Intercompany Work#

Overview#

The intercompany management functionality is designed for users who have set up multiple independently operating business entities, each aiming to cover a different region or territory or provide a distinct range of products and services to customers.

Called companies in the system, they typically manage their own data and finances. Sometimes, however, several of them might need to supply products or services to the same customer at the same time. For example, a project might require that staff members working for one company lend their expertise to another. This is where IC management can help coordinate and bill work done on a project.

Intercompany functions and roles#

When a customer places an order for an intercompany job, one organization typically takes on the role of main contractor. This business will be referred to in the following as the billing company.

The services and materials required for the job are then stored on WBS lines that you set up within that company. However, to provide a specific service, the business now hires another to act as a subcontractor, which will be called the service company for the purposes of this article.

The business relationship between both companies isn’t set in stone. For other jobs, the roles might be reversed, and the organization that used to supply a service might become the business entity that bills the project. A billing company can hire multiple service companies for a job or complete work on its own.

All service companies are set up as vendors in the partner company that bills the job. The partner, in turn, is entered as the customer in each service company. The actual customer is stored with the job that you set up in the billing company.

To transfer a resource task to a service company, you can then choose WBS lines in the partner business and use a function to copy the entire job, including the selected lines, to the service company for processing the order.

Service companies always send invoices to a billing company and never directly to a client. The job ledger entries that are created from posting these outgoing invoices—marked as inbound in the billing company—are assigned to a WBS and later invoiced to the end customer according to a job-specific price agreement.

Billing and service companies might use different local currencies, which will affect how invoices are settled internally. For example, a billing company might be sending invoices in EUR, whereas the business providing services for the job being billed might have entered DKK as its local currency in Finance Setup.

Setup#

Register a billing company#

Before you can copy job data from one business to another, you need to turn on IC management. The settings described here only need to be made once.

Choose an IC partner#

Each billing company must have a service company assigned as an IC partner. To assign a partner:

1. Choose the Search icon, enter Intercompany Partners, and then choose the related link.
2. On the ribbon, choose New to set up a partner.
3. Fill in the fields as described in the following table.

General#

Purchase Transaction#

This FastTab shows the vendor assigned to the billing company’s IC partner.

To set up a vendor, open a vendor card and choose a company partner in the IC Partner Code field on the General FastTab. The Vendor No. field is then filled in automatically.

KUMAVISION project365#

Filling in the fields on this FastTab is optional but provides you with a set of alternate numbers and codes when you transfer data to a service provider. WBS and budget lines that you create in a billing company include primary keys, that is, numbers and codes, for the following job information:

• Resources and resource groups
• Work packages
• Phase codes
• Task codes
• Step codes
• Work types

Because data records in service companies don’t need to have primary keys identical to those in a billing company, you can use the options on this FastTab to specify new numbers and codes for them as described in the following table.

Example
In a billing company, a work package named Project Management with code AP001, shared code PL, and new number RAB001 was entered on a WBS line that you want to copy to one or more service companies.

Internal Code
Billing company code AP001 is copied as is to all service companies.

Shared Code
Shared package code PL is copied to all service companies instead.

Activity IC Partner Ref.
Work package code RAB001 is copied to service company IC1020.

As you can copy projects from one billing company to multiple service companies, the first two options apply to all existing service providers.

The third features company-based code calculations for service companies, which makes it the most flexible but also the most time-consuming setup solution.

For resources or resource groups, there also exists the option of converting a certain resource in the billing company into a resource group in the service company as you copy data from one to the other.

This option is particularly useful if a certain resource is entered on a budget line in a billing company, but the partner company only requires that the line be completed by a member of the related resource group, and the other way around.

To turn on the option, select Resource IC Partner Ref. in the Outbound Job Resource No. Type field on an intercompany card. You also need to assign the resource to the relevant service company. To do this:

1. Open the relevant resource card.
2. On the ribbon, choose Related > Resource > IC Partner References.
3. Fill in the fields as necessary.

Another field on the FastTab is the Outbound Job No. field, which shows the number that you want to use for jobs copied to the partner company. The options in this field are described in the following table.

Register a service company#

Service companies must also be configured before first use.

Choose an IC partner#

Like a billing company, a service company must be assigned to an IC partner. To assign a partner:

1. Choose the Search icon, enter Intercompany Partners, and then choose the related link.
2. On the ribbon, choose New to set up a partner.
3. Fill in the fields as necessary.

General#

Sales Transaction#

This FastTab shows the customer assigned to the service company’s IC partner.

To set up a customer, open a customer card and fill in the IC Partner Code field on the General FastTab. The Customer No. field is then filled in automatically.

In the Outbound Sales Resource No. Type field, you specify if you want the number of a billing resource to change when a sales invoice is sent by the subcontractor to the billing company, where it is converted into a purchase invoice. Billing resources are used by service companies to charge for work they have done on a project. The options available in the field are described in the following table.

