Product Information
Advanced Intercompany Sales & Stock Transfer in SAP S/4HANA Cloud
Last updated: 07th December 2022
Today, I would like to introduce you to an amazing solution that you as our customer have desired for a long time, the Advanced Intercompany Processes. If you cannot wait, then check out the magic in this system demo here already.
Table of content (for quick access, just click on one of the business area links):
Overview
Business Reasons for Intercompany Processes
New Best Practice Processes
Process Activation and Restrictions
Outlook
Intercompany Sales
Classic Intercompany Sales – Single Level / Single System
Advanced Intercompany Sales – Single Level / Single System
System Demo – Advanced Intercompany Sales
Intercompany Stock Transfer
Classic Intercompany Stock Transfer – Single Level / Single System
Advanced Intercompany Stock Transfer – Single Level / Single System
Value Chain Monitoring Framework (VCM)
Overview
Business Reasons for Intercompany Processes
A split between the entities handling sales and production is often needed for various reasons. This leads to the need to support Intercompany Sales:
- Separate risks between domestic and international sales and production
- Easier local and regional sales
- Tax advantages
- Safeguarding of brand
- …
Intercompany supply chains are spread across various localizations and lead to the need of Intercompany Stock Transfer between group legal entities to run company value chains
- Production plants close to raw materials
- Leverage local advantages on company group level (labor costs, free trade, and industry zones, …)
- Tax advantages
- …
Most SAP customer companies with two or more company codes need Intercompany Processes.
Intercompany processes are a must for:
- All manufacturing industries
- All companies running on a dedicated internal supply chain
The Advanced Intercompany (ICO) processes
- Supports first E2E SAP standard processes for ICO
- Supports process automation
- Reduces TCO for customers as this standard process relieves them of custom developments, maintenance and upgrades
New Best Practice Processes
With the continuous delivery 2202.3 for SAP S/4HANA Cloud we are launching two new scope items for the Advanced Intercompany processes:
Process Activation and Restrictions
The Advanced Intercompany Sales process is per default disabled for the standard document types and item categories.
To activate the Advanced Intercompany Sales process, specific configurations must be enabled through an expert configuration request. Some configurations have to be done by the customer.
For further details read the Set-Up Instructions document that you will find in the details section of the scope item Advanced Intercompany Sales (5D2).
Currently the process can be activated for item categories TAN and CBXN.
The release restrictions for Advanced Intercompany Sales are described in SAP note 3192584.
Also the scope item Advanced Intercompany Stock Transfer (5HP) provide a Set-Up Instructions document.
Outlook
It is planned to deliver the Advanced Intercompany processes also in SAP S/4HANA on premise with upcoming releases. So this blog post is relevant for both deployment types, SAP S/4HANA Cloud, and SAP S/4HANA on premise.
The first launch of the Advanced Intercompany processes covers the scenario for Single Level / Single System that is explained below. In addition, it is planned to extend the Advanced Intercompany processes also to cover the scenario for Multi Level / Single System with one or more additional Intermediate Companies between the Selling Company and the Delivering Company. This is a subject to be changed.
Intercompany Sales
Classic Intercompany Sales – Single Level / Single System
First let us have a look on the classic intercompany sales process. For example, a local sales office sells to a customer and the goods are delivered from a plant, which is assigned to another company code, directly to the customer as shown in the next figure.
Starting point of the process is the purchase order of an US customer (step 1) that triggers the creation of a sales order in the US selling company (step 2). The US selling company triggers directly the outbound delivery in the German delivery company (step 3). The US customer receives the goods directly from the physical warehouse in Germany, but the invoice is issued by the US selling company. During the process no valuated stock is created in the US selling company and business documents like the purchase and sales order between the affiliated companies are missing.
Fig. 1: Classic Intercompany Sales – Single Level / Single System
Advanced Intercompany Sales – Single Level / Single System
The process for advanced intercompany sales provides functions that allow two affiliated companies to participate in a single intercompany process, such as the following:
- A local sales office sells to a customer. The producing company delivers the goods directly to the customer.
- A local sales organization sells to a customer. A central warehouse delivers the goods.
A standard sales order can initiate the entire process, which is integrated into the value chain monitoring framework. To orchestrate and monitor each process step, this business processes makes use of the Monitor Value Chains app.
