Wednesday, November 28, 2007

R12 Intercompany Accounts Set Up

In R12 the Intercompany Accounts setup is broken out from GL and included in the Advanced Global Intercompany System (AGIS) product (Don't worry you don't need any additional license for this product). There is a separate set up screen for Intercompany and Intracompany Accounts. The same set up pages are available through the Accounting Set Up Manager as well as AGIS so you can pick your navigation path.

The Intracompany accounts are defined for pairs of Balancing Segment Values (BSV) within the same ledger; this set up is similar to the 11i approach and we upgrade 11i Intercompany accounts to Intracompany accounts here. You don't need to uptake the Legal Entity Configurator product(new in R12) to define these.

In order to enter Intercompany Accounts you need use Legal Entity Configurator to define your Legal Entities and map them to ledgers and/or BSV. You then define accounts to use when certain pairs of Legal Entities trade.

In R12 you can now define a separate payable and receivable account for each Inter/Intracompany trading relationship. In 11i you would just define the due to/due from account and that account was used for both the payables and receivables I had with the specified trading partner.

These will be used for any AGIS transactions you create and also by the automatic intercompany balancing in GL and SLA. Doing the Intercompany balancing at the transaction level in SLA is a big enhancement for R12 and one I will talk about and give examples of in another post.

15 comments:

Lukis55 said...

Hi!
Your guide is fine, but don't you think you could do it more complete if you add print screens of the application?? It's just a suggestion

Greetings!

David Haimes said...

Lukis55

I appreciate your feedback. In some articles where I go into more detailed set up descriptions I have included screen shots for reference. Please surf around the blog for more of these articles

However the intent of this blog is not to replace the detailed steps available in the User guides but to provide context of what set up you might need in what situation.

Fixed Assests Intercompany in R12 « David Haimes Oracle Intercompany Financials Blog said...

[...] So in R12 FA uses the AGIS Intercompany balancing feature, which is called from SLA and so we’ll balance all transactions that are out of balance right there in the subledger without having to let some of it hit GL and with all the flexible rules available in the new Intercompany Accounts Set Up. [...]

Azlina said...

Currently I'm on searching for solution to propose for the management having a system in handling their intercompany trx, however they need to know how much averagely the costs will be incurred.

David Haimes said...

Azlina,

It is impossible for me to give an estimate of cost to implement functionality without detailed information.

Maybe some other readers have data that they might share on costs of similar projects they have undertaken, but User groups and such like are a better place for that I suspect.

I think you need to do an in depth study based on your organizations specific needs.

Ganesh said...

David,
I must say your site is very informative and great!!
A screen shot is an easy way to explain what you inteand to say. Your argument that the blog is not to replace the UG :) makes sense but then why the blog itself on a specific topic? guess it is to make a simple approach more understandable to ppl who are new to R12. Thus would make an request to add a screen shots if not too details to field level but an over and screen shot with the amout of knowledge you have would be of good help to all ...

Kirk said...

David, is it possible to implement an intercompany solution withouth having to add a new segment to our accounting string? Everything I have read, says we need an intercompany balancing segment but we don't have any extra segment available in our string. What would you suggest for a solution?

Thanks

David Haimes said...

You do not need an Intercompany segment. AGIS and Intercompany balancing will work fine without an Intercompany segment, so no need to change your chart of accounts to use the functionality.

For a new chart of a accounts I would recommend an Intercompany segment as it will make reporting easier, but it is optional and Oracle Intercompany features do NOT require it.

Check out this post for a discussion on it

http://davidhaimes.wordpress.com/2007/11/20/intercompany-segments-and-vision-demo-data/

Lance Laughlin said...

I have been researching the multiple balancing segments and everything that I am reading indicates that you can use multiple balancing segments under a single legal entity however it seems like you can only have one intercompany balancing account for AP and AR for each legal entity. Can you verify whether this is correct or if I am missing something. I see references in the AGIS user guide that indicates “However, when you select the value All Other, the Balancing API determines and substitutes the correct balancing and intercompany segment values at the time of balancing. For example, if you enter an account code combination 01.4000.02, it actually means xx.4000.yy, where xx is the balancing segment value of the debit balancing segment value on the journal and yy is the balancing segment value of the credit balancing segment value on the journal. The Balancing API substitutes these values during balancing.”
However this is described under the section Balancing Details Tab and not where it explains how and where to setup AP and AR intercompany balancing accounts so I am unsure whether the same rules apply for these accounts or not.

David Haimes said...

Lance,

You have done your research well. I've added answers your questions below, I hope this clarifies things for you.

Q: everything that I am reading indicates that you can use multiple balancing segments under a single legal entity.
A: Yes, this is correct.

Q: it seems like you can only have one intercompany balancing account for AP and AR for each legal entity.
A: No, you can have different ones for each balancing segment value

Q: I am unsure whether the same rules apply for these accounts or not.
A: Yes same rules apply for Intercompany Accounts too.

Lance Laughlin said...

Ok. Let me see if I have this straight. If I have multiple BSV's under a single LE then my AP & AR accounts are defined under the Intracompany Balancing rules whereas if I have each BSV under a separate LE then they are defined under the Intercompany Accounts.
Our 11i setup was to have one LE with multiple BSV's however each BSV is actually a separate LE. Is the recommendation for R12 to setup each LE separately, assign them their appropriate BSV's and account under the Intercompany rules?
If so what is the downfall (if any) of keeping the 11i setup and and accounting for our Intercompany as if it were Intra company?

David Haimes said...

You can continue to use the Intracompany rules as if they are Intercompany. The uptake of Legal Entity is not mandatory.

konya sohbet said...

hey thanks very good

Udit said...

Hi David,

We are Implementing Intercomapny / Intracompany on 12.0.6.

The Business Stucture is like
We have One Ledger.Under this we have three LE's.Now Under Each LE wehave OU's as child because we need both LE and OU's as Balancing Segment.Now we have transactions between LE"s and OU's(Within same LE and as well as across LE's.How to setup this scenario.(Intercompany / Intracompany).
Do we need to have seperate ledgers for respective LE's?

Sridevi K said...

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