PURPOSE
-------
Global InterCompany System Setup Release 11i SCOPE & APPLICATION-----Financial consultant, Oralce General Ledger Users
Overview
--------
The Global Interompany System manages intercompany transactionsbetween multiple Subsidiaries within a Global Organization.The main advantage of using GIS is to manage intercompany transactions that occur between sets of books. It streamlines the transaction and saves time bypreventing unbalanced intercompany transactions.Unbalanced entries could occur if two subsidiaries enter the transactions for services that occurs between them, using different exchange rates or currencies GIS prevents this from occurring by requiring the sender and the receiver (the two subsidiaries) to approve the amount, exchange rate and date.Once the transaction is approved each subsidiary then transfers and posts the balanced transaction to its operating set of books .
Features
--------
Account Generation: Define Auto Accounting Rules that establish pre set rules to automaticallygenerate account code combinations for the sender /receiver distribution and clearing lines.
Security
--------
This is enabled by assigning a specific responsibility for each GIS subsidiary by the System Administrator. The GIS subsidiary name is entered in the profile option: Intercompany :Subsidiary Systemat the responsibility level.Currency-------- When the currency of two subsidiaries are different and they enter transactions in GIS, the currency is converted to the respective target set of books currency.
Currency
--------
When the currency of two subsidiaries are different and they enter transactions in GIS, the currency is converted to the respective target set of books currency.
Import of Intercompany transactions from outside sources
--------------------------------------------------------
GIS is flexible enough to include an open interface table to import andvalidate inter company transactions into the GIS system. The intercompanylines can be automatically generated according to the auto accounting rulesdefined for these transactions. Once they are uploaded successfully they can be viewed in the GIS Enter Intercompany Transactions window .
------------------------------------------------------------------
Implementation Scenario 1: GIS With a Corporate Chart Of Accounts
------------------------------------------------------------------
If corporate and all the subsidiaries in a Global company use the same standard chart of accounts in their respective set of books, then the same standard chart of accounts can be used to create one common Inter companySet of Books in Oracle General Ledger and this will be used within GIS by all the subsidiaries to enter transactions between each other, and also with thecorporate company.Each subsidiary is set up as a GIS subsidiary giving it a unique name and the corresponding balancing segment value to enter transactions using the same Intercompany Set of books in GIS Example:
1. Create a set of books named 'Intercompany Set of Books' in Oracle General ledger. Assign a responsibility to this set of books. If you are not using the MRC feature of Oracle General Ledger when creating this set of books the option 'Neither' should be checked meaning this is neither a Primary or Reporting set of books .
2. Define this as a Subsidiary in GIS with Parent privileges, call it 'Corporate Intercompany'. Note for the GIS system every company should be defined as a subsidiary. Assign the following values in the 'Define Subsidiary Window'.
Subsidiary Corporate Intercompany
Chart of Accounts Standard Chart of accounts
Calendar Standard calendar
Currency USD
Company 01 (balancing segment value)
Repeat step two for subsidiary 2, subsidiary 3, subsidiary 4 and so on with different Name, Currency and a unique balancing segment value for the company field .
3. In the subsidiaries set of books field enter the respective standard set of books name for each of these subsidiaries . This is the set of books to which the transactions from GIS will be transferred once they are balanced and approved . The set of books entered here can be on the same local instance of Oracle system where the GIS is accessed or a remote Oracle instance (Physically on a another server or in a different country, also a non Oracle General Ledger system)
----------------------------------------------------------------------
Implementations Scenario 2: GIS without a Corporate Chart of Accounts
----------------------------------------------------------------------
This set up scenario can be used where all the given subsidiaries of a Global company and the Corporate company do NOT use the same standard chart of accountsIn this case each subsidiary may be at a different location,using different set of books and chart of accounts and different calendars .To facilitate intercompany transactions within GIS each of these Subsidiarieshave to have an additional set of books defined for the purpose of using it with the GIS system, which is separate and specific to each subsidiary.This example requires 6 set of books defined in total.Three of which are for GIS purpose defined in the instance where GIS is used andthe other three are respective standard accounting set of books and can be local or remote to the GIS instance.
Examples
--------
1.US Intercompany :Intercompany set of books (for entering GIS transactions)
2.US Corporate Office :US Set of books (GIS transactions get transferred to this SOB)3.Japan Intercompany :Japan intercompany set of books (for entering GIS transactions)
4.Japan Subsidiary :Japan Set of books (GIS transactions get transferred to this SOB)5.UK Intercompany :UK Intercompany books (for entering GIS transactions )
6.UK Subsidiary(remote) :UK Set of books (transactions get transferred to this SOB)
When a transaction is entered in GIS by the Japan Subsidiary for the UK subsidiary, the Japan subsidiary responsibility enters the transaction in GIS Japan intercompany SOB. The UK subsidiary responsibility approves this transaction in the GIS UK Intercompany SOB. The corporate responsibility OR the individual subsidiaryresponsibilities can run the "Transfer Intercompany Transactions " program totransfer the transactions to their corresponding set of books, which in this case would be 'Japan Subsidiary' set of books and 'UK Subsidiary(remote)' set of books'.
