Intercompany Setup
This chapter covers the following topics:
• Introduction
• Setting up AGIS
Advanced Global Intercompany System (AGIS) enables you to create, settle and
reconcile intercompany transactions. Intercompany transactions are transactions that
occur between two related legal entities in an enterprise or between groups in the same
legal entity.
1) Transactions that occur between two legal entities are called intercompany
transactions.
2)Transactions that occur between two groups within one legal entity are
called intracompany transactions.
The balances of the intercompany transactions must be eliminated or adjusted when
preparing the consolidated financial statement, or it might result in overstated financial
results, which in turn might lead to legal repercussions against the enterprise.
Intercompany transactions can be identified and eliminated by the use of specific
accounts to book these transactions. Defining these accounts allows you to book
transactions that are identified as intercompany transactions in the specific accounts.
These accounts must be defined as a part of the General Ledger setup process.
Before you start working on AGIS, you must setup the following:
• Complete the Accounting Setup Manager to set up General Ledger and legal
entities
• Set up AGIS
Intercompany Home Page
Use the Intercompany Home and Transaction pages to receive, respond to, and initiate
intercompany transactions for multiple recipients. The transactions that you receive are
inbound transactions and the transactions that you initiate are outbound transactions.
The Intercompany Home displays the most recent transactions that require your
intervention. This page displays a summary of your open notifications, and a list of five
most recently received transactions.
On the Home page, you can search transactions by Inbound or Outbound Batch
Number, or navigate to the Create Batch page to create an intercompany transaction.
The Intercompany Transaction pages enables you to enter transactions addressed to
multiple recipients thereby speeding up data entry and simplifying management of
intercompany allocations.
There are two distinct flows for the Intercompany transaction entry and processing: an
outbound transaction flow, and an inbound transaction flow. These flows are
implemented in the Transactions pages as tabs: Outbound and Inbound. The Outbound
tab provides all the functions an initiator of an intercompany transaction can perform.
The inbound tab provides all the functions a recipient of the transaction can perform.
Outbound Transactions Page
Use the Outbound Batches page to create intercompany transactions in batch mode,
submit them to the recipients for approval. Additionally, you can search, personalize
views, create, and update batches. You can personalize and create new views.
You can create a batch for organizations you can access and include any number of
recipients in the batch.
Creating a batch is a two-step process:
• Enter the batch header and transactions.
• Enter the batch expense or revenue distributions.
Transferring Transactions to General Ledger
Intercompany transactions that do not need invoices are directly transferred to General
Ledger once approved.
Before you transfer the transactions, ensure the following:
• The transfer options are set in the Setup tab
• The corresponding period in general ledger is open
• The transaction status is approved
• The exchange rate exists between the intercompany and general ledger currency if
they are different
• The transaction date is specified for calculating the exchange rate
The workflow process transfers the intercompany transactions depending on the
options set in the System Options page of the Intercompany Setup tab. If you select
Online mode, then no intervention is necessary, the initiator and recipient workflow
transfers transactions on approval. If you select Batch mode, then you must run the
concurrent request to transfer the transactions or schedule the concurrent request.
Note: On successful transfer, the transaction status changes to
Transferred to Initiator GL or Transferred to Recipient GL respectively
for the initiator and recipient workflows. The Batch and Transaction
status is set to Complete once the transactions are transferred to both
initiator and recipient ledgers.
Intercompany only populates an interface table in General Ledger for
intercompany transactions. After Intercompany transfers the
transactions to the GL Interface tables, you must run or schedule the
GL Journal Import concurrent program to import these journals into
General Ledger for both the Online and Batch mode. The actual posting
of the transactions into the appropriate General Ledger accounting
tables is performed separately by the GL Posting process after the
journals are imported into General Ledger.
The initiator workflow transfers the intercompany transactions to Receivables to create
invoices as required by legal or business requirements. After creating the invoices,
Receivables updates the intercompany transactions with the invoice numbers and
passes the number to the recipient workflow, which updates and transfers the
transaction to Payables.
Before you transfer the transactions, ensure the following:
• Transfer options are set in the System Options page of the Intercompany Setup tab.
• Receivables Transaction Type, Receivables Memo Line are mapped to
intercompany transactions in the Invoicing Options subtab.
• Customer and supplier associations are defined in the Invoicing Options subtab.
• Transaction status is approved.
• Transaction date is specified for calculating the exchange rate.
The application transfers the transactions to Receivables and Payables depending on the
options set in the System Options page of the Intercompany Setup tab.
Execute the following steps to transfer the transactions in Online and Batch modes.
To transfer the transactions in Online mode:
1. The user must approve the transaction.
The initiator workflow transfers the intercompany transaction details to the
Receivables Interface tables and the transaction status changes to Transferred to
Receivables.
2. Run the Receivables AutoInvoice Program or schedule it to run at regular intervals.
On successful completion of the Receivables AutoInvoice Program, the invoice
number is updated on the Intercompany transaction and the recipient workflow
transfers the intercompany transaction details to Payables Interface tables and the
transaction status changes to Complete.
3. Run the Payables Open Interface Program or schedule it to run at regular intervals.
To transfer the transactions in Batch mode:
1. The user must approve the transaction.
2. Run the Transfer Intercompany Transactions to Receivables or schedule it to run at
regular intervals.
The transaction status changes to Transferred to Receivables.
3. Run the Receivables AutoInvoice Program or schedule it to run at regular intervals.
On successful completion of the Receivables AutoInvoice Program, the invoice
number is updated on the intercompany transaction.
4. Run the Transfer Intercompany Transactions to Payables or schedule it to run at
regular intervals.
The transaction status changes to Complete.
