How to set up Intercompany Process in SAP

set up Intercompany Process in SAP

Sometimes goods or services are purchased from a related concern within the same organization. Thus, this translates to one division of a parent company purchasing from another one to fulfil its sales order. Hence the sales order of former becomes purchase order for the second.

Example: A  multi-national company ABC Limited manufactures and distributes laptops. There is a single plant in Japan which is  assigned to company code of Japan. The sales orders are received in various countries and this should automatically raise a PO to Japan. So, if any order is received from end customer in USA, an automatic PO must be raised from USA company code to Japan.

This article describes the steps in which you can set up an automatic Intercompany Process in SAP.

1. Create headquarters as a vendor

Using XK01 create the headquarters as a vendor in the purchase organization of the buying company code. In above example, this is the USA entity.

create headquarters as a vendor to setup intercompany process in sap

2. Maintain the purchase order information at Sales Organization Level

For the entity which is placing order to the headquarters, maintain the purchase information as shown below:

maintain the purchase order information at sales organization level in sap

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3. Click the automatic PO for item category

Navigate to the menu node of the SPRO and mark the Automatic PO checkbox for the respective item category.

click automatic po for item category for intercompany process in SAP

how to create intercompany process in sap

4. Maintain purchase info records

Maintain the purchase info records as shown below:

maintain purchase information record for intercompany process in sap

  • Effect

Whenever a new sales order is raised in the buying organization (in above example USA), it automatically creates a purchase order to the headquarter organization (Japan).

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Shailendu Verma

Shailendu is the founder of Veon Consulting Pvt Limited. He has done SAP consulting for top companies like Boots Plc, Proctor & Gamble and Daimler AG. Veon is a solution partner of APPSeCONNECT.

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