Fig. 2: Advanced Intercompany Sales – Single Level / Single System
What are the key features of the Advanced Intercompany Sales process?
It is a seamless E2E process that is highly automated and embedded into the following areas:
- Product Compliance
- Trade Compliance
- Profitability Reporting across legal entities
- Support of IFRS 15 compliant revenue recognition and COGS postings
- Product Costing
- Group Reporting / Consolidation
Changes in customer-facing sales order are possible and automatically managed by the system.
Valuated Stock in Transit in the Selling Company allows seamless change of control between affiliates and customer.
Purchase Order in the Selling Company enables landed cost in product costing.
E2E value chain and process monitor allows issue detection and posting services.
System Demo – Advanced Intercompany Sales
My colleague Markus Oertelt has recorded the Advanced Intercompany Sales process for you. Watch the next video! The system demo is structured into the following sections:
| Video time / min | Topic |
| 00:10 | How to create a sales order? |
| 02:09 | How to create a sales order with SAP Fiori? |
| 03:43 | How to monitor your value chains after the sales order is created? |
| 04:47 | How to check automatic creation of intercompany purchase and sales order? |
| 05:56 | How to create delivery documents? |
| 07:46 | How to check transfer control of goods? |
| 08:16 | How to pick the delivery goods? |
| 09:37 | How to post goods issue? |
| 10:39 | How to create billing document? |
| 12:08 | How to monitor your value chains? |
Video: Advanced Intercompany Sales (system demo without voice demo)
Intercompany Stock Transfer
In analogy to the chapter above, let me also briefly compare the process of Classic Intercompany Stock Transfer and Advanced Intercompany Stock Transfer with the help of process flow diagrams:
Classic Intercompany Stock Transfer – Single Level / Single System
Fig. 4: Classic Intercompany Stock Transfer Process – Single Level / Single System
Advanced Intercompany Stock Transfer – Single Level / Single System
Fig. 5: Advanced Intercompany Stock Transfer Process – Single Level / Single System
Value Chain Monitoring Framework (VCM)
The Value Chain Monitoring Framework (VCM) is a generic framework for designing, running and monitoring business processes within SAP S/4HANA that supports pre-configured SAP standard E2E processes. The benefits are:
- Increased end-to-end process visibility, efficiency, and collaboration
- Issue detection providing posting services
- Tightly integrated into relevant business applications
Fig. 6: Value Chain Monitoring Framework
The Monitor Value Chains app enables you to track all steps of the Advanced Intercompany Sales, Advanced Intercompany Stock Transfer, and Sell from Stock with Valuated Stock in Transit (VSiT) business processes. This app provides you with a detailed overview of all relevant steps and documents in these processes. In addition, it directly integrates these processes with other business applications. The business benefits are increased transparency, efficiency, and cross-team collaboration.
Fig. 7: Monitor Value Chains app
Thanks for reading this blog. Stay tuned!
[Update 20221207]: Also check out the recording of the SAP Community call with my colleague Bernd Strecker (SAP Product Manager for Advanced Intercompany Sales). First, Bernd explains Advanced Intercompany Sales in SAP S/4HANA via his slide deck that is available here. I would especially like to draw your attention to the topic “Planned Features” at 28:46 min with an interesting outlook. The “Q&A” that answers a lot of interesting questions starts at 30:30 min. At 40:57 min Bernd shows a live system demo and finally at 49:13 min he answers some more questions.
For more information on Advanced Intercompany Sales, check out the detailed description here.
For more information on SAP S/4HANA, check out the following links:
Hello,
Thanks for bringing this new concept.
Great to see this Monitoring of Value Chains oppurtunity along with the business process.
Is there any planning about a scneraio in which multi systems involved for an intercompany case by chance?
e.g Distributor - Plant - Selling Entity - After Sales Service ... spread over different landscapes
Hello Franck,
Yes, as mentioned in the blog it is planned to extend the Advanced Intercompany processes also to cover the scenario for Multi Level / Single System with one or more additional Intermediate Companies between the Selling Company and the Delivering Company. This is a subject to be changed.
Best regards,
Gerhard
Thank you Gehard for sharing this new functionality.
