Intercompany Trade Agreement - Time and Material (tcitr1610m000)

Use this session to specify time and material trade scenarios and pricing information for an intercompany trade agreement with intercompany trade scenario Subcontracting Depot Repair.

 

Intercompany Trade Agreement

An attribute that includes the intercompany trade details for an intercompany trade scenario. An intercompany trade agreement is linked to an intercompany trade relationship, together with the intercompany trade scenario.

For the applicable intercompany trade scenario and trade relationship, an intercompany trade agreement:

  • Determines whether internal invoicing is used.
  • Determines whether intercompany trade orders must be approved before they can be processed.
  • Includes the transfer pricing rules that determine the amounts of the intercompany trade transactions.
  • Determines the amounts of the internal invoices, if internal invoicing is specified.
Example

Sales office S1 and warehouse W1 are part of organization A, but are located in different countries. To fulfill a sales order to an external customer, S1 instructs W1 to deliver the goods to the customer. W1 sends an internal invoice to S1 to cover the costs for the goods and the delivery. The amount of the internal invoice is based on the sales order price.

Scenario

A business process, such as External Material Delivery Sales, involving two parts of an organization defined as entities. An intercompany trade scenario is linked to an intercompany trade agreement. The intercompany trade scenario and the intercompany trade agreement are linked to an intercompany trade relationship.

Example

The entities sales office S1 and warehouse W1 are part of organization A, but they are located in different countries. To fulfill a sales order to an external customer, S1 instructs W1 to deliver the goods to the customer. W1 sends an internal invoice to S1 to cover the costs for the goods and the delivery. The amount of the internal invoice is based on the sales order price.

Time and Material Scenario

intercompany trade scenario for price origin Time and Material.

For the price origin Time and Material, specific intercompany trade scenarios are available:

  • Internal Material Delivery
  • Labor/ Expenses
  • Other