Hi Hasan:
I was going thru Gl videos.. i don't see any explanation baout Intercompany accounting ..
like how to enable intercompany for a ledger and what's the purpose

Can you please xplain it
Thanks
Manav

Hi Hasan,

Yes, this would be something I also would be interested in.
Will you have vidoes on this subject in the VERY near future ?

Thank-you

The implementation of Intercompany Accounts is part part of the mandatory setup. As such, Hasan would not be able to fit in the Intercompany Segment as part of the Chart of Accounts, once the ledger has been created and put to use. Nonetheless, there is another way to capture the same accounting information by setting up some accounts. The only problem is that the number of those accounts become cumbersome as the number of "Balancing Segments" (Legal Entities) become gigger. Let see what Hasan would say about this!

Hi Gavrobere,

Yes, I can see that being a issue with the existing COA and LEDGER.
However, can we not create a quick and dirty new COA and LEDGER specifically for GL specific tasks/lessions, like intercompany, reval, translation, consolidation.. etc...

JUST a "crazy" thought...

Hi
That's what i requested earlier.
I completely agree with you. we should actually create one COA and Ledger fro GL lessons

You only create an Intercompany Segment if you want to capture which company is on the other side of the transaction. Yet there are other ways of capturing that information as well for example creating separate GL accounts for each pair of companies doing business.

Do we need to define an Intercompany segment in our chart of accounts?

It is not required to define an Intercompany Segment, but I would always recommend defining one. Even if you do not have a great deal of Intercompany activity at the moment, it is worth having one defined now as it is difficult to add one later if you grow and acquire companies or maybe expand operations into other countries or regions.

Do not define the same segment to be at the same time the balancing segment (aka Company Code) and the Intercompany segment, because in doing so, you will not get the benefits of Intercompany segment balancing

Keeping an extra segment in your chart of account structure "just in case" comes with a cost. The data entry takes longer (you can use tricks like defaulting the segment to a fix value etc). Processing takes some burden. Reports need to show extra segment as well (you can trim this segment out if need be).
One must keep a good balance between future use and the cost that users will pay now.

"Intercompany Segment" solution is scalable while "multiple accounts" solution is not.
Lets say your company does business with 100 other sister companies. Using "Intercompany Segment" method you need one account while using "multiple accounts" method you need 100 accounts.
I hope that clarifies the difference.

Of course, you can create another ledger with a COA comprising of an Intercompany Segment, if you so wish. However, I think Hasan could prepare a video to show how to create an Intercompany Segment, and its use in the business world, its impact when it comes to consolidate financial accounts of various companies within an organisation.

Hi Hasan:
I am not able to understand Intercompany concept in R12. I'd reallly appreciate if you can please create a Video expalaining intercompany segment concept.

Thanks

Yes I have plans to create videos on intercompany and intracompany concepts or R12. But first I will be addressing topics like mass allocations, consolidations, conversions, translations, and revaluations.
Hasan

Hasan, I know these videos take hell lot of energy and time. I respect your attitude for going step by step. I will wait for this Consolidations, Conversions, Translation, Revaluation and Intercompany topics. Regards

Hasan, I understand that these tutorials take hell lot of time. I respect your way to go step by step. WIll wait for your videos on MA, Consolidations, Conversions, Translations and Revaluation, Intercompany.
Regards