Table of Contents

 Introduction of SAP Intercompany sales process

 Benefits of Intercompany sales process
 Pre-requisites for intercompany
 Inter Company Invoice Posting
 Intercompany Configurations
o Define Order Types For Intercompany Billing:
 Menu Path: IMG- > Sales & Distribution->Billing->Inter Company Billing->Define
Intercompany Billing Order Types.
o Assign Organizational Units by Delivering Plant:
 Menu Path: IMG- > Sales & Distribution->Billing->Inter Company Billing->Assigning
Organizational Units by Plant
o Assign Plant to Sales Organization and Distribution Channel:
 Menu Path: IMG->Company Structure->Assignment->Sales and Distribution->Assign
Plant to Sales Organization and Distribution Channel.
o Define Internal Customer Number By Sales Organization:
 Menu Path: IMG- > Sales & Distribution->Billing->Inter Company Accounting->Define
Internal Customer Number by Sales Organization.
 Master Data –Preparation
o Create Internal Customer Number By Sales Organization:
 Menu Path: Easy Access- > Logistics- > Sales and Distribution- > Master Data- >
Customer- > Create.(XD01)
o Master Data – Extend the material in the Delivery Plant
 Menu Path: Easy Access- > Logistics- > Sales & Distribution- > Master Data- >
Products- > Material- > Other Materials- > Change.
 Condition Type Configurations
o
  Menu Path: IMG -> Sales and Distribution ->Basic functions -> Pricing-> Pricing
Control -> Define Condition type.(T-code: V/06)
 Master Data – Condition Records
o
 Menu Path: Easy Access ->Logistics -> Sales and Distribution -> Master Data ->
Conditions -> Select using Condition Type ->Create
 Transaction Steps – Order Creation
o
 Menu Path: Easy Access -> Logistics -> Sales & Distribution -> Sales -> Order ->
Create
 Transaction Processing – Outbound Delivery
 Transaction Processing – Billing Document
o
 Menu Path: Easy Access- > Logistics- > Sales & Distribution- > Billing- > Document
Billing- > Create (VF01)
o F2 Invoice
o IV Intercompany Invoice
 Posting of the Inter Company Invoice

Introduction of SAP Intercompany sales process

This SAP tutorial will concentrate on understanding of SAP Intercompany sales process. Intercompany sales
processing allows a company to sell goods from a Plant assigned to another company code.
Intercompany sales processing shall be initiated with the sales organisation creating an order for the delivery
plant belonging to another company code.

The system checks sales organization and distribution plant company codes and conducts intercompany billing
processing via Inter-Company Billing document automatically.

The plant in the company code of delivery delivers the goods to the customer for whom the sales organization
has placed the order.

In this case, two billing documents are created:

 The customer billing document that is sent from the sales organization to the customer who receives
the goods.
 •An Inter-Company billing document that is forwarded from the delivery plant to the sales
organization
An inter-company business transaction is where sales transactions (sales orders and billing document) for the
sale of materials are carried out in a company code different from that used for the storage, production and
delivery of those materials. This business transaction often occurs in corporate groups where, for example, the
subsidiaries are entrusted with sales-related operations, while the actual production takes place exclusively in
the parent company.

Intercompany business therefore typically requires the actual sale of products to “external customers” to be
accompanied by an internal allocation between the subsidiary (sales company code) and the parent company
(suppliers company code).

Billing documents for such transactions must be generated both in the company code of production and in the
company code that sells the product to the end customer.
Intercompany Process flow

Benefits of Intercompany sales process

 This prevents the company from pre-supplying the goods in its own warehouse and can choose from
whom to deliver the goods to the customer.
 Allows all company codes to share inventory information, track inter-company shipments, and view
automatic FI postings and settlements.
 Automatic Inter-Company account reconciliation and settlement In-transit inventory visibility and
reporting
 Workload reduction in processing invoices
 Eliminate invoicing errors
 Eliminates reconciliations
Pre-requisites for intercompany
 The ordering sales organization and the delivery plant must be governed by different company codes.
 The required combination of the Sales Organization and the Delivery Plant must be maintained.
 Sales Area – Sales Organization, Distribution Channel and Division shall be assigned to all plants in
which the sales processing of Intercompany is carried out.
 Intercompany Billing Document type must be assigned to the type of sales document required.
 In order to represent the ordering Sales Organization, an internal customer number must be
established in the Sales Organization representing the delivery plant.
 Materials must be available in all plants participating in the Intercompany Sales process.
 Condition types representing the processing of sales by Intercompany shall be maintained in the
pricing procedure.
 Condition records for the required combination of sales organization and plant must be maintained
Inter Company Invoice Posting
The delivery company and the ordering company are part of the same company. The intercompany billing
document for the delivery company is therefore posted as the receipt of the invoice for the ordering company.

The ordering company can post an invoice receipt either:

 Manually after delivery of the goods, the invoice document can be printed with the help of the output
type RD00, which is then sent to the end customer.
 Automatically with an intercompany billing document: through IDOC / EDI. The system uses the
output type RD04 included in the output determination procedure V40000, which is assigned to the
internal billing type.
The delivery company must be set up as a supplier or vendor in order to be able to create the financial
document of the ordering company.

