Inter-Organization
Transfers
You can
transfer items directly from one organization to another, or you can transfer
items through intransit inventory. Intransit inventory represents inventory
items that has not yet arrived at the receiving organization.
Elemental
Cost Visibility Option
Note:
This functionality will be supported in a future release that includes the
Oracle Order Management product.
You have
the option to set elemental cost visibility during inter-organization transfers
to preserve the sending organization's elemental costs or to summarize all
elemental costs into the material cost element. This option is enabled by the
Elemental Visibility Enabled check box on the Main tab in the Shipping Networks
window. This option is available for each line in the shipping network,
regardless of direction. See
Note: The
correct option for elemental cost visibility must be set at the time that the
transaction is costed, not at the time the transaction occurs.
Using
Intransit Inventory
You can
move items from the shipping organization to intransit inventory using the
Inter-organization Transfer window. You can use the Receipts window to move
items from intransit inventory to the receiving organization.
Direct
Inter-Organization Transfer
You use
the Inter-organization Transfer window for direct transfers. When your the
inter-organization relationship is set to direct transfer in the Shipping
Networks window, an issue and receipt transaction are performed in one step. In
addition, each organization may be in a different set of books and even in a
different currency.
Shipment
Transactions (Intransit transfer only)
The Free
on Board (FOB) point influences the accounting entries generated for the
shipment to intransit inventory. The FOB point is determined by how the
inter-organization shipping network in defined in the Shipping Networks window.
Shipments to intransit inventory create the following accounting entries:
When the
FOB point is receipt:
Account Organization
Debit Credit
Intransit
Inventory accounts Sending XX
Organization
Valuation accounts Sending XX
When the
FOB point is shipment:
Account Organization
Debit Credit
Inter-Organization
Receivable Sending XX
Organization
Valuation accounts Sending XX
Intransit
Inventory Material account
Receiving XX
Inter-Organization
Payable Receiving XX
Receipt
Transaction (Intransit transfer only)
The FOB
point influences the accounting entries generated for the shipment to intransit
inventory. The FOB point is determined by how the inter-organization shipping
network in defined in the Shipping Networks window. Receipts from intransit
inventory create the following accounting entries:
When the
FOB point is receipt:
Account Organization
Debit Credit
Inter-Organization
Receivable Sending XX
Intransit
Inventory accounts Sending XX
Org.
Inventory Material account
Receiving XX
Inter-Organization
Payable Receiving XX
When the
FOB point is shipment:
Account Organization
Debit Credit
Org.
Inventory Material account
Receiving XX
Intransit
Inventory Material account
Receiving XX
In
addition to accounting for the movement of the items, these transactions also
update the inter-organization receivable and payable accounts. These
inter-organization clearing accounts represent inter-organization receivables
and payables for the respective shipping and receiving organizations.
Material
Overhead and Inter-Organization Transfers
If your
item has material overhead(s), you can earn material overhead in the receiving
organization as part of the receipt transaction.
Account Debit
Credit
Organization
Material Overhead account XX
Material Overhead Absorption account XX
Direct
Inter-Organization Transfer (Direct transfer only)
You use
the Inter-organization Transfer window for direct transfers. The accounting
entries created are as follows:
Account Organization
Debit Credit
Inter-Organization
Receivable Sending XX
Org.
Inventory Valuation accounts
Sending XX
Org.
Inventory Valuation accounts
Receiving XX
Inter-Organization
Payable Receiving XX
Freight
and Transfer Charges
The FOB
point changes the accounting for freight. With FOB is receipt, freight is
accrued on the receipt transaction by the sending organization. With FOB is
shipment, freight is accrued on the shipment transaction by the receiving
organization. For direct transfers, the receipt and shipment transaction occur
at the same time.
When the
FOB point is receipt, the transfer creates the following accounting entries for
freight and transfer charges:
Account Organization
Debit Credit
Inter-Organization
Receivable Sending XX
Freight
Expense account Sending XX
Inter-Organization
Receivable Sending XX
Inter-Org.
Transfer Credit Sending XX
Org.
Material account Receiving XX
Inter-Organization
Payable Receiving XX
For the
receiving organization, the inter-organization payable account is increased for
freight and transfer charge. These charges are included in the organization
material account.
When the
FOB point is shipment, the transfer creates the following accounting entries
for freight and transfer charges:
Account Organization
Debit Credit
Inter-Organization
Receivable Sending XX
Inter-Org.
Transfer Credit Sending XX
Intransit
Inventory Material account
Receiving XX
Freight
Expense account Receiving XX
Inter-Organization
Payable Receiving XX
Intransit
includes both the freight and transfer charges. Inter-organization payable is
only increased for the transfer charge.
Expense
Subinventories and Expense Inventory Items
When you
receive an inter-organization transfer into an expense location or receive an
expense inventory item, you have expensed the item and cannot directly issue
it. The system assumes the item is consumed at the expense location.
Using the
direct or intransit method, you can receive items to an expense subinventory or
receive an expense item. When you receive to expense locations or receive
expense items, the subinventory expense account is debited for the receiving
organization, instead of the organization material account. The subinventory
expense account is charged the total transaction value from the other
organization.
Inter-Organization
Transfers and Sets of Books
The
Inter-Organization Direct Transfer transaction also supports transfers from any
set of books, even if the currency is different. However, you cannot use the
Inter-Organization Intransit transaction with multiple sets of books. These
transactions require Receipt transactions in Purchasing. Purchasing only
supports one set of books. To perform an inter-organization intransit transfer
from one set of books to another, you need to perform a combination of two
transactions: a direct transfer and an intransit transfer.
