SAP S/4HANA Intercompany Service Charging Solution

Since many companies, large and small, are often divided into multiple legally independent entities with complex delivery and service relationships, Intercompany Charging remains an ongoing challenge. Generally, Intercompany Charging presents the following challenges:

• The provided intercompany services must be trackable and invoiced according to the actual costs incurred;

• Legal conditions (e.g. regarding profit shifting) must be met;

• Internal Service Level Agreements must be considered;

• In international contexts, exchange rate issues come into play.

• In this course, I share best-practices for Intercompany Charging of services among separate legal units of an organisation. This is based on a customer case, in which we helped our customer improving their Intercompany Service Charging process.

• From a general Business Management perspective, Intercompany Charging can be done for various cost types in many different business cases. Our customer, however, did the intercompany charging to allocate costs of provided services, solving tasks across the different affiliates in their international group.

  As such, the following cost types were subject to possible charging within our customer’s group:

  • general administrative costs

  • marketing costs

  • logistical processing costs

  • personnel costs

  • research and development costs

  • production waste costs

  The organisational units involved were the different so-called Shared Service Centres, as well as corporate units operating outwardly.

  This business process consisted of determining services provided, assessing their value and issuing the corresponding invoices. Particular problems arose from currency conversion because the various organisational units were located in different currency zones.

  Our customer asked us to find an IT solution, compatible with their SAP ERP system, to automate this process as much as possible. Additionally, the users still needed to be able to control the process and, where necessary, take corrective action.

We quickly realised that many of the above-mentioned requirements were already supported in SAP ERP. The best solution for these specific needs was SAP Resource-Related InterCompany Billing (SAP RRICB). This tool enables Intercompany Charging of services provided, particularly at month-end closing. For this, it uses the CO transfer postings that are done between different company codes and that take place during the current month.

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