SD / O2Cadvanced

SD Billing Part 7: Intercompany Billing and Internal Revenue/Cost Flow

Key takeaway

How intercompany sales are billed: the customer invoice from the selling company code, the intercompany invoice (IV) from the delivering company code, internal customer per sales organization, intercompany pricing (PI01/IV01), account determination, and posting the payable in the ordering company (automatic via IDoc or manual).

Explanation

📌 KEY POINTS
✅ Intercompany sales: the selling company code invoices the customer (F2), the delivering company code invoices the selling company (IV).
✅ The selling sales org is represented as an internal customer in the delivering company (assigned per sales organization).
✅ Intercompany price: condition PI01 (statistical in the customer invoice, used as IV01 in the intercompany invoice).
✅ The payable in the selling company is posted via incoming invoice (often automated with EDI/IDoc INVOIC).
⚠️ Missing intercompany billing leaves the delivering company with cost of goods but no revenue.

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▶ WHERE WE ARE
Part 6 covered billing plans. Now billing across company codes.

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▶ 1. THE SCENARIO

Sales order in sales org of company A; delivering plant belongs to company B.
Delivery and PGI in B's plant.
Customer invoice (F2) from A; intercompany invoice (IV) from B to A.

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▶ 2. CONFIGURATION

Plant assigned to A's sales org/channel (OVX6) → intercompany possible.
Internal customer number per sales org (intercompany settings).
Order type → intercompany billing type IV.
Pricing: PI01 (intercompany price) in the customer procedure; IV01 in intercompany procedure.

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▶ 3. BILLING

F2 to customer via VF04 in A.
IV via VF04 in B (intercompany billing due list).
VKOA: intercompany revenue accounts for the internal customer's account assignment group.

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▶ 4. THE SELLING COMPANY'S PAYABLE

Manual MIRO or automatic via IDoc INVOIC (output from IV).
Cost in A = intercompany price.

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▶ 5. RECONCILIATION

Intercompany receivables/payables reconciled monthly.
Transfer pricing documentation.

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▶ STEP BY STEP

Assign a foreign plant to the sales org.
Maintain internal customer and PI01 records.
Create order, delivery, PGI in the delivering plant.
Bill customer (F2) and intercompany (IV); post the payable.

✅ CHECKPOINT: both company codes show revenue and cost with correct intercompany amounts.

Code example

ABAP Code

===== STEP 1: setup =====OVX6 : sales org 1000 / channel 10 → plant 2000 (company code 2000)Intercompany billing settings: order type ZOR → IV | sales org 1000 → internal customer IC1000 (in company 2000)Pricing: PI01 intercompany price (statistical in customer invoice) → IV01 in intercompany pricing ===== STEP 2: documents =====Company 1000: F2 to customer (Dr customer, Cr revenue) | vendor invoice from 2000 (Dr cost, Cr vendor)Company 2000: PGI (Dr COGS, Cr inventory) | IV to IC1000 (Dr IC receivable, Cr IC revenue) ===== STEP 3: automation =====IV output → IDoc INVOIC → incoming invoice in 1000 (EDI settings for intercompany)

Real project scenario

A customer invoice posted correctly, but the supplying company showed inventory reductions without revenue for months. Intercompany billing documents were due but nobody ran VF04 in the delivering company, because the process owner assumed it was automatic. A scheduled intercompany billing job, IDoc-based vendor invoice posting in the selling company and a monthly intercompany reconciliation closed the gap.

Common mistakes

Assuming intercompany billing runs automatically.
Missing internal customer per sales org.
No PI01 records, leading to zero intercompany prices.
Manual vendor invoices not reconciled.
Ignoring transfer pricing documentation.

Best practices

Schedule intercompany billing jobs.
Maintain intercompany prices centrally.
Automate vendor invoice posting where possible.
Reconcile IC balances monthly.
Test both company codes end to end.

Interview angle

Questions: "How does intercompany billing work?", "What is PI01?", "How is the payable posted in the selling company?"
Strong answer: F2 from selling company, IV from delivering company to internal customer; plant assignment, internal customer per sales org, PI01/IV01 pricing, VKOA; payable via MIRO or IDoc INVOIC; reconciliation.

Practice this lesson

Quick check

1. Which condition represents the intercompany price in standard intercompany billing?

2. The customer invoice posted in the selling company, but the delivering company shows COGS without revenue. What is missing?

3. In an intercompany sales scenario where the delivering plant belongs to a different company code than the selling company code, which billing type is used for the invoice sent from the delivering company to the selling company?

Interview questions

1. Explain the full document and posting flow of an intercompany sale where company 1000 sells and company 2000 delivers.

Answer it in your own words first, then compare.

2. A retail distribution client's intercompany invoices are created, but the selling companies never post the corresponding payables on time. How do you automate and control it?

Answer it in your own words first, then compare.

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Reference-verified: the steps are checked against official SAP documentation and tutorials, and object and field names in the sample code are checked for consistency. The code has not been compiled or run on an SAP system by ERPClimb. Syntax marked release-dependent varies by SAP release, so check it in your own system.