Controlling Intercompany Projects

Objective

After completing this lesson, you will be able to use Project Control for Intercompany Projects.

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.

The following video shows how users and roles work together to complete these tasks.

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.

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

The following video demonstrates this task.

Task 2-3: Add Subordinate WBS Elements

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

The following video demonstrates these tasks.

Task 4: Release the Project Hierarchy

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

The following video demonstrates this task.

Task 5: Allocate Direct Activities

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

The following video demonstrates this task.

Task 6: Create a Supplier Invoice for Intercompany Expenses

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

The following video demonstrates this task.

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.

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

The following video demonstrates this task.

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. 

The following video demonstrates this task.

Task 9: Display a Sales Order

Internal sales representative Kate finally checks again the sales order. She pays special attention to the document flow.

The following video demonstrates this task.

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

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