Could you please share the process details of the Multi Level / Single System scenario.
Regards,
Vinaysagar
Hi there,
is there any update in terms of the Multi-Level / Multi-System approach?
Hi Gerhard ,
Really a Nice Concept and thanks for Sharing.
Is this also integrated with GTS Module as we have faced many issues during Import / Export
GTS Checks .
Thanks and Regards
K.Nadesh Kumar
Hi Nadesh,
Best regards,
Gerhard
Hi Gerhard,
thank you very much for the overview!
Do I understand it correctly that the outbound delivery in the supplying plant is created with reference to the IC STO and on top referenced in the document flow of the IC SD Order in the supplying plant (dotted line)?
Because this would be a difference to the on premise IC STO process with a IC sales order created via IDoc where the outbound delivery is created based on the sales order instead of the purchase order,
Keep up the good work!
Tom
Hi Tom,
Yes, the outbound delivery is created with reference to the IC Purchase Order (we’re using purchase orders and not stock transfer orders).
In the document flow we show the reference to the IC Purchase Order, only. We have drawn a dotted line from the sales order to the outbound delivery as the FI data being used in the outbound delivery is copied from the sales order.
The E2E document flow is shown nicely in the Value Chain Monitor app.
The approach of Advanced ICo Sales differs significantly from the approach where the delivery is created with reference to the sales order. In Advanced ICO Sales the IC purchase order is deeply integrated into logistics, (e.g. MRP, ATP, Transportation Mgt, Product Compliance, Trade Compliance) and on the other hand the Sales Order is used for commercial, tax and FI integration reasons mainly.
Best regards,
Gerhard
Hi Gerhard,
thank you very much for the clarification!
Are you planning 'transfer' this functionality to on-premise with one of the next releases? Would love to get my hands on this process.
Best regards
Tom
Hi Tom,
Yes, we plan to make this solution also available with SAP S/4HANA 2022 OP (on-premise) and 2022 PCE (private cloud edition) release.
Best regards,
Gerhard
Hello Gerhard,
Thanks for the clear explanation and demo.
As stated "Currently the process can be activated for item categories TAN and CBXN.", any ideas if this will be extended in the future for other itemcategories ?
Thanks and Regards,
Joos
Hello Joos,
In future releases we plan to support more scenarios like order related customer invoicing, sales bill-of-materials, WBS elements, make-to-order, configurable materials etc.
Best regards,
Gerhard
Hello Gerhard,
great solution. Waiting for multi level processes, to be able to design direct delivery processes with more than 2 company codes.
Keep Going,
Olaf
Hello Olaf,
Thank you very much for your nice feedback. Yes, we keep going and working on the multi level processes.
Best regards,
Gerhard
Blog updated:
Today I have added the following sentence at the end of the blog post:
For more information on Advanced Intercompany Sales, check out the detailed description here.
The given link guides you to the Stay Current Material about Advanced Intercompany Sales that provides a detailed process flow in its appendix.
Hallo Gerhard,
thanks a lot for adding the detailed description of the Advanced Intercompany Sales process. I just have a short question refer to slide 55 where it is said that the invoice to the external customer is now independent from the intercompany invoice. Therefore now it will be possible to create external customer invoice independently from the intercompany invoice? So no need anymore to wait for the creation of the intercompany invoice before customer invoice?
For your help thanks a lot.
Best regards
Timo
Hi Timo,
Regarding your question 'So no need anymore to wait for the creation of the intercompany invoice before customer invoice?'
-> Yes, that’s correct. Intercompany invoice can be created before the customer invoice has been created.
Best regards,
Gerhard
Hi Gerhard,
thanks a lot for your great support and the really good answer. This is indeed a great Innovation for one of our customers working intensively with intercompany sales processes.
So then we can also be rid of the MM-SD connection via ALE in one ERP approach😉
Great Solution!
Hi Gerhard,
Very nice blog! thanks for sharing!! do you know if this best practice will be released as well on-premise?
Best regards,
Ivan
Hi Ivan,
The Scope Item 5D2 will be shipped to S/4HANA on premise, too. Additionally, we will provide a set-up guide for 000 customizing based systems.
The Scope Item 5HP won’t be shipped to S/4HANA on premise. But we will provide a set-up guide for 000 customizing based systems.
