Intercompany trade for labor and expenses
Example
A multi-national company carries out an off-shore project in Dubai. This project is managed by the head office in the Netherlands while the actual implementation is performed by staff from the local departments. The local departments charge the head office for the hours and expenses spent on the project.
If an employee books hours or expenses spent on behalf of another department, you can set up intercompany trade to determine the amount that the employee's department can internally charge the department owning the order or project that the employee helped complete.
In Financials, this amount is booked as revenues for the employee's department. For the order's department, the amount is booked as costs owed to the employee's department. If required, you can specify that the employee's department invoices the order or project's department.
The intercompany trade scenarios Labor and Expenses provide various options to define the rates that are used to determine these amounts.
The intercompany trade process for hours and expenses
If intercompany trade is set up for hours and expenses, the application creates intercompany trade orders for each hours or expense booking in the relevant sessions in People. On the intercompany trade order, a general hours or expense booking is displayed as the originating object. When hours or expenses are booked for an order or a project, the order or project is the originating object, and the hours or expense booking is the related object.
Multiple logistic companies
Hours and expenses can be booked across multiple logistic companies in these cases:
- Book hours for a project or an order in a logistic company that is different from the logistic company of the department of the employee.
- Book expenses for a project in a logistic company that is different from the logistic company of the department of the employee.