Inventory Setup for Intercompany Invoicing

Intercompany Invoicing Inventory Setup Information

Steps to Implement the Multiple Organization Support

1. Develop the Organization Structure
2. Define Ledger and GRE/Legal Entity
3. Define Organizations
4. Define Organization Relationships
5. Define Responsibilities
6. Set the Operating Unit Profile Option for Each Responsibility
7. Convert to Multiple Organization Architecture
8. Define Inventory Organization Security (optional)
9. Change Order Entry Profile Options (optional)
10. Update Profile Options Specific to Operating Units
11. Implement the Applications Products
12. Secure Balancing Segment Values by Legal Entity (optional)
13. Run the Setup Validation Report (recommended)

Prerequisites to Using the Intercompany Invoicing Process

1. Define your intercompany relations.
2. Define your Oracle Receivables system options.
3. Define your Oracle Payables system options.
4. Define your tax structures in Oracle Payables and Oracle Receivables.
5. Set up the Account Generator for the Cost of Goods Sold accounts.

Inventory Setup Confirmation Steps

1. Verify Set of Books, Legal Entity, & Operating Unit:

A) Navigation: Inventory-> Setup-> Organizations
B) Select the particular organization in question (Both organizations, i.e. Japan, US).
C) Select the Inventory Organization under "Organization Classifications" and click on the "Others" button.
D) Select "Accounting Information".
E) Open up the "Additional Organization Information".
F) "Accounting Information" flexfield will open with Set of Books, Legal Entity, and Operating Unit.
G) Confirm that the information in these fields is accurate and relevant to the particular organizations involved in the Intercompany process.

2. Intercompany Relations Defined:

A) Navigation: Inventory-> Setup-> Organizations-> Intercompany Relations
B) Confirm the Operating Units:
Shipping:
Selling:
C) AR Invoicing for Shipping:
Customer:
Number:
Location:
Transaction Type:
D) AP Invoicing for Selling:
Supplier:
Site:
Freight Account:
E) Revalue Average:

3. Verify Ledger:

A) Navigation: Inventory-> Setup-> Financials-> Books
B) Select the particular Ledger
C) Chart of Accounts defined
D) Functional Currency defined
E) Accounting Calendar defined

4. Verify Currency Codes:

A) Navigation: Inventory-> Setup-> Financials> Currencies-> Currency Codes
B) Ensure that the currency codes used are active and have not been disabled (Scroll to the right)

Profiles Options:

1. Consistent Profile Option Values:

All responsibilities in one operating unit must share the same profile option values and the same sequence numbering option. The Validation Report indicates an error if this is not the case, and notes when profile options should be set at the responsibility level.

2. HR:Business Group

This section applies to you only if you have multiple business groups, or if you do not choose to use the default business group provided by Oracle Applications.

If you have multiple business groups, you must associate each responsibility with one and only one business group. You associate a responsibility with a business group via the HR:Business Group system
profile option. If you are upgrading to Multi-Org, you must also associate each existing responsibility with a business group.

After you have associated business groups with responsibilities, you can enter business group setup information such as additional organization information and business group classifications.

If you have multiple business groups, verify the HR:Business Group profile option before you define organizations in each business group.

3. MO:Operating Unit

You must set the MO:Operating Unit profile option for each responsibility.
Set this profile option to the appropriate operating unit id (ORG_ID) for each responsibility. The operating unit context for each responsibility is set via this profile option.

This profile option must be set for Oracle Training Administration (OTA) responsibilities when OTA is used in a Multi-Org environment. This is to ensure that the OTA customer and supplier functions work correctly in a Multi-Org environment.

You must also define the default operating unit by setting the MO:Operating Unit profile at the site level. If this is a fresh installation, the default operating unit can be any operating unit you have defined. If this is an existing installation, you should assign as the default operating unit the operating unit to which all existing data should belong.

4. The following profile options affect the operation of the Create Intercompany AR Invoices process:

a) INV: Intercompany Currency Conversion
Determines the conversion type for foreign currency invoices.

b) Tax: Allow Override of Tax Code
Determines whether tax code information should be passed to AR for freight.

c) Tax: Invoice Freight as Revenue
Indicates whether freight lines should be invoiced as revenue lines.

d) Tax: Inventory Item for Freight
Use this inventory item when freight lines are invoiced as revenue lines.

e) OE: Item Validation Organization
Inventory organization in which the freight item specified in the profile
Tax: Inventory Item for Freight is defined.

5. OE:Item Validation Organization

The OE:Item Validation Organization profile option determines the inventory organization that Order Entry uses to validate items. Some inventory item attributes for Receivables and Order Entry, including
Tax Code and Sales Account, are specific to an operating unit or an accounting flexfield structure. Therefore, you should use the OE:Item Validation Organization profile option to define an item validation organization for each operating unit.

NOTE: Profile OE:Item Validation Organization is no longer used from 11.5.x forward. Instead a system parameter in order management is used to set the OM (order management)item validation org.
Responsibility: Order Management Super User
Navigate to: Setup > System Parameters > Values
Select the applicable operating unit (for instance: Vision Operations)
Select the category as Generic Parameters
Review the line for parameter = Item Validation Organization

Also, it is important that profile QP: Item Validation Organization is set to the same value as defined for the OM system parameter for item validation.

6. Update Profile Options Specific to Operating Units

Use the Update System Profile Options window to set profile options that are specific to each operating unit. You must set these profile option values for all relevant responsibilities that connect to each operating unit.

Some profile options, including AR:Receipt Batch Source and AR:Transaction Batch Source, reference data that is secured by operating unit. You must set these profile options at the responsibility level.

For profile options that need to differ at the operating unit level, including OE:Item Validation Organization, OE:Set of Books, and GL Set of Books, you must set the values at the responsibility level. Oracle General Ledger windows use the GL Set of Books profile option to determine your current set of books. If you have different sets of books for your operating units, you should set the
GL Set of Books profile option for each responsibility that includes Oracle General Ledger windows.

For profile options that need to differ at the set of books level, including Sequential Numbering, set the values at the responsibility level.

Profile options specify default values that affect system processes, system controls, and data entry. In a multiple organization environment you may want to confine the effect to a specific operating unit. Therefore, you may want to change your profile options to be visible and updatable at the responsibility level.

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