Best regards,
Gerhard
Fantastic! thanks for sharing the scope Items. I will be waiting for the set-up guide once available 🙂
Hi Gerhard,
thank you very much for this interesting post.
Is there any quidance how this process will look like with integration to other ECC systems? Example: selling company in S/4 HANA and delivering company in ECC, selling company in ECC and delivering company in S/4 HANA?
Is the activation of advanced Intercompany enabling usage of only this process for IC?
Best regards,
Aga
Hi Aga,
Advanced ICo Sales is a one system scenario only. Both companies need to run in the same client.
SAP is working on 2-tier scenarios (SAP S/4HANA Cloud for Hybrid Deployment), too. More information on 2-tier scenarios can be found via this link.
Best regards,
Gerhard
Hello Gerhard,
In Display Item Details. Choose Shipping tab, the field Transit Plant is not found. Is there a problem with our scope item activation or configuration? Scop item 5D2 is activated in our system.Please give me some advice.
Thanks,
Lingling
Hello Lingling,
Unfortunately a remote diagnosis based on your description is not possible.
Yes, something in your configuration or activation is missing. Please follow all steps being listed in the set-up instruction that the scope item provides:
https://rapid.sap.com/bp/#/browse/scopeitems/5D2
Best regards,
Gerhard
Hello Gerhard,
Thanks for your reply, We will check the settings and submit the ticket if it still fails.
Best regards,
Lingling
Great Blog!
Thanks for sharing.
Thank you very much for your nice feedback.
Hello Gerhard,
how does the sales order confirmation take place in the sales plant 1710 in the advanced intercompany sales scenario?
Is it just based on the purchase requistion / purchase order scheduling like for sales orders with direct purchase requisitions / purchase orders in plant 1710?
Or somehow based on the confirmation of the second sales order so even maybe based on an ATP check carried out in the production / issuing plant 1010?
And did I understand it well from the comments?
The scenario is not applicable at all at the moment for MTO and neither for configurable materials (even if the two sales order item categories would be adjusted in customizing for the handling of a MTO scenario or a KMAT scenario)?
Best regards
Adam
Hello Adam,
ATP check is executed in the Sales Order in the Selling Company (1710) only. This sales order has 1010 as the “normal” plant on item level. Additionally, it stores the transit plant (1710) in a new field on sales order item level.
Confirmed quantities and confirmed dates are transferred to the purchase order in the selling company and to the sales order in the delivering company (1010).
As a result, the sales order in the delivering company will always reflect what has been confirmed in the sales order in the selling company.
The current version of Advanced ICo Sales is enabled for a limited number of scenarios, in particular sell-from-stock, serial numbers, batches including batch splits and free-of-charge items with invoice relevance.
Of course, we plan to support more scenarios in future, including make-to-order with or without variant configuration. Make-to-order with variant configuration is not scheduled yet and therefore not available on SAP’s roadmap.
Trying to use Advanced ICo Sales for variant configurable materials would not run consistently end-to-end. Significant enhancements are necessary to support it.
Best regards,
Gerhard
Hello Gerhard,
thank you very much for your detailed answer.
As I know my SAP customers they would like to combine your advanced Intercompany sales scenario in future with also a more sophisticated availability check in the deilvering company / issuing plant 1010, so with advanced ATP means like supply-based confirmation (SBC) for example.
Is there anything planned already to combine such ATP methods in aATP with advanced intercompany sales?
Thank you very much in advance.
Best regards
Adam
Hello Adam,
The sales order in the selling company is using aATP to determine the delivering plant. The sales order item will take over this plant. Afterwards the sales order processing checks if this plant belongs to a different company code (compared to the company code of the sales organization). If it’s an intercompany plant and if advanced intercompany sales is active the sales order will trigger automatically the execution of advanced intercompany sales by calling the value chain monitoring framework.
If aATP will execute supply-based confirmation (SBC) is independent if the used plant is an intracompany or an intercompany plant.
In some scenarios aATP will create subitems in the sales order (delivery is split between 2 or more plants). Advanced intercompany sales is not enabled for subitems in the moment. Therefore, subitems being created by aATP won’t trigger advanced intercompany sales and will run as classic intercompany sales.
