SD2005: Inter Company Sales

Order
XXXX
Cust Deliv
Inv ery
$$$ XXXX

Inter
Co.
Inv

India SAP CoE, Slide 1

Inter Company Sales…?
Inter company sales is the process in which a certain legal
entity sells products from within a delivering plant that does
belong to another legal entity.

A company arranges for direct delivery of goods to its

customers from the stocks maintained by the other company,
but belonging to the same corporate organization. Thus
leading to Inter Company Sales.

This prevents the company from over stocking the goods

beforehand in the their own warehouse and can choose from
whom to deliver the customer.

India SAP CoE, Slide 2

Inter Company Sales
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 3
Inter Company Sales
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 4
Purpose
Occasionally we come across companies that operate several companies
and carry on trading of goods and services among themselves. A Customer -
Vendor relationship is established between them.

The organization may be required to handle several production and sales

companies. They have to ensure that the flow of documents between two
companies adheres to the same overall organization.

Prices need to be set up either as the cost price + extra charges or by trade
agreements. Any change in values or information need to be synchronized
immediately in the other company.

A process shall enable to ensure the integrity of orders and documents in

during sales

India SAP CoE, Slide 5

Use
• Inter Company Sales process prevents the company from
over stocking the goods beforehand in the their own
warehouse and can choose from whom to deliver the
customer.

• Enables all company codes to share information on

inventories, tracking inter-company shipments, and viewing
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

India SAP CoE, Slide 6

Challenges

• What should be the transfer price for the inventory

moving across the company codes.

• How should the postings-both units and valuation, be

made to FI for the goods moved.

• Automatic synchronization and updates of trading

documents

India SAP CoE, Slide 7

Inter Company Sales
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 8
Inter Company Sales
Inter company sales processing allows a company to sell goods from a plant
which is assigned to another company code.

Inter company sales processing is initiated with the sales organization

creating an order on the delivering plant belonging to a different company
code

The system checks the company codes of the sales organization and of the
delivering plant and automatically carries out inter company billing
processing thru Inter Company Billing document.

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

Two billing documents are created in this case:

• A customer billing document which is sent from the sales

organization to the customer who receives the goods.
• An Inter Company Billing document which is sent from the
delivering plant to the sales organization.

India SAP CoE, Slide 9

Inter Company Sales
Order
XXXX
1

Customer Ordering Sales

1000 Organization
2

A sales
organization
which is 2 3000
assigned to the
ordering
company code
creates a sales
order ordering Delivering
goods from the Plant
plant assigned
to another
company code.

India SAP CoE, Slide 10

Inter Company Sales

3000

3 Customer
Delivering Plant
The plant in the
delivering
company code
delivers the
goods to the
customer for
whom the sales
organization
placed the order.

India SAP CoE, Slide 11

Inter Company Sales
3000

5
Ordering Sales
1000 Organization The delivering Delivering
company then Plant
4 bills the ordering
company for the
4 goods delivered
The to the customer
ordering by means of Inter
sales Company Billing
organization document.
bills the
customer
for the
goods
delivered

Customer

India SAP CoE, Slide 12

Pre-requisites – Org‟ Units
• The ordering sales organization and delivering plant must
belong to different company codes.

• Required combination of Sales Organization and Delivering

Plants have to be maintained.

• Sales Area-Sales Organization, Distribution Channel and

Division, must be assigned to all the plants in which Inter
company sales processing is being carried out

India SAP CoE, Slide 13

Pre-requisites – Org‟ Units
ABC GROUP

Plant: Y

Plant:B

Plant:A

Plant:C

Plant: X 3000
1000

Company Code:1000 Company Code:3000

India SAP CoE, Slide 14

Pre-requisites – Others
• Inter company Billing Document type must be assigned for
required sales document types.

• An internal customer number must be created, to represent the

ordering Sales Organization, in the Sales organization
representing the delivering plant.

• Material must exist in all the plants participating in Inter

Company Sales process.

• Condition types representing the Inter company sales processing is to

be maintained in the pricing procedure.

• Condition records have to be maintained for the required combination

of sales organization and plants

India SAP CoE, Slide 15

Posting of the Inter Company
Invoice
The delivering company and the ordering company belong to the same
corporation. Therefore, the inter company billing document for the
delivering company is posted as invoice receipt for the ordering company.

The ordering company can post an invoice receipt either:

• manually after posting goods issue and can print out

an invoice document with the help of output type RD00, which is
then sent to the end customer or
• automatically with the inter company billing document: via
IDOC/EDI. The system uses the output type RD04 contained in the
output determination procedure V40000, which is assigned to
internal billing type.

The delivering company must be created as a vendor to enable posting to

the financial document of the ordering company.

