Intercompany Invoicing in AGIS

One of the key features introduced with the new Advanced Global Intercompany (AGIS) in R12 of Oracle E-Business Suite is the ability to create documentation for Intercompany transactions. The correct documentation is required in many countries for Intercompany trading, this essentially means I need to provide a Receivables Invoice for the Legal Entity Providing the goods or service and a payables invoice for the receiving Legal Entity. These invoices should have any taxes that are applicable in the jurisdictions, for that type of service.

We do not firce you to create invoices for all Intercompany Activity, you can still create just a GL Journal entry if you prefer. The AGIS transactions flow is illustrated in the diagram below.

invoice-required.jpg

You can see that we check if invoices are required and there are two places that we look for that. First is the AGIS transaction type flag, seen on the AGIS Transaction Page in the Set Up Tab.

trx-type.jpg

<click image to see full size>

You can also create a rule in the Legal Entity setup, we create that rule at the registration level. This is set by selecting the Legal Function ‘Create Intercompany Invoice’ when entering the Legal Entity Registration. If the this rule is set for one of the Legal Entity involved in an AGIS transaction it will take precedence over the Transaction Type rule and the invoice will be created.

We create an AR invoice (via an Invoice API or the Open Interface tables) at that point the eTax module will kick in and calculate the tax for you and add that to the invoice. When the AR invoice has been created we create the AP invoice (via the AP Invoice Interface) using the invoice number from the AR invoice – so should be easy to match those invoices. We also ensure that the same information required by eTax is on the AP invoice so the tax calculation will be the same on the AR and AP invoices.

On of the key aspects of AGIS is that we will not create an AR or AP invoice or a GL journal until both sides of the transactions have approved it and we checked that the appropriate periods are open in GL, AP or AR. This means that there is no possibility of one side of the transaction going through and then the other side rejecting or changing the Accounting Date so they hit different periods or anything else that will make reconciliation and elimination of Intercompany cumbersome.

24 Responses

  1. David,

    It may look like a weird question, but does AGIS also offer intracompany invoicing?

    To be honest, I doubt that it is possible because the invoicing part is contradictory to the term intracompany. But I came across the requirement to generate invoices for transactions between operating units of the same legal entity. I guess that I will have to create a legal entity for every one of those operating units if I want to have the invoicing.

    Best regards,

    Steven.

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  2. you can do inter or intra company transactions in AGIS. Just create 2 intercompany organizations and assign them to the same LE. Then you can create transactions with invoicing if desired. We deliberatly allow this functionality as it is a requirement we have heard.

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  3. Hello,

    I use Oebs 11.5.10. I have simple inter company set-up( Oracle Inventory User’s Guide – intercompany Invoicing). I do not use GIS. Now I am preparing to upgrade to 12i. That I have question. Do I have to set-up AGIS to use my present functionality?

    Regards,
    Łukasz

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  4. There’s two options on the Intercompany Transaction types, they are Allow Invoicing and VAT taxable. Can you please let me know what happens wif these options are enabled??

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  5. Waht are the Basic setups for intercompany in AR and AP and How it will generate invoice in both of module (Simple steps required with Chart)

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  6. My clinet requirement is exactly matching to AGIS Functionality. So I started setting up the whole thing in the system. I initiated a batch and the ststus fo which from the Initiator is “Submitted”…

    But the same is not appearing in the Inbound for the recipient…

    Do i need to run any concurrent program so as to appear this in the Inbound.

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  7. David;
    We process shared services transactions whereby entities from separate ledgers are processed by one entity in behalf of others. This occurs with AP and Customer invoices and their liquidation. Besides the problem of applying the receipt to the customer invoice – which can only be done where the invoice applied to is in the same operating unit in which the receipt is being applied. We plan to populate I/C segment to identify transactions done “in behalf” of other BSVs/Comapnies within the family of companies.
    I was thinking of extracting all transactions with distributions where the BSV is to a different value than that in the I/C segment (where I/C segment is not zero’s). Then using this with some code to get a file in the right format to import into AGIS for processing the due to / due from portion of the entry.

    Is this viable? Have you heard of something similar?

    Thanks, David

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    • Can AGIS be used to capture AP trade invoices at the Shared Service entitiy and used to record the corresponding expense (example: utilities) in the seperate ledger for one of the other companies. So Shared service pays expense and creates AP Liab in ES ledger and IC clearing Account to the appropriate Company in ES ledger can this IC be “pushed to the appropriate comapny using AGIS. Or is AGIS only to capture the due to due from which looses the ability to tie this to the priginal AP expense.

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  8. Follow up to last post on shared services: I know that AGIS will generate more than the due to due from pieces. AGIS posts to all intercompany organizations defined in any ledger.

