this presentation is intended to outline our general product direction. it is intended for...
TRANSCRIPT
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This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Intercompany Accounting and Transfer Pricing in Oracle EBS 11i.10
Rixin ZhuManager, Cost Management Systems
Oracle USA, Inc.
March, 2006
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1-2This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Agenda
• Overview• Supported Flows and Features• Logical Transactions• Parent Transactions• Accounting• Setups• Material Transactions and Distributions Forms
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1-3This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Overview
• Support of Internal Order Transfer Available in 11i.9– Transfer Pricing + Intercompany Invoicing
• Enhanced Drop Shipment and Shared Procurement Available in 11i.10 – Internal Drop Shipment to Customer– Shared Procurement– External Drop Shipment
• Cross-Product Effort:– Inventory– Purchasing (Receiving)– Order Management– Cost Management– AR/AP
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1-4This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
White Papers
• Transfer Price Accounting in Oracle SCM, Feb 2006 (Metalink Note: 360106.1)
• Overview of Intercompany Invoicing, July 2005 (Metalink Note: 336129.1)
• Intercompany Invoicing and Advance Pricing Integration, May 2002 (Metalink URL: https://metalink.oracle.com/cgi-bin/cr/getfile.cgi?p_attid=72450.1:284025)
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1-5This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Internal Order Transfer
Features
• Account for the shipment as an (external) Sales Order and account for the receipt as a Purchase Order.
• Deriving the Cost of Goods Sold Account for the shipping organization as per the standard Oracle functionality.
• Customers can choose whether to use the Transfer Price as the incoming cost to the receiving organization.
• Internal profit margin is supported in Margin Analysis Report.
Sending OrganizationInventory Cost: $102
Receiving OrganizationInventory Cost: $108
Transfer Price: $120
Limitations
• No support of return and correction.
• Only support transfers across operating units.
• Only in-transit transfers are supported.
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1-6This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Enhanced Drop Shipment and Shared Procurement
• Separate financial transaction flows from physical flows
• Support infinite number of intermediate operating units
• Allow intermediate operating units to record COGS and Revenue on the logical internal sale of goods
• Support documents for the transaction flow (intercompany invoices)
• Support forward as well as return flows
• Costing features– Perform all of the Inventory accounting distributions for a
transaction flow in a single commit cycle, and display them together on the form
– Costs and Quantities in intermediate organizations are not impacted
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1-7This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Transaction FlowsShared Procurement
Shared Procurement
• Purchase order is created in operating unit P and received in a warehouse in operating unit T, with one or more intermediate operating units
• Execution of the receipt (into RI) in warehouse T kicks off the creation of receiving accounting events and logical inventory transactions in I and P.
• Accounting takes place in all operating units to record the obligations and intercompany COGS / revenue.
• Item costs and quantities in the procuring and intermediate operating units are not impacted
Procuring OU
SP
Ship To OU
T I
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1-8This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Transaction FlowsInternal Drop Shipment to Customer
Internal Drop Shipment to Customer
• Order is booked in operating unit O and shipped from a warehouse in operating unit F, with one or more intermediate operating units (source type: internal)
• Execution of the ship confirm from warehouse F kicks off the creation of logical inventory transactions in I and O
• Accounting takes place in all operating units to record the revenue and COGS for the transaction
Ship From OU
C I
Order-Booking OU
FO
Limitation
• Internal drop shipment to internal organization is not supported. For example, if C is an internal organization and it is an internal sales order.
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1-9This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Transaction FlowsExternal Drop Shipment
External Drop Shipment
• Order is booked in operating unit O and specifies a ship-from warehouse in operating unit F/T, with one or more intermediate operating units (source type: external).
• Run requisition import in F/T to create a requisition for the item.
• Run Autocreate process in F/T to create a purchase order. Be sure to specify operating unit P as the procuring OU, specify the supplier S, and the warehouse in F/T as the ship-to location for the PO. Approve the PO in operating unit P.
• Execute the direct delivery receipt in warehouse F/T to kick off the creation of RCV accounting events and INV logical transactions.