India SAP CoE, Slide 16

Inter Company Sales: Flow
CC 1000 CC 3000

1000 3000 Delivering Plant

Sales Order
Outbound
Delivery

Post Goods Issue

Customer
Inter Company
Invoice
Invoice

Accounts
Receivable

Accounts Accounts
Payable IDOC Receivable

India SAP CoE, Slide 17

Inter Company Sales
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 18
Configurations
Define Order Types For Inter company Billing:
Inter company billing document type „IV‟ is assigned to all those order document
types for which inter company sales processing can be carried out.

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

India SAP CoE, Slide 19

Configurations
Assign Organizational Units by Delivering Plant:
Sales organization, Distribution Channel and Division are allocated to the plants
for which intercompany sales processing is possible. The delivering plant uses
these specifications to process intercompany billing.

Delivering
Plant

Menu Path: IMG-> Sales & Distribution ->Billing->Inter Company Billing-> Assign
Organizational Units by Plant.

India SAP CoE, Slide 20

Configurations
Assign Plant to Sales Organization and Distribution Channel:
Sales Organization and Distribution Channel have to be assigned to the
Delivering Plant to enable sales processing.

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

Sales Organization and Distribution Channel.

India SAP CoE, Slide 21

Master Data – Customer
Create Internal Customer Number By Sales Organization:
A Customer Master record is to be created in the Sales Organization representing the
Delivering Plant.
The Internal Customer created represents that Sales Organization belonging to the ordering
Company Code.

Menu Path: Easy Access -> Logistics -> Sales & Distribution -> Master Data -> Customer ->
Create.
Code: XD01
India SAP CoE, Slide 22
Configurations
Define Internal Customer Number By Sales Organization:
The Internal Customer number has to be assigned to the Ordering Sales
Organization.

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

India SAP CoE, Slide 23

Master Data – Material
Extend the material in the Delivering Plant:
Enter the Delivering Plant in the material records, which will be relevant for sales
processes carried out by the Ordering Sales Organization.

Menu Path: Easy Access -> Logistics -> Sales & Distribution -> Master Data -> Products ->
Material -> Other Material -> Change.
Code: MM02
India SAP CoE, Slide 24
Configurations – Condition Type
Creating Inter Company Condition Types:
The delivering plant uses one of the following condition types to bill the sales organization.
PI01 Inter company: fixed amount per material unit
PI02 Inter company: percentage of the net invoice amount.
These condition types specify that the price charged by the delivering plant to the sales organization
is shown as a statistical value in the sales order and 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
India SAP CoE, Slide 25
Master Data – Condition Records
Creating Inter Company Condition Records:
PI01 Inter company: fixed amount per material unit
PI02 Inter company: percentage of the net invoice amount.

Menu Path: Easy Access Logistics  Sales and Distribution  Master Data  Conditions  Select using
Condition Type  Create
T-Code: VK11
India SAP CoE, Slide 26
Transaction Steps - Order
Create Order: The ordering Sales Organization prepares the sales order.
The system checks for the company codes and the permissible combinations of the
ordering sales organization and delivering plant, to carry out the Inter company Billing
process.

Menu Path: Easy Access -> Logistics -> Sales & Distribution -> Sales -> Order -> Create.
Code: VA01
India SAP CoE, Slide 27
 Transaction Steps - Order
The system automatically carries out pricing a per the pricing procedure assigned to the
sales organization.
The inter company charge (PI01/PI02) appears in the conditions screen of the sales
order as a statistical value -the charge has no effect on the final value of the sales order
for the customer.
The inter company charge is not printed out on documents for the customer.

Statistical
Condition value

Menu Path: Easy Access -> Logistics -> Sales & Distribution -> Sales -> Order -> Create.
Code: VA01
India SAP CoE, Slide 28
Transaction Steps - Delivery
The Delivery is created by the Ordering Company from the Shipping
Point which is assigned to the Delivering Plant.

Menu Path: Easy Access -> Logistics -> Sales & Distribution -> Shipping and Transportation ->
Outbound Delivery -> Create -> Single Document -> With ref to Sales Order.
Code: VL01N

India SAP CoE, Slide 29

Transaction Steps - Billing
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.

Menu Path: Easy Access -> Logistics -> Sales & Distribution -> Billing -> Billing document ->
Create.
Code: VF01
India SAP CoE, Slide 30
Transaction Steps - Billing
The Company associated with the Delivering Plant bills the Ordering Company
thru the means of Inter Company Billing document.
The Payer and the Company Code are derived from the Order created by the
Ordering Company Code.

Menu Path: Easy Access -> Logistics -> Sales & Distribution -> Billing -> Billing document ->
Create.
Code: VF01
India SAP CoE, Slide 31
Transaction Steps - Billing

India SAP CoE, Slide 32

Posting of the Inter Company Invoice
Manual posting of the invoice is done after good issue and system prints invoice
document with the help of output type RD00, which is then sent to the end customer.
Automatic posting of the inter company billing document is done via IDOC/EDI. The
system uses the output type RD04 contained in the output determination procedure
V40000, which is assigned to internal billing type.

