Controlling Intercompany Projects

Objectives

After completing this lesson, you will be able to:

  • Discuss how Project Control helps control intercompany projects

How to control an Intercompany Project

Introduction: Controlling Intercompany projects

A company has an affiliate company that delivers a service to the ordering company during a project. The affiliate company posts expenses and records time on the project. These expenses are transformed into debit memo requests.

An intercompany invoice with reference to the debit memo request is created by the delivering company. The intercompany invoice is also posted automatically to the accounts payables of the ordering company.

The ordering company is DE.

The delivering company is US.

Task 1: Create a project

In this first task, Shubham, our Project Financial Controller, creates an Overhead Project. This project type is used to support the planning and monitoring of project-related costs, in this case an intercompany project.

Task 2-3: Add subordinate WBS elements

Shubbham performs a project planning with subordinate WBS elements for project planning and project execution.

Task 4: Release the project hierarchy

Shubham releases the project and adds actual dates to the WBS elements.

Task 5: Perform a direct activity allocation

In this task Shubham does a direct activity allocation to the intercompany project.

Task 6: Create a supplier invoice for intercompany expenses

When Shubham posted the direct activity allocation, Claire, our accounts payable accountant, posts an intercompany expense to the right WBS element.

Task 7: Create an intercompany Sales Order

In this task, Kate, the internal sales representative creates an intercompany sales order. The ordering company is located in Germany, the delivering company is located in the US.

Pay special attention to the sales order header and the selecting delivery information.

Task 8: Create an intercompany Billing Request

Katherine,  the internal Sales Representative for Professional services, creates an intercompany Billing Request.

The result is a debit memo request for intercompany billing for the time recordings and expenses for the intercompany services.

Lionel the Billing Clerk, creates the billing document. 

Task 9: Display a Sales Order

Finally Kate, our internal sales representative checks again the sales order. She pays special attention to the document flow.

Now you should have an impression of "How to maintain an Intercompany Project".

Control an Intercompany Project (4AU)

A company has an affiliate company that delivers a service to the ordering company during a project. The affiliate company posts expenses and records time on the project. These expenses are transformed into debit memo requests. An intercompany invoice with reference to the debit memo request is created by the delivering company. The intercompany invoice is also posted automatically to the accounts payables of the ordering company.

Task 1: Prerequisite: Assign Business Roles to your user

Steps

  1. Log on to the SAP S/4HANA Public Cloud training system with your user credentials and assign the relevant business roles to your user.

    Assign:

    Role IDDescription
    BR_PROJ_FIN_CONTROLLERProject Financial Controller
    BR_EMPLOYEEEmployee
    BR_AP_ACCOUNTANTAccounts Payable Accountant
    BR_OVERHEAD_ACCOUNTANTCost Accountant- Overhead
    BR_INTERNAL_SALES_REPInternal Sales Representative
    BR_INTERNAL_SALES_REP_PRSVInternal Sales Representative Professional Services
    BR_BILLING_CLERKBilling Clerk 
    1. Log on to the SAP S/4HANA Public Cloud training system with your user credentials.

    2. Navigate to the Maintain Business Users application.

    3. Scroll through the list of users to locate your business user.

    4. Select your business user.

    5. Choose Add and search for the required business roles.

    6. Add the roles to your user.

    7. Select the checkbox beside the business roles and apply them. Repeat it for every mentioned role.

    8. Choose OK to close the dialog box.

      Result

      You now see the business roles assigned.
    9. Choose Save.

    10. Refresh your screen.

Task 2: Presettings: Maintain Inter Company Cost Rates

In this activity, you define your own actual inter-company cost rates.

Note
To complete this exercise, you must have the Cost Accountant - Overhead (BR_OVERHEAD_ACCOUNTANT) business role assigned to your user.

Steps

  1. Open the Manage Cost Rates - Services app and enter the following:

    Selection data

    FieldValue
    Company Code:1710
    Valid on:Current Date
    Receiving Company:1010
    Cost Center:17101321

    Check existing data.

    As no data exist, choose Add and enter the following:

    Intercompany Rates

    FieldValue
    Receiving Company:1010
    Select the check box:ICO Rate
    Cost Center:17101321
    Activity Type:8
    From Year:Current fiscal year
    From Period:Current period
    Rate:100
    Currency:USD
    Per:1
    Activity Unit:H
    1. Perform the exercise.