Inte
r Company Sales Flow
Intercompany Configurations
Define Order Types for Intercompany Billing:
Intercompany billing document type IV is assigned to all types of order documents for which intercompany
sales processing may be carried out.

Menu Path: IMG- > Sales & Distribution->Billing->Inter Company Billing->Define Intercompany Billing Order
Types.

Define Order Types for Intercompany Billing:

Assign Organizational Units by Delivering Plant:

The sales organization, Distribution Channel and Division are allocated to plants for which inter-company
processing of sales is possible. Delivery Plant uses these specifications to process intercompany billing.
Menu Path: IMG- > Sales & Distribution->Billing->Inter Company Billing->Assigning Organizational Units by
Plant

Define Order Types for Intercompany Billing:

Assign Plant to Sales Organization and Distribution Channel:

Sales Organization and Distribution Channel must be assigned to the Delivery Plant to enable the processing of
sales.

Menu Path: IMG->Company Structure->Assignment->Sales and Distribution->Assign Plant to Sales

Organization and Distribution Channel.

Assign Plant to Sales Organization and Distribution Channel

Define Internal Customer Number by Sales Organization:
The Internal Customer Number must be assigned to the Ordering Sales Organization.

Menu Path: IMG- > Sales & Distribution->Billing->Inter Company Accounting->Define Internal Customer
Number by Sales Organization.
 Define
Internal Customer Number by Sales Organization:

Master Data –Preparation

Create Internal Customer Number by Sales Organization:
The Customer Master Record shall be established in the Sales Organization representing the Delivery Plant.
The sales organisation belonging to the Code of the Ordering Company shall be the internal customer.

Menu Path: Easy Access- > Logistics- > Sales and Distribution- > Master Data- > Customer- > Create. (XD01)

Define Internal Customer Number by Sales Organization:

Master Data – Extend the material in the Delivery Plant

Enter the Delivery Plant in the material master records that will be relevant to the sales transaction will be
carried out by the Ordering Sales Organization. Extend the material master records in the Delivery Plant: Enter
the Delivery Plant in the material records that will be relevant to the sales processes carried out by the
Ordering Sales Organization.

Menu Path: Easy Access- > Logistics- > Sales & Distribution- > Master Data- > Products- > Material- > Other
Materials- > Change.
 Ex
tend the material in the Delivering
Condition Type Configurations
Creating Intercompany Condition Types: The delivery plant uses one of the following condition types to bill the
sales organization.

 PI01 Intercompany: fixed amount per unit of material

 PI02 Intercompany: percentage of the amount of the net invoice.
 These conditions specify that the price charged by the delivery plant to the sales organization shall be
shown as a statistical value in the order of sale and as an effective charge in the internal invoice.
Menu Path: IMG -> Sales and Distribution ->Basic functions -> Pricing-> Pricing Control -> Define Condition
type. (T-code: V/06)

Condition Type
Master Data – Condition Records
Creating Inter Company Condition Records:

 PI01 Intercompany: fixed amount per material unit

 PI02 Intercompany: percentage of the net invoice amount.
Menu Path: Easy Access ->Logistics -> Sales and Distribution  ->  Master Data  ->  Conditions -> Select using
Condition Type ->Create
All Setup has been done, now let’s create intercompany transaction
Transaction Steps – Order Creation
Menu Path: Easy Access -> Logistics -> Sales & Distribution -> Sales -> Order -> Create
Create Order: The ordering Sales Organization shall prepare the order for sale. The system shall check the
company codes and the authorized combinations of the ordering sales organization and the delivery plant for
the implementation of the Inter-Company Billing process.

Sales order initials creation

Intercompany Sales Order Creation

The system automatically performs pricing in accordance with the pricing procedure assigned to the sales
organization. The intercompany charge (PI01 / PI02) appears as a statistical value on the sales order screen
conditions-the charge has no effect on the final value of the customer’s order. The intercompany charge is not
printed on the customer’s documents.

Sales Order Item Pricing condition

Transaction Processing – Outbound Delivery
Delivery shall be effected by the Ordering Company from the Shipping Point assigned to the Delivery Plant.
Outbound Delivery

Transaction Processing – Billing Document

Menu Path: Easy Access- > Logistics- > Sales & Distribution- > Billing- > Document Billing- > Create (VF01)
The Ordering Company creates the invoice for the end customer. The Payer and the Company Code are
derived from the Order created by the Ordering Company Code

F2 Invoice

Intercompany Billing Document

The Company associated with the Delivery Plant bills the Ordering Company through the Inter-Company Billing
Document. The Payer Code and the Company Code are derived from the Order of the Order of the Company.

IV Intercompany Invoice

IV Intercompany Invoice
Posting of the Inter Company Invoice
Manual invoice posting is done after Post good issue has been done and systems prints invoice document
using the output type RD00, which is then sent to the end customer. The intercompany accounting transaction
is automatically posted via IDOC / EDI The system uses the output type RD04 included in the output
determination procedure V40000, which is assigned to the internal billing type.
Automatic posting of the intercompany billing

For the system to determine another delivering plant for the material in the customer order item, when
entering a sales document:

 Ensure that the same delivering/supplying plant is maintained in the Customer material info record if
any.
 The internal customer master for the delivering sales organization must also contain the same plant.
The delivery company must be set up as a vendor in order to be able to publish the financial document of the
ordering company.