Automated service invoicing between different affiliates
Henkel asked us to develop a tool, integrated into their central SAP ERP system to allow automated service invoicing between the different affiliates, based on cross-company CO allocations.
In recent years, Henkel have changed their supply chain operating model, leading to an increase in the number of legal entities and the amount of service charging between those legal entities. Within the Henkel Group, many services are handled by specific legal entities on behalf of other affiliates. As such, supply chain companies are, for instance, separated from sales and marketing companies and provide different kinds of services. The exponential increase in cross-company cost allocations, as well as legal restrictions, service agreements between affiliates and exchange rate issues, called for a process improvement with regards to efficiency, traceability, automation and monitoring.
Together with the internal Henkel CO consulting team, the PIKON consultants were asked to develop a new solution, covering the above-mentioned requirements as much as possible with SAP standard solutions. After a concept phase, in which many different solutions were analysed, the most adequate solution was found to be Resource-Related InterCompany Billing (RRICB).
Resource-Related InterCompany Billing allows invoicing intercompany services (especially during month-end), based on the CO allocations that occur during the month.
The main standard components of a RRICB-setup are:
- Set up of reconciliation ledger (optional). We decided to use this in order to make the exchange rate differences visible between legal entities with different local currencies
- DIP (Dynamic Item Processing) configuration, based on cost element and profit center assignment
- Contract type, debit/credit memo request and debit/credit notes set up in SAP SD
- Extended pricing procedure
- Account determination
- Separated profit center derivation
- Integration into SAP CO-PA
- Creation of official legal invoice documents
Additionally, we enhanced the standard functionalities with the following features:
- Extension of allowed CO business transactions for cross-company code allocations
- Validation rules between sending and receiving legal entities, during plan & actual cost allocations, based on business cases and cost objects
- Blocking creation of multiple contracts for the same legal entity combination
- Foreign currency exchange rate difference reposting
- EDI settings for automated mirror postings in the receiving legal entities
By the unique combination of an improved SAP standard functionality, enhanced to comply with specific customer requirements, we provided Henkel with a state-of-the-art solution for intercompany service invoicing.
With the implementation of Resource-Related InterCompany Billing (RRICB), Henkel uses a fully automated process that complies with legal & internal service invoice requirements. Furthermore, risks of posting unallowed and incorrect CO allocations have been eliminated thanks to an extended validation approach. The new process ensures a highly reliable and faster month-end close, including the automated allocation of currency exchange rate differences.
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