Oracle Cloud Fusion Intercompany Invoicing Flow (IC AR/AP)

Introduction
In today’s global economy many companies are doing business around the world, locating
subsidiaries/entities where they can get the best tax, manufacturing and distribution benefits. Trading
between these entities for the provision of goods or services therefore needs to be accounted as
intercompany activity. In many legal jurisdictions around the world there is the requirement that
invoices be generated with the appropriate tax, for these intercompany transactions. This paper looks at
the set up required to achieve invoicing for intercompany transactions.

Contents
1. Introduction
2. Summary of setup
A. Ledger Options
B. Legal Entities
C. Legal Function
D. Business Units
E. Tax
F. Supplier and Supplier Sites
G. Customer and Customer Sites
H. Intercompany Systems Options
I. Intercompany Transaction Types
J. Intercompany Period Status .
K. Intercompany Organizations .
L. Customer Supplier Assignments
M. Receivables Assignments
N. Intercompany Balancing Rules
O. Intercompany Approval Rules
P. Transaction Account Rules
Q. Access to Intercompany Organizations
Oracle Fusion Intercompany can record intercompany transactions that interface to Receivables and
Payables to generate and record invoices. The provider side of the transaction is recorded in Receivables
where an invoice is generated and the receiver side along with the receivables invoice information is
recorded in Payables.

Ledger Options
Navigator Setup and Maintenance Financials Implementation Project Define Common Applications
Configuration for Financials Define Ledgers
Check the Enable Intercompany Accounting option on the Specify Ledger Options UI

Legal Entities

Navigator Setup and Maintenance Financials Implementation Project Define Common Applications
Configuration for Financials Define Enterprise Structures for Financials Define Legal Entities for
Financials

Define legal entities for the Enterprise. These will be used in the intercompany setup when
intercompany organizations are assigned to legal entities.

C. Legal Function

Navigator Setup and Maintenance Financials Implementation Project Define Common Applications
Configuration for Financials Define Enterprise Structures for Financials Define Legal Jurisdictions and
Authorities for Financials
Choose the legal function Generate intercompany invoice to make the option available for the
jurisdiction you are planning to use for your legal entity.

Then assign the Generate intercompany invoice option to a legal entity via the Legal Entity Registration
page.

Navigator Setup and Maintenance Financials Implementation Project Define Common Applications
Configuration for Financials Define Enterprise Structures for Financials Define Legal Entities for
Financials Manage Legal Entity Registrations
Create a row for the legal function Generate intercompany invoice to enforce invoicing on a legal
entity.
Alternatively, you can choose not to set this option at the legal entity level but instead choose invoicing
for only certain transaction types used to create intercompany transactions. This is defined within
Intercompany.