India SAP CoE, Slide 33

Inter Company Sales
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 34
LetMe
IMG-> Sales & Distribution ->Billing->Inter Company Billing-

Define Order Types For Inter company Billing

Assign Organizational Units by Delivering Plant
Assign Plant to Sales Organization and Distribution Channel
XD01 Create Internal Customer Number By Sales Organization
Define Internal Customer Number By Sales Organization
MM02 Extend the material in the Delivering Plant
V/06 Create Inter Company Condition Types-PI01
VK11 Create Inter Company Condition Records
VA01 Create Order
VL01N Create Delivery
VF01 Create Standard Invoice
VF01 Create Inter Company Invoice

India SAP CoE, Slide 35

LetMe
Step Menu Path / T Code Expected Result
1. Menu Path : IMG-> Sales & „Change View “Sales Order for Inte-Comapny Billing”:
Distribution ->Billing->Inter Company Overview „ screen appears
Billing-> Define Order Types For Inter
company Billing

2. Assign Inter-Company document type The system accepts the input and Data is saved
“IV” against the required order
document type and Save
3. Menu Path: IMG-> Sales & Distribution „Change View “Organizational Units for Internal costings
->Billing->Inter Company Billing-> per Plant”: Overview „ screen appears
Assign Organizational Units by Plant.
4. Assign Sales Organization and The system accepts the inputs and Data is saved
Distribution Channel to the Delivering
Plant and Save
5. Enter Tcode: XD01 ”Customer Create “ : Initial Screen” appears

6. Enter the data relevant to represent System Displays the message “Customer XXXX saved”
the ordering sales organization.
Eg:Address, currency, Delivering
Plant, Payment Terms, etc and Save
7. Menu Path: IMG-> Sales & Distribution „Change View “View for Inter-Company Billing”: Overview‟
->Billing->Inter Company Billing-> screen appears.
Define Internal Customer Number By
Sales Organization

India SAP CoE, Slide 36

LetMe
Step Input Expected Result
8. Assign the Internal Customer created The data gets saved.
in the step: 6 to the ordering Sales
Organization and Save
9. Enter T code MM02 “Change Material (Initial screen)” appears
10. Enter the Delivering Plant in the System displays message : Material XYZ saved”
material records and Save.
11. Call Transaction VK11 and enter the „Create ZZCC Condition (Fast Entry )‟ screen appears and
required condition type and maintain the system accepts and saves the data entered.
data.
12. Call Transaction VA01 „Create ZZZZ Sales Order : Initial screen‟ appears
13. Enter Order Type, Sales „Create ZZZZ Order: Overview‟ screen appears
Organization, Distribution Channel &
Division
14. Enter Sold-to party, PO no, Material The system accepts the inputs and displays the Net Value of
no. , Quantity and the Delivering the order on the top.
Plant.
15. Navigate to GotoItemConditions „Create ZZZZ Order : Item Data‟ screen appears
Check condition types PI01/PI02. They do not affect the Net
price of the item.
16. Go back after save the order. System displays the message “ ZZZZ Order ZZXX has been
saved”
17. Call TCode: VL01N “Create Delivery: Initial Screen “appears.

India SAP CoE, Slide 37

LetMe
Step Input Expected Result
18. Enter the shipping point and Order no “Create Outbound Delivery with Order Reference” screen
created in the step 17 appears
19. Complete Picking and PGI activities System displays message “ Delivery No ZZYY Saved”
and save the Delivery.
20. Call Tcode: VF01 “Create Billing: Initial Screen” appears.
21. Enter the Delivery document created Note the invoice value is based on the sale price derived
in the Step:19 and Save. from the order document.
System displays the message “Invoice ZZFF is saved”
22. Again call Tcode: VF01 “Create Billing: Initial Screen” appears.

23. Enter the same Delivery document “Intercompany Billing : Overview screen appears”
created in the Step:19 and select the
billing type as “IV”
24. Check the Payer, Net Value of the Internal customer no assigned to the ordering sales
Invoice organization in the Step: 8 is displayed as the Payer.
Net Value of the Inter Company invoice is different from the
value of the invoice created in Step: 10.
25. Navigate to GotoItemConditions The net value of the item is based on values of Inter
Company conditions - PI01/PI02.
26. Save the invoice System displays the message “Invoice ZZII is saved”

India SAP CoE, Slide 38

Inter Company Sales
1 PrepareMe

2 TellMe

3 ShowMe

4 LetMe

5 HelpMe
India SAP CoE, Slide 39
Tips and Tricks
• 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 delivering company must be created as a vendor to enable

posting to the financial document of the ordering company.

India SAP CoE, Slide 40