1) The document discusses tips for coping with intercompany invoicing in Oracle EBS, including reconciliation, scheduling concurrent programs daily, adding descriptions, monitoring for errors, and controlling the valuation cutoff date. 2) It recommends creating a Discoverer worksheet to reconcile intercompany payables and receivables invoices. 3) Scheduling the four required concurrent programs daily helps detect errors quicker than running them monthly.

1. Oracle E-Business Suite:Coping with EBS Intercompany InvoicingEric Guethereguether@gmail.com

2. ObjectivesExplore intercompany (I/C) invoicing topics and issues not addressed in the Inventory User’s GuideLearn tips for coping with I/C invoicing in areas of:ReconciliationSchedulingG/L DatingError DetectionValuation2

3. Presentation ScopeIn ScopeShipments to fulfill customer sales orders Loosely referred to as “internal drop shipments”Simple pricing of I/C invoices from price listsEBS 11i functionality; applicable to Release 12Out of ScopeStep-by-step configurationInternal Sales Order / Internal Req-specific scenariosGlobal Purchase Agreement-specific scenarios“External” Drop Shipments (EBS SO spawns a PO)Advanced Pricing to value intercompany invoices3

4. Intercompany Invoicing OverviewStandard functionality in EBS 11i and R12Produces intercompany invoices for “internal” drop shipments when SOs are sourced across operating units (OUs):SO entered in a selling (OU)Shipment for SO is sourced from an org linked to a different OU, the shipping OUI/C Receivables (A/R) invoice in the shipping OUBill an internal customer, the selling OUI/C Payables (A/P) invoice in the selling OUPay an internal supplier, the shipping OU4

5. Classic Intercompany Invoicing FlowNote: Child not created until Parent record has been Transacted and Costed5

6. Typical Accounting for Classic I/C Invoicing6

7. Intercompany Relation7

8. ReconciliationHow do you ensure the completeness of all intercompany Payables invoices?Each I/C Receivable should have matching I/C PayableNo reconciliation report provided in Oracle EBS8

9. Reconciliation: Discoverer Worksheet9

10. Tip # 1: Discoverer Worksheet Create a custom Discoverer worksheet for every existing intercompany relationUse a custom SQL script to query I/C A/R invoices and any matching I/C A/P invoicesSample script provided in white paper on My Oracle Support site or upon e-mail request10

11. Intercompany A/P Invoice NumberingPrior to release 11.5.9, the I/C A/P invoice # equaled the I/C A/R invoice #Starting in 11.5.9, the A/P invoice # has a suffix (dash + shipping OU’s org ID) to ensure uniquenessExample: I/C A/P invoice # 47391-32 created to match I/C A/R invoice # 47391The SQL script provided in the white paper can accommodate matching to A/P invoice #s with or without the suffix11

12. I/C Invoicing Concurrent ProgramsFour separate concurrent programs must run to produce I/C A/R and A/P invoices:“Create Intercompany AR Invoices” in the INV module“Autoinvoice Master Program” for Intercompany source in the Receivables module“Create Intercompany AP Invoices” in the INV module“Expense Report Import” for Intercompany source in the Payables moduleThe 2nd, 3rd & 4th programs are dependent on predecessor12

13. Tip # 2: Daily SchedulingDon’t wait until month-end to generate a whole month’s worth of intercompany invoices!Schedule the four concurrent programs to run dailyReason: Errors can be detected & resolved more quickly through frequent scheduling13

14. Example of Daily Scheduling List14

15. Tip # 3: Meaningful DescriptionUse meaningful Header Description values when submitting the “Create Intercompany AR Invoices” or “Create Intercompany AP Invoices” programsReason: Parameter value becomes the invoice description15

16. Header Description Parameter 16

17. Description on Imported Invoice17

18. Error DetectionRequest status does not necessarily indicate whether errors occurred with some recordsFor 3 of the 4 concurrent programs (except “Create Intercompany AR Invoices”), the request status will be Normal even if the output or log file indicates some records were rejectedDo not just monitor at month-end!Reason: Daily scheduling won’t minimize issues at month-end if monitoring is only done at month-endPeople should be responsible for periodic monitoring errors with these scheduled requests18

19. Typical Detection Methods“Create Intercompany AR Invoices”Warning request status indicates transaction errorsUser must review the log file to identify error messages“Autoinvoice Master Program”Request status will be Normal even if records error outReview the output file of spawned Autoinvoice Import Program request for rejected record countError records can be monitored by querying the RA_INTERFACE_ERRORS_ALL tableI/C autoinvoice errors are not so common19

20. Log File from Warning Request20

21. Typical Detection Methods [continued]“Create Intercompany AP Invoices”Request status will be Normal even if records error outUser must review the log file to identify error messagesContains separate counts for records selected, processed, and rejected“Expense Report Import”Request status will be Normal even if records error outUser must review the output file to detect errors in the Exceptions Report section21

22. Tip # 4: Alert for Warning RequestsCreate an Oracle Alert to detect “Create Intercompany AR Invoices” requests that ended with a Warning statusSample alert script provided in white paper available upon e-mail requestCommon reason for Warning: Missing transfer priceFor example, log file will indicate “APP-INV-05706: Warning: Cannot retrieve transfer price for the item LASER123. Warning: Cannot create invoice line”22