    2. Inside pop-up select the button "Show more per Row" to enter necessary data.

    3. Save the data.

Task 3: Maintain settings for Timesheets

To enter WBS related timesheet information, system settings have to be extended:

Steps

  1. Open the app Manage Your solution with the entry Configure your solution.

    1. Open the app: Manage your Solution.

    2. Select the entry Configure Your solution.

  2. Select the following entries:

    Selection data

      
    Application Area:Human Resources
    Sub Application AreaTime Sheet
    1. Enter selection data.

    2. Open detail screen.

  3. Configure the first entry "Maintain Data Entry Profiles (S/4HANA)".

    Double click the entry S4H_INT.

    Set the check boxes for "Field Selection":

    • Receiver Cost Center
    • Activity Type
    • Receiver Order
    • Receiver WBS Element

    1. Double click entry S4H_INT.

    2. Set the necessary check boxes.

    3. Save the data and open home screen.

Task 4: Create a Project

In this activity, you create projects of the following type based on the business requirement, with the project definition and WBS element.

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Open the Project Control- Enterprise Projects app to create a new project.

    Select the Create button and enter the following:

    Header Information

    FieldValue
    Project Name:Overhead_1###
    Project ID:OVH1_###
    Project profile:Overhead Project
    Planned Start:Current date
    Planned Finish:Current date + 3 months

    Enter:

    General Information

    FieldValue
    Responsible Cost Center:10101501
    Profit Center:YB600
    Project Currency:Automatically filled based on the cost center
    Project Manager:998.….….….….. (your business partner number)
    Note

    To select the right project manager, select the F4 help and enter your user ID as a search parameter. Your business partner number is found.

    Genaral Information: Categorization

    FieldValue
    Priority:High
    Project Type:No entry at the moment

    Save your project using the Create button.

    1. Choose the button Create.

    2. In the Header Information section, enter the Project Name, Project ID and the Project profile together with the Planned Start and Finish date.

    3. On the General Information tab, enter Responsible Cost and Profit Center. The currency is filled in automatically.

    4. In the Responsibilities section, to enter the Project Manager, open the value help.

    5. In the Project Manager dialog window, enter your Train ### user and choose Go.

    6. Choose Create to save it.

  2. Once the project is created choose Edit button and enter the following data:

    General Information

    FieldValue
    Plant:1010
    Functional area:YB50

    Control

    FieldValue
    Costing sheet:1010PI
    Budget Availability ControlProfile:PS001
    Budget Availability Control is ActiveCheck-box set

    Check the following checkboxes:

    Blocked Functions

    FieldValue
    Time Recording:No Checkbox set
    Concur Expense Posting:No Checkbox set
    Activity Allocation:No Checkbox set
    Other Expense Posting:No Checkbox set
    Purchasing:No Checkbox set

    Choose Save.

    1. Enter the data, given inside exercise. Budget Availability Control profile can be found under "Control" data.

    2. Save your project.

Task 5: Create WBS Elements

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Once the project is created, from the header section, choose Related Apps. A pop-up screen appears select Project Planning.

    1. Select the button Related Apps and the pull down entry Project Planning.

  2. In the Project Structure view, switch to Edit mode, select your overhead project element created in the above step, and choose Create.

    1. If necessary switch to Edit mode.

    2. Highlight the line and select the "Create" button.

    3. A new line becomes visible.

  3. Enter the following data:

    FieldValue
    Work package name:Project planning ###
    Work Package ID:leave as suggested
    Planned Start:Current date
    Planned Finish:Current date + 3 months
    Note
    If necessary, move the screen splitter to the right hand side and enter the data. Detail screen is not necessary at this moment.
    1. Enter data given inside exercise.

  4. Add a second WBS element. Use again the Create button and enter the following:

    FieldValue
    Work package name:Project execution ###
    Work Package ID:leave as suggested
    Planned Start:Current date
    Planned Finish:Current date + 3 months

    Save it.

    1. Enter data given inside exercise.

    2. Save it.

  5. Once the project is extended, choose Related Apps with the entry Project Control- Enterprise Projects.

    1. Perform the exercise.

Task 6: Release the Project

In this activity, you release the project to enable the project execution.

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Release your project.

    1. Select the relevant drop down entry Processing Status and the entryRelease.

  2. Maintain current date as Actual Start date for every WBS element with the Project Planning app.

    1. Select the button Related Apps and the pull down entry Project Planning.

    2. Switch to Edit mode.

    3. Change the layout with the "Settings" button and add "Actual Start" date.

    4. For every line enter today's date as the Actual Start date.

    5. Finally save it.

Task 7: Direct Activity Allocation

In this activity, you confirm actual activities that occurred in relation to a WBS element.