Best regards,
Gerhard
I wanted to ask, how does SAP handle the changes in the documents? If we change anything in the selling Sales Org, does it immediatelly reflect in the sales order in the supplying plant? Is there any syncrhonisation of data in the other direction - if supplying plant changes the confirmed quantity for example?
Can the process be used with configurable materials?
KR,
Julija
Hello Julija,
Here are the answers:
--> Answer: Relevant changes in SO2 are automatically transferred to PO3 and SO4. The other direction is not supported (and from SAP’s view not necessary).
Only SO2 is integrated into the delivering plant, this includes requested and confirmed quantities.
PO3 and SO4 are used for commercial reason or FI reason, logistically they are not relevant (with the exception that PO3 executes the import compliance check).
SO2 will executes the ATP check directly in the delivering plant. Therefore it makes no sense to execute a second ATP check in SO4.
Backorder processing in the delivering plant will directly change the confirmed quantities of SO2. This change will be copied automatically into PO3 and SO4.
Best regards,
Gerhard
Hey there,
is my understanding correct that the "Advanced Intercompany Sales" Process is primarily used for stock-related scenarios.
How about Services?
Example Business Use Case:
Company A has different legal entities which are structured in separate company codes. There are cross-company code transactions between those legal entities.
Can we use "Advanced Intercompany Sales"?
Thanks in advance for clarification!
Hello Ankit,
Advanced Intercompany Sales supports logistical materials, only.
Services are not part of the supported scope.
The release restrictions for Advanced Intercompany Sales are described in SAP note 3192584.
Best regards,
Gerhard
Hello Gerhard,
many thanks for the quick and clear clarification.
By chance, do you have any experience or advise for another solution (on-premise) for service materials?
Best regards,
Ankit
Hi Ankit
https://rapid.sap.com/bp/scopeitems/4AN is delared as Cloud item, but the functionality and Programms and customizing to be used is also available onPrem and in private cloud. You have to do you own customizing to enable this process.
You can find additional information here: https://help.sap.com/docs/SAP_S4HANA_ON-PREMISE/7b24a64d9d0941bda1afa753263d9e39/148db6535fe6b74ce10000000a174cb4.html?locale=en-US
Regards
Rauno
PS: our company is specialized on these type of processes. Please contact me, if you need further advice
Hi Rauno, thank you very much. Let me check this website. I appreciate your help!
Hi Ankit,
You may check the scope item 4AN or 53Y. Hope either scope item fits with your sample.
https://rapid.sap.com/bp/scopeitems/4AN
https://rapid.sap.com/bp/scopeitems/53Y
Best,
Robert
Thank you, Robert!
contentwise both of them look interesting but I understand they are not available on premise, right?
The customer needs an on-premise solution.
Hi Ankit,
Yes, unfortunately those two scope items are not available for on premise solution.
Best,
Robert
Hi Gerhard,
Thanks for this blog.
I am doing the set up in S4 2021 on-premise version, but i am not able to add value chain config to allow order type to process advance intercompany billing.
Is it solution available only for S4 2022?
Could you please provide the insight?
Regards
Ashish Arora
Hi Ashish,
Advanced Intercompany Sales & Stock Transfer was delivered first in SAP S/4HANA Cloud, public edition with the 2202.3 release in May 2022.
Since October 2022 the solution is also available with SAP S/4HANA 2022 OP (on-premise) release, but it is not available in prior releases.
Best regards,
Gerhard
Great blog. Q&A is equally helpful as well 🙂
Very interesting capability in S4H. Today we use the typical ECC 2-document-flow for replenishment from central to local DC across different company codes and supply chain planning and operative replenishment execution is done using APO-SNP (heuristics, deployment, TLB for IC POs) with a little enhancement for LocationAliasing. Question I have is if / how SAP supports this CrossCompany document & demand / supply flow in there SCM planning systems.
SAP SCM/APO - I'm not aware of supporting such scenario in ERP CIF integration, SNP planning (FCST consumption, demand recognition, deployment, TLB for creation etc.)
SAP IBP for Response&Supply - is or are there plans to support this end2end (fcst consumption, deployment, TLB , RTI / CPI-DS integration etc.)
Regards
Thomas