23. Example of Oracle Alert E-Mail23

24. Scheduling Issue: Unique BatchIssue in EBS prior to release 11.5.8Payables invoice batch names must be unique within an operating unit if batch control is enabledBug 2366334: If an “Expense Report Import” request is scheduled to run repeatedly, each submission will have the same batch name parameter value (won’t be unique)A/P batch from 1st request run will be createdSubsequent runs will fail, because they will attempt to create the same batch nameResolved in release 11.5.8 and patch 3114322; request concatenates the batch_id to batch name24

25. G/L Dating Issue: Payables OptionsSetting GL Date Basis to System Date is appropriate for trade payables but not for intercompany payablesWould cause some I/C A/P invoices to have G/L dates different from their corresponding I/C A/R invoicesCould push an I/C A/P invoice’s G/L date into another G/L periodIf GL Date Basis for I/C A/P invoices were set to Invoice Date, then their G/L Date would always match the G/L Date of their I/C A/R InvoiceI/C A/P Invoice’s G/L Date =I/C A/P Invoice’s Invoice Date =I/C A/R Invoice’s Invoice Date =I/C A/R Invoice’s G/L Date25

26. G/L Date Basis Option in Selling OU26

27. No Solution Offered in EBSNeither EBS 11i or R12 offer a way to vary the GL Date Basis of A/P invoices based on source type [Intercompany vs. non-Intercompany]Issue raised in numerous Oracle Support bugsBug 2359320 – INCIAP INTERCOMPANY INVOICING PICKING UP WRONG DATEBug 3104204 – AP INTERCOMPANY INVOICES HAVE A DIFFERENT GL DATE FROM AR INVOICES27

28. Unofficial Tip: Custom TriggersKeep the GL Date Basis set to System Date in the selling OU if desired for trade payablesAdd custom triggers to two Payables tables to override the A/P invoice’s G/L date [only for intercompany invoices!], inserting its invoice date value:AP_INVOICES_ALLAP_INVOICE_DISTRIBUTIONS_ALLCustom triggers guarantee that the G/L dates of I/C A/P and A/R invoices matchAdd triggers at your own risk!28

29. Example of Custom Trigger for One Table29

30. PaymentsOracle EBS 11i offers no automation:For corporate netting of I/C A/R and A/P invoicesTo apply cash collections to I/C receivables when a payment is recorded against I/C A/P invoicesOne intercompany cash collection could be for hundreds or thousands of I/C A/R invoices depending on shipping volumes30

31. ValuationTwo methods for valuing intercompany invoices:Static price list in Order Mgmt. moduleAdvanced Pricing engine rules for more complexityStatic price list for an internal customer is defined within the customer’s bill-to location31

32. Price List Chosen for Customer Site32

33. Transfer Price List33

34. Basis for Selecting a Transfer PriceThe “Create Intercompany AR Invoices” request selects a transfer price based on which price is effective as of the system dateRequest run system date = I/C A/R inv. creation dateThe G/L date of the I/C invoice has no bearing on the transfer price selection34

35. Example of Transfer Price SelectionI/C A/R invoice for item LASER123G/L date: 01-APR-2007Invoice date: 01-APR-2007If this I/C A/R invoice were created on:01-APR-2007, it would be valued at the $1,320 price05-APR-2007, it would be valued at the $1,100 priceIssue: Some companies want the invoice to be priced at the new price ($1,100) based on the G/L date regardless of the invoice creation date35

36. Potential Valuation IssueDilemma: How do you ensure that intercompany invoices with G/L date in:March 2007 are valued at the old transfer prices?April 2007 are be valued at the new prices?36

37. Tip # 5: Control the Valuation CutoffUse the Cost Cutoff Date (CCD) functionality in EBS Inventory to indirectly control the I/C invoice valuation cutoffIntroduced in EBS release 11.5.7Controlled by one simple Inventory parameter dateDefers the costing of any MTL transactions in the org with G/L date on or after the cost cutoff date value37

38. Inventory Org Parameter: Cost Cutoff Date 38

39. CCD Impact on I/C Invoice ValuationSet CCD to 01-APR-2007 to defer the costing of April-dated shipments until perhaps April 6thI/C invoices for April-dated shipments will not be created & valued so long as their ‘Sales Order Issue’ shipment transactions remain uncostedThe cost cutoff date indirectly defers I/C A/R invoice creation through the Parent-Child dependencyDeferring the I/C invoice creation also postpones the transfer price selection39

40. Cost Cutoff Date Impact on a SO Issue40

41. Additional ResourcesI/C Invoicing for Internal Reqs / Internal Orders: Han Kolbe presentation [2006 NorCal OAUG Seminar on Intercompany Transactions]COGS Account Generator for I/C Payables: John Peters presentation [2006 NorCal OAUG Seminar on Intercompany Transactions]“Overview of Intercompany Invoicing” Oracle white paper by Sharma Manda[Oracle Support doc # 336129.1]“Internal Drop-Shipping: Multi-Org Inter-company Invoicing in 11.5.10” by David S. McCurry [OAUG COL’06 white paper presentation]“Multiple Organizations in Oracle Applications” Oracle white paper, Appendix B – “Using The Account Generator to Generate the Intercompany COGS Account” [Oracle Support doc # 226456.1]“11i Cost Cutoff Date to Retroactively Cost Transactions” by Eric Guether [NorCal OAUG 2007 Training Day presentation and Oracle Support doc # 432515.1 ]41