This field is not to be confused with the Outbound Job Resource No. Type field.

The Outbound Job Resource No. Type field is used to copy jobs, including selected WBS and budget lines, from a billing to a service company and is maintained by the billing company see Register a Billing Company.

The opposite is true for the Outbound Sales Resource No. Type field, through which the system converts resource numbers on sales invoices sent to billing companies. This field is updated only in service companies and extends standard functionality to include IC transfers of resource-type invoice lines, which are needed to calculate job usage based on billing resources.

You can also use the Outbound Sales Resource No. Type field for other purposes, for example, when you don’t work on a specific job but want to copy a sales invoice with resource lines between companies.

The Shared Type or New Type field must then be set to Resource, as only resources, not resource groups, can be copied to sales and purchase invoices.

Copy jobs from billing to service companies#

As described earlier, you must set up an IC partner as a customer and another as a vendor if you want to copy a job from a billing to a service company.

Before you can exchange information between them, you also must have specified how basic job information is converted during transfers, including conversion rules for resources and resource groups, work packages, phases, tasks, steps, and work types.

Create a job in a billing company#

To use intercompany management, a billing company must be specified as the main contractor. You also need to create a job with WBS lines and budget lines and select a customer for it.

Additional fields on the job card, on the Intercompany FastTab, then show the status of transfers between the billing company and its subcontractors.

The No. of IC Partners is the only relevant field on this FastTab in a billing company. The field shows the number of service companies to which the job has been copied. The other fields are required by service companies and are described later.

Before you can copy a job to a service company, you need to open the relevant WBS and assign a partner through the IC Partner Code field to each line that you want to transfer. You can assign a different IC partner per line if necessary. All lines not assigned to a partner contain work packages that will be provided by the billing company. Afterward, you need to run the Copy Job to IC Partner function from the job card.

The budget lines you set up for the job are then copied alongside their WBS lines to the service company. To prevent the system from transferring a line, you must select the No IC Transfer checkbox there.

Example
Besides the services ordered, another budget line has been set up. This line must not be copied, as it is used for intercompany reconciliations. To prevent the line from being copied, you select the No IC Transfer field there.

The Copy Job to IC Partner action requires the selection of an intercompany partner. Available are all partners specified as such on the WBS lines of the job, which will make it easier for you to choose a partner if many companies have been stored in the system. You then need to rerun the function for each partner that you want to send the job to.

If you’ve turned on the ICP Ships to Customer Address toggle on the job card (might already be filled in from a job template), the address specified for the project is entered as the service company’s ship-to address. With the toggle turned off, the job will be delivered to the business billing the services, that is, to the customer address entered there.

Specify resource prices#

Besides WBS and budget lines, you can use prices that were agreed on by a service and a billing company to create invoices for internal billing. Each price you enter on the Job IC Partner Resource Prices page applies only to a specific job.

When you copy a job, the price is then copied to the service company’s Job Resource Prices page. The fields on both pages are identical.

Based on what option you selected in the Type field, you can enter price information for specific resources, resource groups, or all resources.

A price that is stored in the Price (LCY) field is always shown in a billing company’s local currency. This is because the work performed by subcontractors will be billed in the currency specified for the billing company.

Copy a job to a service company#

To copy a job from a billing to a service company:

1. Open a job card.
2. Choose Copy Job to IC Partner.
3. On the Options tab, choose the IC partner to which you want to copy the job.
4. Choose OK to start the transfer. The number of records copied is shown when the process is complete.

Running the function increments the value in the No. of IC Partners field in the billing company (see the Intercompany FastTab on the job card). This field specifies to how many partners a job has been copied so far. You can go to the field to open a list that shows all IC partners assigned to the job and the number they gave the project.

As the same job can be copied to an IC partner multiple times to update information, the number of times a job was copied to a single business is shown as well. To see a complete log of all transfers, select the No. of Transfers field.

A job is copied to only one intercompany partner at a time. However, you can run the Copy Job to IC Partner function as often as you need. You can also use it repeatedly, for example, to copy additional WBS lines to the same IC partner or to add new price agreements from the Job IC Partner Resource Prices page.

As mentioned, running the function more than once to copy data to the same job and partner increases the value in the No. of Transfers field in the Job IC Partner table by one.

Each time, the function checks if the billing company contains all the data necessary for transferring resources and resource groups, work packages, phases, tasks, steps, and work types to the relevant service company.

For example, if you select Shared No. as the outbound job resource number type on a resource card, the system checks during transfer if this field has been filled in for each resource and group that you want to copy and then copies its value to the subcontractor.

The same applies to conversions based on the Activity IC Partner Reference option. If you use this conversion rule, all data that you want to copy must have a reference entry to an activity in the billing company, and the New No. field stored there cannot be blank. However, the function doesn’t check if new values calculated according to the rule are valid in the service company.