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  9. Hello David:
    Is it possible within standard R12.1.3 functionality to create an intercompany or intracompany invoice based on a manual GL JE that is booked to a designated interco/intraco clearing account?

    Thanks,
    Beth

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  10. Dear David, Please help with this misery.

    The Payables Open Interface Import program is generating additional tax line for every additional line if transaction.

    Below are the scenarios:

    scenario #1:Single line item

    AR Invoice {single line trx)
    Dr. Receivables 180
    Cr. Revenue 150
    Cr. Tax 30 [20% tax rate]

    AP Invoice {single line trx)

    Dr. Purchases 150
    DR. Tax 30 [20% tax rate]
    Cr. Payables 180
    ————————
    scenario #2:Multiple line item

    AR Invoice {multi 2 line trx)
    Dr. Receivables 180
    Cr. Revenue 100
    Cr. Revenue 50
    Cr. Tax 30 [20% tax rate]

    AP Invoice {multi 2 line trx)

    Dr. Purchases 100
    Dr. Purchases 50
    Dr. Tax 30 [20% tax rate]correct
    Dr. Tax 30 [20% tax rate]
    Cr. Payables 210

    Extra tax line added [error]
    ————————

    scenario #3:Multiple line item

    AR Invoice {multi 3 line trx)
    Dr. Receivables 180
    Cr. Revenue 100
    Cr. Revenue 30
    Cr. Revenue 20
    Cr. Tax 30 [20% tax rate]

    AP Invoice {multi 3 line trx)

    Dr. Purchases 100
    Dr. Purchases 30
    Dr. Purchases 20
    Dr. Tax 30 [20% tax rate] correct
    Dr. Tax 30 [20% tax rate]
    Dr. Tax 30 [20% tax rate]
    Cr. Payables 240

    Extra 2 tax line added [error]
    ————————

    Problem:
    Payables Open Interface program creates extra tax line for each additional line item inherited from Receivables.
    ————————
    scenario #4: Multiple line item

    AR Invoice {multi 4 line trx)
    Dr. Receivables 180
    Cr. Revenue 60
    Cr. Revenue 40
    Cr. Revenue 30
    Cr. Revenue 20
    Cr. Tax 30 [20% tax rate]

    AP Invoice [multi 4 line trx)

    Dr. Purchases 60
    Dr. Purchases 40
    Dr. Purchases 30
    Dr. Purchases 20
    Dr. Tax 30 [20% tax rate]correct
    Dr. Tax 30 [20% tax rate]
    Dr. Tax 30 [20% tax rate]
    Dr. Tax 30 [20% tax rate]
    Cr. Payables 270

    Extra 3 tax line added [error]
    ———————–

    The Total AR Invoice amount is constant at 180, while Total AP Invoice is incremental with additional tax line for each additional intercompany line transaction.

    Please, what could be the cause?

    Please I would appreciate your quick assistance. Thanking you in anticipation of your help.

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  11. Is it possible for us to create an AGIS invocie with Zero Amount?

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    • From memory i would say yes. As long as you don’t set a minimum transaction amount in the system options I think this should work.
      However, I am not sure what the business need is, why do you need a zero invoice?

      Like

  12. Hey David,

    How would an entry at the subledger level or at the General Ledger level interact with AGIS?
    Would AGIS still pick up these transactions?

    Thanks,
    Paul

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  13. Hey David,

    I have done the set up of transaction type, In invoice option could you please show me how to create the GIS of i’m the customer and I have contact with supplier or opposite.

    Thanks,

    Like

  14. Hi David,

    I was hoping you can help me answer a question on AGIS in relation to the AR invoice created. My issue is i have multiple lines ie 3 lines on my AGIS, when I import to AR from the AGIS module, AR is creating 3 individual invoices for each line rather then one invoice with the 3 lines, is there a way in the setup in AR to change this or is this not possible?

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  15. Hi….can you use AGIS for inventory (i.e., direct shipments from Mfg to Sales branches)? Have other customers chosen AGIS over Create Interco AR/AP? If so…..any issues? We are exploring this because we want to support only one method of interco invoicing…..not multiple.

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  16. Hi….how hard is it to do cross-instance AGIS transactions? Would we have to build our own integration? Both instances are running 12.1.

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    • You would need to build some integration, but the architecture is such that you can do it with non invasive customizations. Without getting into too much details, you just use the Workflows and Business Events to trigger moving it to the remote instance.

      Like

  17. Hi David,

    Have you dealt with instances where the intercompany transaction (Loan) from one LE to another LE but the flow of the transaction goes through a number of companies and holding company. So the flow of the loan is between 2 entities but the flow of the legal is through 5 LEs.

    Thanks,

    Saheed

    Like

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