Introduction
Starting with SAP S/4HANA Cloud Private Edition 2023 FPS0, an intercompany service process with fixed price billing involves a customer-facing service order and a corresponding intercompany service order within a different company code. The process ensures that costs and revenues are properly tracked and allocated across legal entities when one company provides a service to another company.
Starting with SAP S/4HANA Cloud Private Edition 2023 FPS02, you can use a service hierarchy with collective accounting, in which you can specify an item as the main item in the hierarchy. Only this main item, and not its subitems, creates an account assignment object. The subitems inherit the account assignment object and the relevant attributes, such as the profit center and the service contract assignment from the main item. With this feature, all costs and revenue triggered by the subitems are only posted to the account assignment object of the main item. A service hierarchy with collective accounting makes it possible to collect costs and revenue under one account assignment object.
Up until release SAP S/4HANA Cloud Private Edition 2025, it was not supported to use the intercompany process together with fixed-price billing in the service hierarchy with collective accounting.
Since release SAP S/4HANA Cloud Private Edition 2025, this is supported at the main item or subitem level of a service hierarchy.
Variations of the Use Case
There are two variations of the use case for service hierarchy with collective accounting using an intercompany process with a fixed price item. You can use both variations in one service hierarchy.
Intercompany item as a main item:
- All revenue from the follow-up intercompany order item and all additional items added in the intercompany order, which refer to the original item via the intercompany reference item number, are posted as costs directly to the main item.
- In this scenario, the intercompany invoice is added to the transaction history of the service hierarchy main item.
Intercompany item as a sub-item:
- All revenue from the follow-up intercompany order item and all additional items added in the intercompany order, which refer to the original item via the intercompany reference item number, are also posted as costs to the main item, because the sub-item inherits the account assignment object of the main item.
- In this scenario, the intercompany invoice is added to the transaction history of the service hierarchy sub-item.
As usual, any target item type in the intercompany order can be configured depending on the item category group maintained on sales area level. This can be a standard service item, a service hierarchy with collective accounting, or even another intercompany item if the second company dispatches the service again.
An Example
The above screenshot shows a service hierarchy with collective accounting that consists of an intercompany main item and an intercompany sub-item. It is possible to distribute intercompany items in one service hierarchy to different companies. Multiple items distributed to the same target company from a customer-facing service order are consolidated into one intercompany service order.
As expected, the Intercompany Details assignment block is visible for the intercompany main item or sub-item in a service hierarchy with collective accounting.
In the Transaction History assignment block, the intercompany invoice(s) are displayed for all items in the intercompany service order that have been billed and for which revenue has been posted as cost (Accounts Payable) to the intercompany item of the customer-facing service order.
By using the link to the intercompany order in the Transaction History section, the invoice can be accessed directly.
The financial document displays the posting to the main item in the hierarchy of the customer-facing company.
Customizing
For the main item level, item category SRHI has been introduced. This item category has been specified as a main item and intercompany relevant.
Summary
- Since release SAP S/4HANA Cloud Private Edition 2025, it is supported to use the intercompany process together with fixed-price billing in a service hierarchy with collective accounting.
- There are two variations of the use case for service hierarchy with collective accounting using an intercompany process with a fixed price item: the intercompany item as a main item, or the intercompany item as a sub-item.
- In terms of the configuration for this functionality: For the main item level, item category SRHI has been introduced. This item category has been specified as a main item and intercompany relevant.