COGS (HBSE – LE)Cr. Inventory (HBSE-LE)
Dr. External Receivables (CSE-LE)Cr. External Revenue (CSE – LE)Dr. External Receivables (CSE-LE)Cr. External Revenue (CSE – LE)
Dr. Inventory (HBSE-LE)Cr. Cash (HBSE-LE)Dr. Inventory (HBSE-LE)Cr. Cash (HBSE-LE)
Dr. Internal COGS (CSE-LE)Cr. Due To HBSE (CSE – LE)Dr. Internal COGS (CSE-LE)Cr. Due To HBSE (CSE – LE)
a) I/C Revenue & COGS Elimtnb) DF/ DT Eliminationa) I/C Revenue & COGS Elimtnb) DF/ DT Elimination
Confidential. All trademarks appearing herein belong to their respective owners.14
Contact Information
Name : Hari Mundhra
E-Mail : [email protected]
Phone : +1-678-844-4062
www.genpact.com
Confidential. All trademarks appearing herein belong to their respective owners.15
Disclaimer
This presentation was prepared exclusively for the benefit and internal use of Genpact in order to indicate, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure to any other party. This presentation is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Genpact. Neither this presentation nor any of its contents may be used for any other purpose without the prior written consent of Genpact.