5. Run the Payables Open Interface Program or schedule it to run at regular intervals
• Introduction
• Setting up AGIS
Introduction
Advanced Global Intercompany System (AGIS) enables you to create, settle and
reconcile intercompany transactions. Intercompany transactions are transactions that
occur between two related legal entities in an enterprise or between groups in the same
legal entity.
1) Transactions that occur between two legal entities are called intercompany
transactions.
2)Transactions that occur between two groups within one legal entity are
called intracompany transactions.
The balances of the intercompany transactions must be eliminated or adjusted when
preparing the consolidated financial statement, or it might result in overstated financial
results, which in turn might lead to legal repercussions against the enterprise.
Intercompany transactions can be identified and eliminated by the use of specific
accounts to book these transactions. Defining these accounts allows you to book
transactions that are identified as intercompany transactions in the specific accounts.
These accounts must be defined as a part of the General Ledger setup process.
Before you start working on AGIS, you must setup the following:
• Complete the Accounting Setup Manager to set up General Ledger and legal
entities
• Set up AGIS
Intercompany Transaction Processing
Intercompany Home Page
Use the Intercompany Home and Transaction pages to receive, respond to, and initiate
intercompany transactions for multiple recipients. The transactions that you receive are
inbound transactions and the transactions that you initiate are outbound transactions.
The Intercompany Home displays the most recent transactions that require your
intervention. This page displays a summary of your open notifications, and a list of five
most recently received transactions.
On the Home page, you can search transactions by Inbound or Outbound Batch
Number, or navigate to the Create Batch page to create an intercompany transaction.
The Intercompany Transaction pages enables you to enter transactions addressed to
multiple recipients thereby speeding up data entry and simplifying management of
intercompany allocations.
Intercompany Transaction Page
There are two distinct flows for the Intercompany transaction entry and processing: an
outbound transaction flow, and an inbound transaction flow. These flows are
implemented in the Transactions pages as tabs: Outbound and Inbound. The Outbound
tab provides all the functions an initiator of an intercompany transaction can perform.
The inbound tab provides all the functions a recipient of the transaction can perform.
Outbound Transactions Page
Use the Outbound Batches page to create intercompany transactions in batch mode,
submit them to the recipients for approval. Additionally, you can search, personalize
views, create, and update batches. You can personalize and create new views.
You can create a batch for organizations you can access and include any number of
recipients in the batch.
Creating a batch is a two-step process:
• Enter the batch header and transactions.
• Enter the batch expense or revenue distributions.
Transferring Transactions to General Ledger
Intercompany transactions that do not need invoices are directly transferred to General
Ledger once approved.
Before you transfer the transactions, ensure the following:
• The transfer options are set in the Setup tab
• The corresponding period in general ledger is open
• The transaction status is approved
• The exchange rate exists between the intercompany and general ledger currency if
they are different
• The transaction date is specified for calculating the exchange rate
The workflow process transfers the intercompany transactions depending on the
options set in the System Options page of the Intercompany Setup tab. If you select
Online mode, then no intervention is necessary, the initiator and recipient workflow
transfers transactions on approval. If you select Batch mode, then you must run the
concurrent request to transfer the transactions or schedule the concurrent request.
Note: On successful transfer, the transaction status changes to
Transferred to Initiator GL or Transferred to Recipient GL respectively
for the initiator and recipient workflows. The Batch and Transaction
status is set to Complete once the transactions are transferred to both
initiator and recipient ledgers.
Intercompany only populates an interface table in General Ledger for
intercompany transactions. After Intercompany transfers the
transactions to the GL Interface tables, you must run or schedule the
GL Journal Import concurrent program to import these journals into
General Ledger for both the Online and Batch mode. The actual posting
of the transactions into the appropriate General Ledger accounting
tables is performed separately by the GL Posting process after the
journals are imported into General Ledger.
Transferring Transactions to Receivables and Payables
The initiator workflow transfers the intercompany transactions to Receivables to create
invoices as required by legal or business requirements. After creating the invoices,
Receivables updates the intercompany transactions with the invoice numbers and
passes the number to the recipient workflow, which updates and transfers the
transaction to Payables.
Before you transfer the transactions, ensure the following:
• Transfer options are set in the System Options page of the Intercompany Setup tab.
• Receivables Transaction Type, Receivables Memo Line are mapped to
intercompany transactions in the Invoicing Options subtab.
• Customer and supplier associations are defined in the Invoicing Options subtab.
• Transaction status is approved.
• Transaction date is specified for calculating the exchange rate.
The application transfers the transactions to Receivables and Payables depending on the
options set in the System Options page of the Intercompany Setup tab.
Execute the following steps to transfer the transactions in Online and Batch modes.
To transfer the transactions in Online mode:
1. The user must approve the transaction.
The initiator workflow transfers the intercompany transaction details to the
Receivables Interface tables and the transaction status changes to Transferred to
Receivables.
2. Run the Receivables AutoInvoice Program or schedule it to run at regular intervals.
On successful completion of the Receivables AutoInvoice Program, the invoice
number is updated on the Intercompany transaction and the recipient workflow
transfers the intercompany transaction details to Payables Interface tables and the
transaction status changes to Complete.
3. Run the Payables Open Interface Program or schedule it to run at regular intervals.
To transfer the transactions in Batch mode:
1. The user must approve the transaction.
2. Run the Transfer Intercompany Transactions to Receivables or schedule it to run at
regular intervals.
The transaction status changes to Transferred to Receivables.
3. Run the Receivables AutoInvoice Program or schedule it to run at regular intervals.
On successful completion of the Receivables AutoInvoice Program, the invoice
number is updated on the intercompany transaction.
4. Run the Transfer Intercompany Transactions to Payables or schedule it to run at
regular intervals.
The transaction status changes to Complete.
5. Run the Payables Open Interface Program or schedule it to run at regular intervals
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