In Oracle Fusion Applications, a line manager can easily handle intercompany transactions with real time visibility of pending activity and native collaboration for resolving disputes. These transactions can create both Payables and Receivables transactions. Although these features are present in Oracle EBS R12, but for  PeopleSoft and with EBS R11.5.10.users the Generation of intercompany invoices for manual intercompany transactions were lacking.  Support for multiple balancing segments is also a benefit compared to EBS but we have not seen any customer use this feature thus far.  

In Fusion Applications, the typical job roles required by the user to operate on intercompany transactions are “Intercompany Accountant” and “Line Manager”

The role of Line Manager allows approving & rejecting of intercompany transactions.  Companies typically give Line Managers access to AGIS to enter intercompany transactions.  Companies that only allow intercompany accountants to enter intercompany transactions will enter both sides of the intercompany transaction, thus negating the need for further approval in the system.

These intercompany features Fusion allow Accelerated close process and improved control through automated reconciliation.

Setup Data Required

• Multiple legal entities transacting across multiple primary ledgers.  Some legal entities require intercompany invoices, some don’t.  [In the current release of InFusion, we only have two legal entities set up within a single ledger.  Cross-ledger intercompany transactions will be supported in future releases of InFusion.]

• Approval rules

• Internal customer/supplier relationship if generating intercompany invoices  

• Intercompany balancing rules and ledger balancing options defined

• Intercompany segment in chart of accounts

• Define employee setup needed for contextual actions

• Define TAB rules for defaulting accounts onto intercompany transaction [not set up in current release of InFusion]

Transaction Data Required  

• Intercompany Transactions Processing work area should include transactions in a variety of statuses – awaiting approval, approved, rejected, incomplete, errors, reversed, import errors, etc.

• Be sure to stage enough data so we can adequately showcase all the benefits of the Intercompany Transaction Processing work area.  When drilling down from the work area to other application pages to show the transactions, be sure each application page has enough data for it to look ‘full’, and transaction batches have multiple transactions and/or transaction distributions in them.

• Intercompany transaction already defined in spreadsheet for upload

Intercompany Transaction Processing

1. Pre Requisites for Demonstration Flow – Make sure there are intercompany transactions available for approval (step 3) and transactions pending approval from other (step 4).  If there are no transactions available, use the Duplicate feature in Manage Outbound Transactions to make copies of existing intercompany transactions and submit them to obtain the approval status required for the demo.

2. Intercompany Accountant/Line manager logs into the application (sneha.thomas/Welcome1) and navigates to the Intercompany Transactions Processing work area.  (Navigator>Intercompany Accounting >Transactions)

3. He sees there are some transactions awaiting his approval.  He recognizes one of them and highlights the row and clicks on the Approve button at the top of the table.  He selects one that is unfamiliar and drills into the View Intercompany Transaction page to review the details.  He decides to work on this one later, so he clicks on the Done button at the top.

4. He returns to the work area and selects the “Pending Approval From Others” tab.  He selects one transaction that has been outstanding for weeks and uses contextual actions to contact the approver to inquire about the delay.  He clicks on the name of the Receiver for the transaction.  A window opens up that shows the Intercompany Organization Information.  In the row for Default Organization Contact, there is a person’s name.   Click on the orange square to the left of his name to display the contextual actions window.

5. To enter a new intercompany transaction, he clicks on the ‘Single Batch Spreadsheet Entry’ link in the Tasks pane on the left.  [You must perform this step while logged onto Fusion Applications in the Windows Client because ADFdi is installed on the Windows Client.]  This opens up a spreadsheet template for him to enter a transaction.  After entering the transaction, he clicks on the Submit button in the spreadsheet to upload it.

6. He can view the uploaded transaction in the Incomplete tab in the Intercompany Transactions Work Area.  Click on the Batch Amount of the transaction he just loaded to view the transaction in the Edit Intercompany Batch page.  Make any necessary edits and click on the Submit button to submit the transaction for approval.  [Note: Depending on the intercompany transaction type you use, the transaction might not require approval.]

7. After transactions are approved, they can be transferred to General Ledger, or routed to Receivables and Payables if intercompany invoices are required.  To view a GL journal created from an intercompany transaction, navigate to Manage Journals (Navigator>General Accounting>Journals>Manage Journals).  Query on the Journal Batch Name “2003 Global Intercompany A 72435 72437”.

8. Drill from the GL journal to View Intercompany Transaction by clicking on the debit or credit amount for any of the journal lines.

9. When intercompany AR/AP invoices are required, an intercompany transaction is transferred to Receivables and Payables.

Navigate to Billing (Navigator>Receivables>Billing>Manage Transactions)  Query by the Transaction Source ‘Global Intercompany’.  Select  Transaction Number ‘10000’.

Navigate to AP Invoices (Navigator>Payables>Invoices>Manage Invoices)  Query by Invoice Number ‘10000’.

Details of Intercompany Transactions region

1. Make sure there are intercompany transactions available for approval, editing, and completion from the dashboard.  If there are no transactions available, use the Duplicate feature in Manage Outbound Transactions to make copies of existing intercompany transactions and submit them to obtain the approval status required for the demo.

2. Log into the application and navigate to the Intercompany Transactions Processing work area.  (Navigator>Intercompany Accounting >Transactions).  Highlight the following:

   1. Review transactions that require attention, require approval, pending approval, and/or incomplete.  Also review import errors. Take action from the dashboard, such as approve or reject transactions.

