Creating an Intercompany Billing Document

In addition to the gross sales price using condition type PR00, the inter-company price is determined in the billing document for the end customer. The system uses condition type PI01 for this. As in the sales order, PI01 is statistical in the invoice for the end customer. This means that it does not have any impact on the calculation of the net price that the end customer has to pay for the material.

In the billing document that is sent to the end customer, PI01 represents the costs used for profitability analysis in the selling company code (90FR France in our example).

When the invoice is created for the end customer, the outbound delivery is entered in the billing due list of the sales organization of the supplying company code (1010 Germany in our example). An internal invoice (i.e. an intercompany billing document) is created in the company code of the delivering plant (1010 Germany in our example) and sent to the selling company code (90FR France in our example). This invoice uses the intercompany price (PI01) for billing. Sales organization 1010 in our example creates the internal invoice which is posted in the delivering company code (1010 Germany).

You assign the sales organization responsible for intercompany billing to the delivering plant in Customizing. As in the case for the invoice for the end customer, billing occurs with reference to the outbound delivery. When selecting the documents to be billed, you need to set the Intercompany Billing flag in for example transaction code VF04 (Maintain Billing Due List) which is also available as a tile in the SAP Fiori launchpad for an end user.

The outbound delivery is first entered in the billing due list of the responsible sales organization of the delivering company code when the billing document for the end customer is created in the selling company code.

Billing type IV is used as the standard billing type for the internal cross-company code invoice in SAP S/4HANA. This billing type is proposed based on a setting in the document type of the standard sales order (OR).

The payer of the internal invoice is the company code of the sales organization that created the sales order for the end customer.

For this reason, you need to create a business partner master record (role FI Customer) in the delivering company code (1010 Germany in our example). You enter the relevant data for billing in this business partner master record. Finally, you assign this business partner to the sales organization of the selling company code (90FR France in our example). You do this in Customizing for intercompany billing (Cust.Inter-Co.Bill. field).

The company code in which the internal invoice is posted, is the company code to which the supplying plant is assigned.

In Customizing for intercompany billing, you assign the sales area in which the internal invoice is created to the supplying plant (SOrg, DistCh, and Div. fields). This sales area is known as the sales area for intercompany billing or as the IV sales area.

As stated above, the sales organization in the selling company code (i.e. the one for which the sales order for the end customer was entered), takes on the role of payer for the intercompany billing document.

A business partner master record must exist for this payer otherwise no internal invoice can be created.

The business partner master record must contain at least all the information that is required for a payer (address and reconciliation account, for example using role FI Customer). You also store the currency in which intercompany billing is carried out in this master record (role Customer). The company code data is stored for the delivering company code (1010 Germany in our example). Sales area data is entered for the intercompany billing sales area (sales organization IV, distribution channel IV, division IV).

Condition type PR00 in the internal invoice shows the material price when selling to an end customer. It is inactive in the inter-company invoice since we are now not invoicing an end customer.

Condition type IV01 represents the price of the internal billing document that the payer (i.e. the selling company code) needs to pay. It is determined with reference to condition type PI01, and shows the amount that the delivering company code (1010 Germany in our example) should receive from the paying company code (90FR France in our example). You can use condition type IV02 with a reference to condition type PI02 for calculating the intercompany price as a percent of the net invoice amount for the end customer.

Condition type IV01 represents the sales revenue for the delivering company code. For this company code, the costs are represented using condition type VPRS which is based on the valuation price of the material.

So in cross-company code sales processing, two debit-side (i.e. outgoing) invoices are created:

• An invoice for the customer (standard billing document)

• An internal invoice for the selling company code (intercompany billing document)

An internal price, which has been agreed upon by the delivering and selling company codes, is displayed in both the billing document for the end customer (as statical: the costs for the selling company code) and also in the internal invoice (not statistical: this is what the selling company code needs to pay to the delivering company code). In the invoice for the end customer, this price represents the costs for the profitability analysis for the selling company code.

In the invoice that the selling company code receives, this internal price represents the sales revenue for the profitability analysis of the delivering company code.

To fulfill this double function, the system works with two different calculation procedures.

Price determination in the cross-company code sales order and in the invoice for the end customer uses the standard pricing procedure (RVAA01). Price determination in the internal invoice uses a separate pricing procedure for intercompany billing (in our training system this procedure has been customized and is called IC_680 (Intercompany Billing S4680). You can of course configure your own procedure that is tailored to your specific requirements in your own system.

To summarize: the fact that condition types PI01 and IV01 have the same condition values, results from the reference to condition type PI01 which is stored in the definition of condition type IV01. In this way, condition type PI01 represents the costs for the selling company code and condition type IV01 represents the sales revenue for the delivering company code. The use of two different condition types is thus necessary for the forwarding to profitability analysis to be done correctly (component CO-PA).

The pricing procedure for the internal invoice is determined based on the document pricing procedure stored in the billing type (IV), the sales area for intercompany billing (assigned to the delivering plant), and the customer pricing procedure stored in the business partner master record of the determined payer.