Intercompany Transactions Processing through AGIS in Oracle

Applications-R12
30/12/2016

White Paper
QCOM

MANOHAR MORISETTY
Oracle-Oracle EBS
[email protected]
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 Table of Content

Abstract ............................................................................................................................................................................. 4
About the Author .............................................................................................................................................................. 5
About the Domain............................................................................................................................................................. 5
1. Introduction .............................................................................................................................................................. 6
2. Configuration ............................................................................................................................................................ 7
2.1 Legal Entity Definition ....................................................................................................................................... 7
2.2 Intercompany Transaction Accounts: ............................................................................................................... 8
2.3 Supplier/Customer mapping: ............................................................................................................................ 9
3. Process: ................................................................................................................................................................... 10
3.1 Create AGIS transaction batch ........................................................................................................................ 10
3.2 Approve the AGIS transaction:........................................................................................................................ 11
3.3 Create and Account the AR invoice: ............................................................................................................... 11
3.4 Create and account the AP Invoice ................................................................................................................. 13
4. Conclusion ............................................................................................................................................................... 15
5. Acknowledgements................................................................................................................................................. 16
6. References .............................................................................................................................................................. 17

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Abstract
The purpose of this document is to explain how the Advanced Global Intercompany System (AGIS) helps in
processing the intercompany transactions in Oracle 12 E- Business Suite. This document provides high level
explanation of the respective setup, transactions and other activities that help in managing the transactions through
AGIS in Oracle 12 E- Business Suite.

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About the Author
Manohar Morisetty

Employee No: 872666

Experience: Working as ERP Functional Consultant and having 14 Yrs. Of experience in Oracle Financials & Project
Accounting modules and Hyperion Financial Close Management.

About the Domain

Domain: Finance and Oracle e Business Suite

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1. Introduction
Advanced Global Intercompany System (AGIS) enables us to create, settle and reconcile intercompany transactions.
Intercompany transactions are transactions that occur between two related legal entities in an enterprise or
between groups in the same legal entity. Transactions that occur between two legal entities are called intercompany
transactions and transactions that occur between two groups within one legal entity are called intracompany
transactions.

We can create AR/AP invoice for Intercompany transactions as part of settlement. But intracompany transactions
have to be settled through the journal entries only. The transactions that are created in AGIS are independent and
doesnt integrate with any modules other than Payables or Receivables.

The AGIS intercompany transactions are normally created where there is no physical movement of goods. The below
are some sample scenarios for which AGIS can be used.

I. The expenses paid by the legal entity in its domestic country, on behalf of a legal entity that is located/
registered in a different country.

II. Services offered by an employee of a legal entity in its domestic country, to the customer a legal entity that
is located/ registered in a different country.

III. Sample products produced and distributed by the legal entity in its domestic country, on behalf of a legal
entity that is located/ registered in a different country.

IV. The receivables collected by a legal entity in its domestic country, on behalf of a legal entity that is located/
registered in a different country.

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2. Configuration

The below mandatory configurations are to be done to go-ahead with AGIS functionaity in the General Ledger
module.

1. Legal Entity Definition

2. Intercompany transaction Accounts
3. Supplier/ Customer mapping

2.1 Legal Entity Definition

The organizations that are involved in the intercompany AGIS transaction are called sender/ Transacting and
Receiver/ Trading Partner. Both the organizations are to be defined as legal entities and the respective operating
units are defined and assigned to the respective legal entitiy.

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2.2 Intercompany Transaction Accounts:

The sender or receiver organizations has to be mapped to intercompany payables and intercompany receivables
accounts. These accounts are debited/credited based on the trasnaction type. On the AP invoice, the Intercompany
payables is credited and on the AR invoice, the intercompany receivables account is debited.

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2.3 Supplier/Customer mapping:
The sender/ Receiver organizations are to be mapped to a customer/ supplier and respective sites. This information
is used to create the AP/AR invoice in the respective operating units.

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3. Process:

3.1 Create AGIS transaction batch

The first step in the AGIS transaction process is to create a transaction batch. The transaction can be of Inbound/
Outbound type. The transaction batch has multiple transactions. The initiator or sender information is captured at
the batch level. The Receiver information is captured at the individual transaction level. The transaction type on the
batch governs the process to stop at the journal approval level or to go-ahead and continue till the AP/AP invoice
creation level.

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3.2 Approve the AGIS transaction:

The approval process of AGIS transaction is governed by the AME rules. The receiver can approve the transaction
through the notification window or through the mail received in the mail box.

3.3 Create and Account the AR invoice:

The AGIS transaction may stop at the JE approval level, if the workflow assigned to the transaction type ends at this
level. But if the transaction type workflow is enabled for AR/AP invoicing, the AR invoice is created in the Receiver
operating unit. The below 3 requests are to be submitted to create the the AR invoice and create Accounting.

1. Transfer Intercompany transactions to Receivables.

2. Auto-Invoice master program
3. Create Accounting

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3.4 Create and account the AP Invoice

The AGIS transaction may stop at the JE approval level, if the workflow assigned to the transaction type ends at this
level. But if the transaction type workflow is enabled for AR/AP invoicing, the AR invoice is created in the Receiver
operating unit. The below 3 requests are to be submitted to create the the AR invoice and create Accounting.

1. Transfer Intercompany transactions to Payables.

2. Payables Open Interface Import
3. Create Accounting

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4. Conclusion
AGIS functionality is the standard oracle applications functionality that helps to manage the intercompany
transactions settlement.

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5. Acknowledgements

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6. References
1. Oracle Advanced Global Intercompany System user guide
2. Oracle metalink

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 Thank You

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