   2. Highlight UI features – change column order, change column size, change columns viewed, sort, detach, export to Excel, query by example,  freeze, wrap, collapse/display Task pane on the left, contextual actions

   3. Highlight Personalization features – set preferences, re-order regions, hide regions, add content.

   4. Drill down on a transaction from the dashboard to view transaction details.

   5. Information on Intercompany Transactions Processing work area is also available on General Accounting Dashboard.

   6. Automatic Accounting using SLA Transaction Account Builder

Intercompany Reconciliation

Let us see how Intercompany Accountant reconciles intercompany account balances at the end of an accounting period.  

The following job role is required to be allocated to the user, “Intercompany Accountant”. The intercompany reconciliations allow you to do a faster close process in Fusion General Ledger.

Pain/Feature/Benefit

Transaction Data Required  

• For optimal report content, have some trading partners that are in balance (intercompany receivables match intercompany payables) and some trading partners that are not in balance.  For those that are out of balance, following are some reconciling issues you can embed in the data.

  • Two trading partners have intercompany balances that do not agree because one of them did not book their side of the entry while the other did.  

  • A manual journal line that is not from an intercompany journal is erroneously booked to an intercompany receivable or payable account, causing a discrepancy.

Preparation Steps

1. We will be creating intercompany transactions between two legal entities (InFusion IC USA1 and InFusion IC USA2) in the same ledger (InFusion USA PL).  When an intercompany transaction is entered for a provider and a receiver that belong to the same ledger, and when the transaction is transferred to General Ledger, both the provider and receiver sides of the transaction are combined into a single journal entry in General Ledger.  When the journal entry is posted in General Ledger, the Intercompany Reconciliation report shows that both the provider intercompany receivable balance and the receiver intercompany payable balance are in balance, and there are no reconciliation differences.  The only difference that can be displayed in the Intercompany Reconciliation report is posting of journal entries to the intercompany receivable or payable accounts that come from a journal source other than Global Intercompany.  The following steps guide you to determine if this data entry has been done, and what to do if it hasn’t been done.

2. Login as sneha.thomas/Welcome1.

3. Navigate>General Accounting>Journals>Manager Journals.  Query on journal batch name ‘2003 Global Intercompany A 72435 72437’.  If this journal batch is unposted, post the batch.  The Intercompany Reconciliation report only displays balances for intercompany accounts that have posted journals.  If this journal batch has already been posted, then proceed to the next step.

4. Navigate>Intercompany Accounting>Reconciliation.  Click on the link ‘Intercompany Reconciliation’ in the Tasks panel on the left.

5. Click on the ‘Schedule New Process’ button in the Search Results table.

6. Select the process name ‘IntercoReconciliationDataExtract’.  Click OK.  

7. Select the Provider Ledger ‘InFusion USA PL’.  Select Accounting Period ’01-12’.  Click the Submit button.  Remember the request number and click OK in the window that tells you the submission was successful.

8. In the Search Results table, refresh the results to see if the request has completed.  When it is completed, scroll to the bottom of the page and select the Request # in the Choose Request field.  If you do not see the request number in the list of values, that is due to a page refresh issue that is known.  Navigate to another page and return to the Intercompany Reconciliation page and you will then see the request number in the LOV for Choose Request field.  Click on the View Report button after selecting your request number.

9. If the report is balanced without any reconciliation differences like in the ‘Balanced’ screenshot, then proceed to step 10.  If the report is not balanced like in the ‘Unbalanced’ screenshot, then you are ready to execute the demo flow.

Balanced:

Unbalanced:

10. Navigate>General Accounting>Journals>Create Journal.  We will enter a manual journal to create a difference in the Intercompany Reconciliation report.  Enter the journal entry &  Post the journal.  

11. If the journal is sent to an approver, log in as pooja.chougule/Welcome1 and approve the journal.  After log in, click on the Financial Worklist icon.  Find the journal in the task list and click on it.  In the page that opens, click on the Approve button at the top.  Close the window after you approve.

12. Log back in as sneha.thomas/Welcome1.  Query the Expense Adjustment journal (Navigator>General Accounting>Journals>Manage Journals) and post it.

13. Run the Intercompany Reconciliation report again as in steps 4-10.  The report should now look like this.

Demonstration Flow

1. It is the end of the accounting period, and the Intercompany Account needs to reconcile intercompany balances and make sure all intercompany transactions are booked to their respective ledgers in the correct amount.  He had scheduled the Intercompany Reconciliation Extraction Program to run overnight and now he is ready to view the results.  He logs into the application and navigates to the Intercompany Reconciliation work area and queries up the request that he ran.  (Navigator>Intercompany Accounting >Reconciliation.  Select the request that you ran in the Pre-preparation steps.)

2. He had run the reconciliation report for all legal entities in the InFusion USA PL ledger, so the report displays all pairs of transacting parties within the ledger and their intercompany receivable and payable balances.  He notices a discrepancy reported for intercompany activity between legal entity InFusion Corp USA1 and legal entity InFusion Corp USA2.  To view what might be causing the discrepancy, he clicks on the amount in the Difference column to the right.  It drills down to a page that shows the account balances broken down by journal source.

3. He sees that a manual journal has been posted to the intercompany payables account which is causing the difference.  He clicks on the amount for the manual journal source to view the journal and determines that it was erroneously posted to this account.

4. If desired, you can fix the problem by reversing the manual journal, and re-run the reconciliation to make  two entities balance.

5. The following further cool things can be done by the user:

   1. You can export the report to Excel at any level – account balance, journal lines, subledger lines

   2. You can change the layout of the intercompany reconciliation report using BI Publisher - sort columns, change column order, hide/show regions, etc.

Anjan Mukerji

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