Note
To complete this exercise, you must have the Project Financial Controller (BR_PROJ_FIN_CONTROLLER) business role assigned to your user.

Steps

  1. Open the app Manage Direct Activity Allocation- Old Version.

    In the Activity Allocations tab choose Create.

    Make the following entries:

    Header Information

    FieldValue
    Document Header Text:Your choice
    Journal Entry Date:Today
    Posting Date:Today

    In the Allocation Items area, make the following entries:

    Allocation items

    FieldValue
    Sender Cost Center:17101321
    Sender Activity Type:8
    Receiver WBS Element:Your overhead project ID(OVH1_###)
    Quantity:10
    Note
    If necessary: open the detail screen and enter quantity information. Use button: Show more per Row.
    1. In the Activity Allocations tab choose Create button.

    2. Enter data of Header information and Allocation Items table.

      The WBS element is not visible inside overview screen. Therefore choose the button: Show more per Row.

    3. Enter all relevant data.

  2. Choose Create to save it.

    Caution
    If warning messages become visible: "NO budget available", ignore It and create data.
    1. Use Create button to save data.

Task 8: Time recording

In this activity, employee enters the time recording for WBS Element.

Steps

  1.  Open the app: Manage My Timesheet. 

    Be default standard week and standard tasks are displayed.

    Therefore choose the button "Manage Tasks" and then the entry "Create Task".

    Enter the following:

    Accounting Objects

    FieldValue
    WBS Element:OVH1_### (Project Execution)
    Receiver Cost Center: 
    Internal Order: 
    Activity Type:8

    Save the data and jump one step back.

    1. Select the button "Manage Tasks". It's the last one inside header area.

    2. Select "Create Task" and enter data of exercise table "Accounting Objects".

    3. Sava data and jump one screen back.

  2. Select the Project Execution task and select one Day/Week you would like to post a working day.

    1. Select project execution task on the right hand side.

    2. Select a day you would like to post your work.

    3. Save and Submit your data.

Task 9: Post Intercompany Expense

In this activity, you post actual primary costs to WBS elements.

Note
To complete this exercise, you must have the Accounts Payable Accountant (BR_AP_ACCOUNTANT) business role assigned to your user.

Steps

  1. Open Create Supplier Invoice app.

    1. Execute the app or search for it.

  2. On the New Supplier Invoice screen, in the General Information area, make the following entries:

    General Information

    FieldValue
    Transaction:Invoice
    Company Code:1010
    Invoicing Date:Today
    Positing Date:Today
    Gross Invoice Amount:1000
    Invoicing Party:10300010

    Choose Show More.

    Enter:

    FieldValue
    Document Type:ER (Manual Expense Travel)
    Note
    The warning message for the missing "Reference" information disappears.
    1. Enter General Information given inside exercise.

      To enter the Document Type, select theSee More button.

      Enter Document Type ER-Manual Expense Travel.

  3. In the G/L Account Items area, choose Add to make the following entries:

    G/L Account Items

    FieldValue
    Debit/credit Indicator:Debit
    G/L Account:61003000
    Amount:1000

    Choose entry Show Details with:

    More Details

    FieldValue
    Tax Code:0I
    WBS Element:OVH1_###
    Personal Number:50.….….. (your personal number)
    Note

    Select the F4 help and enter you A08### user as a search parameter.

    1. Enter G/L Account Items data given inside exercise.

    2. Select the text box Show Details and enter data given inside exercise.

  4. Select "Check" button. The balance is set 0 EUR.

  5. Choose Post and save your data.

Task 10: Create Intercompany Sales Order

This process step shows you how to create an intercompany sales order.

Note
To complete this exercise, you must have the Internal Sales Representative (BR_INTERNAL_SALES_REP) business role assigned to your user.

Steps

  1. Open the app Create Sales Orders VA01.

    Inside initial screen enter the following data:

    Organizational Data:

    FieldValue
    Order Type:SO03

    Press Continue.

    1. Enter only the order type SO03 and continue.

  2. Enter the following header data:

    Header Data:

    FieldValue
    Sold to Party:10401010
    Cust. Reference:Intercompany
    Cust. Ref. Date:Current Date

    A pop-up becomes visible.

    Select Sales Org: 1710.

    Note
    You run an intercompany process. Therefore 1710 is the right selection.
    1. Enter header data.

    2. Select sales organization 1710 inside pop-up "Sales area for customer".

  3. Enter the following Item information:

    FieldValue
    Item:0010
    Material:P002
    Amount:1000

    Save your sales order.

