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Inter site profitability postings

  • 8 September 2021
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I need to know how to determine the site profitability using Inter site profitability postings, in the same company inter site flow. The check box ‘Inter site profitability postings’ is selected in the Company > Distribution tab > Order sub tab.

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Best answer by Asela Munasinghe 8 September 2021, 14:49

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  1. Use the Inter-site Profitability feature on the Company/Distribution/Order tab to perform the profitability analysis on all the sites within a company
  2. If the Inter-Site Profitability option on the Company/Distribution/Order  tab has been selected, the transactions and posting types dedicated only to inter-site profitability will be triggered when internal customer orders are delivered
  3. A prerequisite to analyzing sites as profit centers is that internal prices must have been used and controlled on the supplying sites. The normal price search used on customer orders will be used to find an internal price. The sales price on the internal customer order line will be used to post internal revenue on the supply site and the internal revenue received on the demand site. The inventory part value on the supply site will be used when posting internal cost of sale on the supply site and also when posting the internal cost of sale received on the demand site. (it is the delivery of the customer order on the supply site that triggers the inter-site profitability transactions)
  4. Inter-Site Profitability Transactions with Posting Types Used

System Event

Description

Debit

Credit

INTREV

Internal revenue generated from sales price on internal CO delivered to a site within the same company

M160 - Internal Customer Claims

M159 - Internal Sales Revenue

INTREVR

Internal revenue received from sales price on internal CO delivered from a site within the same company

M162 - Internal Purchase Expenses

M161 - Internal Purchase Debts

INTCOS

Internal cost of sale generated by internal CO delivered to a site within the same company

M163 - Internal Cost of Sales

M164 - Internal Cost of Sales Contra

INTCOSR

Internal cost of sale received from internal CO delivered from a site within the same company

M166 - Internal Cost of Sales Received from Other Sites Contra

M165 - Internal Cost of Sales Received from Other Sites

  1. The INTREV and INTCOS transactions are posted on the supply site. The INTREVR and INTCOSR transactions are posted on the demand site. The control type is identified by the site on the transaction; and not by the site to which the order reference belongs. 

e.g. On the supply site, a CO1 internal customer order will be registered for the demand site of inventory part X. Part X belongs to the product family A on the supply site, and the product family B on the demand site. The inter-site postings should be controlled using the control type Product Family. When the delivery is made for CO1, postings will be made on both the demand and supply sites. The postings on the supply site will get the control type A. The postings on the demand site will get the control type B.

  1. Control types that are not available on both the demand and supply sites cannot be used as control types for the inter-site postings. For example, the Sales Group control type is not available because the sales group can only be found on the supply site and not on the demand site.
  2. Preferably this should be started between periods, e.g. at month-end or year-end, starting at the middle of a period dosen’t make sense
  3. In Posting Control page, posting types must be set up for the postings used by the inter-site profitability transactions. Otherwise, the postings will contain errors. There is no default setup made for the inter-site profitability posting control. Typically control type Site will be used in order to differentiate the inter-site profitability postings.
  4. There is also a simplified report available in Order Report, called the Inter-site Profitability report. When using the simplified report, only one site's profitability is displayed
  5. If there is a high volume of inventory transactions, the simplified report should not be used. A  Profit Center report generated with the report generator in IFS/Financials is the recommended report to use for thorough analysis

 

  1. Non-inventory parts will not generate any inter-site price postings.
  2. Corrective Inter-Site Profitability Transactions with Posting Types Used

System Event

Description

Debit

Credit

INTREV+

Increased internal revenue generated from corrective inter-site price postings

M160 - Internal Customer Claims

M159 - Internal Sales Revenue

INTREVR+

Increased internal revenue received, generated from corrective inter-site price postings

M162 - Internal Purchase Expenses

M161 - Internal Purchase Debts

INTREV-

Decreased internal revenue generated from corrective inter-site price postings

M159 - Internal Sales Revenue

M160 - Internal Customer Claims

INTREVR-

Decreased internal revenue received generated from corrective inter-site price postings

M161 - Internal Purchase Debts

M162 - Internal Purchase Expenses