In an increasing international market place, Intercompany Transactions, and particularly Multi-Currency Intercompany Transactions, are being used more and more. It is to J.D. Edwards’ credit that, once the setup is completed correctly, the process is stable and consistent. Although the setup is complex, it is quite understandable once you know how all of the parts fit together.

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For our working example, we have an international corporation with several companies in the United States and several in Canada set up in EnterpriseOne (E1). They want all of the US companies to be able to create Intercompany Transactions among themselves but not with the Canadian companies and vice versa. They did not want to have a specified Hub Company, a single Company through which all Intercompany Transactions are written and which limits the directional flow of the Intercompany Transactions. They wanted to allow any of the Companies within the group to trade with any other “Member Company”, as Oracle refers to them.

There are three main applications that are used to set up Intercompany Transactions in E1. Our example has been set up in Release 9.1 with Tools Release 9.1.5.

  • Company Constants
  • Financial Automatic Accounting Instructions (AAI)
  • Configuration Master

However, the very first step is to define how the business process is to work.

Are Intercompany Transactions going to be posted in detail?
If transactions are posted in detail, the number of transactions increases in your General Ledger Detail table (F0911). However, summarized transactions are much more difficult to trouble shoot if a transaction “goes astray”.

Is there to be Hub Company?
In other words, all transactions must go through the Hub Company. If there is no defined Hub Company, any of the Member Companies can initiate an Intercompany Transaction with any other Member Company.

Are there to be restrictions on which companies can trade with one another?
In our example, there are two configured groups. One group has Canadian dollars as their base currency in all of the companies in the group. The other group has United States dollars as their base currency. It was determined that there was not to be trading between the two groups and that there was no defined Hub Company in either group.

 

Company Constants

There are two fields in the Company Constants applicable that pertain to the Intercompany Transactions setup:

  • Intercompany Settlements
  • Allow Multi-Currency Intercompany Transactions Check Box

The figure below is the Company Constants screen with the two fields enclosed in the red rectangle and the Help text for the Intercompany Settlements field superimposed on the screen.

INTERCOMPANY SETTLEMENTS

There is a lot of power in the value entered in this one little field. We will discuss here not only how they impact the system but also how these other settings impact the setup of the other two applications.

OPTION 1. This is used for non-configured Intercompany with a Hub.

  • AAI – requires that there be an ICCC entry in the AAI for each Company in the Company Master. The ICH entry for the designated Hub Company is entered for Company 00000 with the Business Unit defining the designated Hub Company.
  • Configuration Master – no entry is necessary

Click to view example of AAI Setup for Option 1:


OPTION 2. This is used for the Detail Method of Intercompany without a Hub. This can be used for either Configured or Non-Configured Intercompany Transactions. However, if this is used with the Configuration Master, it will not restrict the Intercompany Transactions to the group in which they are defined.

  • AAI – requires that there be an ICCC entry in the AAI for each Company in the Company Master. No ICH entry is needed.
  • Configuration Master – optional setup

Click to view example of AAI Setup for Option 2:

 

 

OPTION 3. This is used for Configured Intercompany Transactions with or without a Hub. So, two possible setups are defined below.

Configured with a Hub

  • AAI – requires that there be an ICCC entry in the AAI for each Company in the Company Master. No ICH entry is required. The Hub is defined within the group in the Configuration Master.
  • Configuration Master – Each of the groups has a designated Hub Company. See below.

Groups are first defined in User Defined Code 09/HB:

Then they are set up in P09190, the Configuration Master:

Then the Companies are added to the groups. All Companies in the Company Master must be defined in P09190 if you are want to use Configuration regardless of whether you define a Hub or not:

 

Configured without a Hub

  • AAI – requires that there be an ICCC entry in the AAI for each Company in the Company Master. No ICH entry is required. See Option Two above
  • Configuration Master – All of the Companies in each of the groups are Members. See below.

Groups are first defined in User Defined Code 09/HB:

Then they are set up in P09190, the Configuration Master:

Then the Companies are added to the groups. All Companies in the Company Master must be defined in P09190 if you are want to use Configuration regardless of whether you define a Hub or not.

 

ACCOUNTS PAYABLE CONSTANTS

The one required setting in the Accounts Payable Constants is the value designating the Offset Mode for Accounts Payable Batches. Offset Mode must be set to either a ‘Y’ or an ‘S’. Offsets cannot be made by Batch if using Intercompany.

ACCOUNTS RECEIVABLE CONSTANTS

The one required setting in the Accounts Receivable Constants is the value designating the Offset Mode for Accounts Receivable Batches. Offset Mode must be set to either a ‘Y’ or an ‘S’. Offsets cannot be made by Batch if using Intercompany.

 

Additional Resources:

Oracle Implementation Guide

Oracle White Papers:
E1: 09: Frequently Asked Questions on the Intercompany Settlement Methods (P0000) (Doc ID 664765.1)
E1: 09: Overview of Intercompany Settlement Methods (P0000) (Doc ID 1416193.1)

 

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