Ship From/To OU
C I
Order-Booking OU
F/TO
Procuring OU
SPI
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1-10This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Procuring OU
SP
Ship To OU
T I
Logical TransactionsProcurement Flow
Functional Event: Perform Receive (into RI) in warehouse T
The following logical transactions are created in INV as a result
• P logical PO receipt
logical intercompany sales issue
• I logical intercompany procurement receipt
logical intercompany sales issue
• T <none>
RECEIVE LOGICAL RECEIVE LOGICAL RECEIVE
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1-11This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Logical TransactionsShipment Flow
Functional Event: Perform Ship Confirm out of warehouse F
The following transactions are created in INV as a result
• F [physical] sales order issue
logical intercompany sales issue
• I logical intercompany shipment receipt
logical intercompany sales issue
• O logical intercompany shipment receipt
logical sales order issue
Ship From OU
C I
Order-Booking OU
FO
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1-12This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Ship From/To OU
C I
Order-Booking OU
F/TO
Procuring OU
SPI
Logical TransactionsExternal Drop Shipment
Procurement + Shipment flow
Functional Event: Perform DIRECT DELIVERY receipt of item into warehouse F/T
The following logical (no physical) transactions are created in INV as a result• P logical PO receipt
logical intercompany sales issue• I logical intercompany PROCUREMENT receipt
logical intercompany sales issue• F/T logical PO receipt – replaces delivery to inventory
logical intercompany sales issue• I logical intercompany SHIPMENT receipt
logical intercompany sales issue• O logical intercompany SHIPMENT receipt
logical sales order issue
DELIVER
RECEIVE LOGICAL RECEIVE LOGICAL RECEIVE
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1-13This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Parent Transactions
• Accounting for all related logical events created at once
• Grouping is achieved by linking all logical events together via the parent transaction ID – new column in mtl_material_transactions
• Parent transaction is always in the FROM operating unit of the flow– Physical transaction if one exists (shipment flows): sales order issue and
RMA receipt– Logical transaction otherwise: Logical PO receipt and Logical RTV in
procurement flows. Logical PO receipt during deliver in shipment flows of external drop shipments
• All accounting for a single flow is displayed together on the Material Distributions form (grouped together by parent transaction ID)
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1-14This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Parent Transactions
Logical PO receipt
Procurement Flows
Forward
Logical RTV
Return
[physical] Sales Order Issue
Shipment Flows
[physical] RMA receipt
S S
C C
Shipment Flow –
External Drop Ship Logical PO Receipt (created during direct deliver)
C …
P P
P P
P
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1-15This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Accounting – Internal OrderOption 1: Price As Incoming Cost
Event
INV Valuation
(O1)
Sending Organization O1Inventory Cost: $102
Receiving Organization O2Standard Cost: $108
Transfer Price: $120
FOB Shipment
COGS
(O1)
1. Shipment 102 102
In-transit
(O2)
Accrual
(O2)
PPV
(O2)
108 120 12
INV Valuation
(O2)
2. Receipt 108 108
I/C Receivable
(O1)
I/C Revenue
(O1)
3. I/C AR 120 120
I/C Payable
(O2)
4. I/C AP 120 120
Accrual
(O2)
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1-16This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Accounting – Internal Order Option 2: Price Not As Incoming Cost
Event
INV Valuation
(O1)
Sending Organization O1Inventory Cost: $102
Receiving Organization O2Standard Cost: $108
Transfer Price: $120
FOB Shipment
COGS
(O1)
1. Shipment 102 102
In-transit
(O2)
Accrual
(O2)
PPV
(O2)
INV Valuation
(O2)
2. Receipt 108 108
I/C Receivable
(O1)
I/C Revenue
(O1)
3. I/C AR 120 120
I/C Payable
(O2)
4. I/C AP 120 120
Accrual
(O2)
Profit In Inventory
(O2)
108 1206 18
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1-17This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
AccountingProcurement Flow – P
Ship From/To OU
C I2
Order-Booking OU
F/TO
Procuring OU
SPI
1020
Event
1. RCV Receive
2. INV Log PO Rcpt
3. INV Log I/C Ship
Accrual ClearingInv
Valuation I/C COGS
10 10
10 10
10 10
30405060
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1-18This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Ship From/To OU
C I2
Order-Booking OU
F/TO
Procuring OU
SPI
AccountingProcurement Flow – I
Event
1. RCV Receive
2. INV Log I/C Proc Rcpt
3. INV Log I/C Ship
I/C Accrual ClearingInv
Valuation I/C COGS
20 20
20 20
20 20
102030405060
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1-19This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Ship From/To OU
C I2
Order-Booking OU
F/TO
Procuring OU
SPI
AccountingShipment Flow – F/T
Event
1. RCV Receive
2. INV Log PO Rcpt
3. INV Log I/C Ship
ClearingInv
Valuation I/C COGS
30 30
30 30
30 30
102030405060
I/C Accrual
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1-20This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Ship From/To OU
C I2
Order-Booking OU
F/TO
Procuring OU
SPI
AccountingShipment Flow – I2
102030405060
Event
1. INV Log I/C Ship Rcpt
2. INV Log I/C Ship
Inv Valuation I/C COGS
40 40
40 40
I/C Accrual
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1-21This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Ship From/To OU
C I
Order-Booking OU
F/TO
Procuring OU
SPI
AccountingShipment Flow – O
102030405060
Event
1. INV Log I/C Ship Rcpt
2. INV Log SO Issue
Inv Valuation I/C COGS
50 50
50 50
I/C Accrual
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1-22This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
SetupsTransaction Flow
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1-23This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
SetupsIntercompany Relations
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1-24This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
SetupsTransfer Price
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1-25This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
FormsMaterial Transactions Form
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1-26This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
FormsMaterial Distributions Form
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1-27This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
FormsMaterial Distributions Form (2)
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This presentation is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in making a purchasing decision.
Thank You.