    Make a note for your sales order number.______________

    1. Enter the item number, material andamount.

      Note
      All other fields are automatically filled.
    2. Save your sales order and write down sales order number.

Task 11: Generate Intercompany Billing Request

his process step shows you how to generate the intercompany billing request. This happens via scheduling of a background job .Result is a debit memo request for intercompany billing for the time recordings and expenses for the intercompany services.

Note
To complete this exercise, you must have the Internal Sales Representative - Professio­nal Services (BR_INTERNAL_SALES_REP_PRSV) business role assigned to your user.

Steps

  1. Execute the app Generate Intercompany Billing Request.

    Inside the initial screen you select the button Create to enter the basic parameters for a new job.

    1. Open the app Schedule MRP Runs.

    2. Select the entry Create.

  2. Enter now the following:

    1. Template Selection

    Template Selection

    FieldValue
    Job Template:Resource Related Billing between Company Codes
    Job Name:Resource Related Billing Between Company Codes

    Click on Step 2.

    2. Scheduling Options

    Scheduling Options

    FieldValue
    Start Immediately:Set check box
    Start:grayed out

    Click on Step 3.

    3. Parameters

    Parameters

    FieldValue
     Intercompany Sales Document: your sales order number
    Source:Current w/Curr.Date: Radio button
    Save sales document:Radio button
    Note
    Select your sales order number with the F4 help. Then search for material P002.

    Select the button Schedule inside footer area.

    1. Enter the values of table Template Selection and click on Step 2.

    2. Enter the values of table Scheduling Options and click on Step 3.

    3. Enter the sales order number not directly.

  3. Application Jobs window becomes visible.

    To refresh the screen click on Go. Stay tuned until the status is set to Finished.

    1. MRP run is executed.

    2. Stay tuned until status is set to finished.

  4. Your MRP run creates automatically a "Debit Memo Request".

    To find out the right number please execute the following app: Manage Debit Memo Request.

    Your number should be the last one. Make a note.

    1. Execute the app: Manage Debit Memo Request.

    2. For a faster result: enter "Sold to Party: 10401010".

    3. Write down your Debit Memo Request number:_________________

Task 12: Create an intercompany Invoice

This process step shows you how to create an intercompany invoice for services which have been executed in the delivering company of the intercompany process. A journal entry is created in finance.

Note
To complete this exercise, you must have the Billing Clerk (BR_BILLING_CLERK) business role assigned to your user.

Steps

  1. Open the app Create Billing Documents.

    Choose button Billing Settings and set the following:

    • Set billing date and type before billing - OFF
    • Automatically post billing documents- OFF

    Your Debit Demo Request Number is found.

    1. Execute the app Create Billing Documents.

    2. Select the button Billing Settings and switch off the entries you find inside exercise.

  2.  Select the SD document and choose Create Billing Documents

    Check that taxes on the intercompany invoice are zero.

    Select Save bottom to trigger the formal intercompany invoice.

    1. Choose the button Create Billing Documents.

    2. Your intercompany invoice screen becomes visible. Check your data.

    3. Save your invoice.

  3. On the Billing Document screen, choose the Previewbutton to generate and print a PDF.

    1. Select the header button "Preview" and check the PDF.

  4. Choose Post Billing Document to create an accounting document.

    System states an information. Pay special attention to the "Process Flow" area.

    Finally open Home screen.

    1. Select the text box Post Billing Document which can be found in upper right corner.

    2. Open Home screen.

Intercompany Project Control

A company has an affiliate company that delivers a service to the ordering company during a project. The affiliate company posts expenses and records time on the project. These expenses are transformed into debit memo requests. An intercompany invoice with reference to the debit memo request is created by the delivering company. The intercompany invoice is also posted automatically to the accounts payables of the ordering company.

Watch the following video to understand how a possible process could look like. You learn which users and which roles are necessary to control intercompany projects.

Applicable Process Steps

To sum up the steps you saw in that video, here are the general process steps listed:

  • Project Financial Controller: Creates and releases a project

  • Internal Sales Representative: Creates intercompany sales order

  • Internal Sales Representative: Creates debit memo request for intercompany billing

  • Billing clerk: Creates intercompany invoice

  • Accounts payable accountant: Posts intercompany expenses

  • Cost Accountant Overhead: Allocates intercompany activity

Benefits

The benefits of the controlling intercompany projects are:

  • Automate the intercompany process in projects

  • Perform margin analysis

Note

This process flow is covered in scope Item 4AU - Project Control Intercompany.

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