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INV Intercompany Invoice Reconciliation - Case Study & Technical Analysis

Executive Summary

The INV Intercompany Invoice Reconciliation report is a complex financial reconciliation tool designed to align the three legs of an intercompany transaction:

  1. Inventory: The physical shipment from Org A to Org B.
  2. Receivables (AR): The invoice Org A sends to Org B.
  3. Payables (AP): The invoice Org B receives from Org A.

Discrepancies between these three can lead to significant accounting issues and intercompany elimination problems during financial consolidation.

Business Use Cases

  • Month-End Reconciliation: The primary tool for ensuring that Intercompany AR matches Intercompany AP.
  • Transfer Pricing Validation: Verifies that the price charged on the AR invoice matches the expected transfer price calculated by the shipping engine.
  • Accrual Auditing: Ensures that goods received (Inventory) have been invoiced (AP), preventing "Received Not Invoiced" (RNI) accrual errors.

Technical Analysis

Core Tables

  • MTL_MATERIAL_TRANSACTIONS: The source of truth for the physical movement (Transfer Type = Intercompany).
  • RA_CUSTOMER_TRX_ALL / RA_CUSTOMER_TRX_LINES_ALL: The AR invoice data.
  • AP_INVOICES_ALL / AP_INVOICE_LINES_ALL: The AP invoice data.
  • MTL_SYSTEM_ITEMS_B: Item details.

Key Joins & Logic

  • The "Logical" Link: Linking these transactions is notoriously difficult in Oracle EBS. The report typically uses a combination of:
    • TRX_SOURCE_LINE_ID (linking AR to Inventory).
    • Purchase Order references (linking AP to Inventory/PO).
    • Global Intercompany System (GIS) references if used.
  • Variance Calculation: Compares Quantity and Amount across the three sources (Inv vs AR, AR vs AP).

Key Parameters

  • Shipping/Receiving Org: The pair of organizations to analyze.
  • Date Range: Shipment or Invoice date.
  • Variance Only: Filters to show only problem records.