Review data in a service company#

Prior to an explanation of how to review job data, an example will demonstrate how much of a job stored in a service company is copied from a billing company.

Scope of data transfer#

A number is assigned to a job in a service company depending on what option you chose in the Outbound Job No. field on the billing company’s job card.

In our example, the New No. option has been chosen on the job card. When the job is copied from the billing to the service company, a new number is then assigned to the job automatically. This number is the same as the number that is stored in the billing company’s IC partner list.

In the service company, you can now see on the Intercompany FastTab on the card of the same job where the project originates. The two jobs are therefore linked—the prerequisite for copying invoices and assigning ledger entries between companies.

Linking a service to a billing company also fills in other Intercompany FastTab fields relevant to the service company. They are described in the following table.

The customer stored with the service company is the billing company, as the service company isn’t the end customer but the subcontractor.

If a billing and a service company use different local currencies, we recommend that you already store the invoice currency for the organization that bills services with the company that supplies them. Invoices sent between a service and a billing company always appear in the currency set up for the billing company.

Copying job data to a service company also copies information from the job’s WBS header and lines, including from its budget lines. In our example, the work package ordered is transferred as well, with the rest of the packages to be completed by the billing company on its own.

You can copy a job from a billing to a service company more than once. If you do so, the system will skip WBS or budget lines that have been copied to the subcontractor in the past. For this reason, the IC review status of all budget lines is identical to that of their WBS lines.

In the service company, you can then edit the copied WBS and budget lines or create new lines manually. You can also create budget lines for a WBS line transferred from the billing company. This means that jobs set up in service companies can have both WBS and budget lines with and without a reference to a billing company.

Job transfers additionally include the headings and extended texts that were entered on WBS and budget lines to help subcontractors provide required services. However, this again only occurs the first time you copy lines. Neither headings nor texts will be updated during repeats.

Similarly, comments entered for a job, WBS lines, or budget lines aren’t copied at all, as they’re considered internal information intended only for employees of the billing company. Dimensions (on a job header, on WBS lines, and on budget lines) typically aren’t copied either, as they’re recalculated in service companies depending on how you set them up there.

Job IC resource prices, on the other hand, are transferred to the Job IC Prices page. Furthermore, some base data used for project management is converted according to the rules specified in the billing company. This includes data regarding resources and resource groups, work packages, phases, tasks, steps, and work types.

Still, after a project has been copied to a service company, multiple fields on the job header, the WBS lines, and the budget lines remain blank. Examples are the address fields on the header and the price fields on the lines.

When you transfer a job, the system strictly applies the specified conversion rules to make changes to data in the service company. However, it doesn’t check if a copied field value can be used in that company.

For example, although job usage might be assigned to a resource group, the system doesn’t check whether the group exists in the service company. Because there might be other missing and partly non-validated information, the Locked toggle on the card of a copied job is set to Post automatically after each transfer. You then need to review the job before you can post to it.

Review a job in a service company#

Sometimes, the conversion rules that you specified for intercompany transfers might not be enough. For example, the phase, task, and step codes that you set up for a job might not exist in the service company to which you copied the project.

To check job data in a service company:

1. Open a job card in the company.
2. Choose Actions > IC Review on the ribbon.
3. On the Options tab, select for phase, task, and step codes whether you want to have them created automatically or whether the review process should be canceled with an error message when a code doesn’t exist.
4. If a job transfer has created inconsistencies in other data, for example, when it comes to resource groups, the process will be canceled regardless.
5. Choose OK to start the review.

The system then runs a check on all job-related data that was copied to the service company. If the process is cancelled because of an error, you can correct the error manually and run the function again.

Following the review, part of the fields on the Intercompany FastTab on the job card are updated as described in the following table.

At this point, the Locked toggle on the General FastTab is turned off as well, which unblocks postings to the job.

The status of the job, however, is still set to Quote. To start the project, you need to change the status to Open in the usual way, through the Status field. You also need to enter a project manager in the Person Responsible field.

To post consumption to a work package entered on the WBS of the job, you need to change the work status of the package to Released. You can then specify additional packages on the WBS if necessary.

Example
You define a package for coordinating work with the business that placed the order. As the package isn’t invoiced to your intercompany partner, you set the Billing Type field for it to No Billing. This way, the WBS line on which you entered the package in the service company will not be linked to a line in the billing company.

Post consumption in a service company#

Before you can post time and material usage for a project in a service company, you need to ensure that the data pertaining to the job is validated (see Review a Job in a Service Company).

The project is then treated like any other: Employees can record their hours on it, and the project manager can approve these hours and post them to the job.

Sales invoices can also be created in the usual way, by using the suggestion feature. The differences to standard processes start when you’re about to post an invoice to the billing company. Not only will it be submitted through an IC transfer, but it will be recreated as a purchase invoice there as well.

Meanwhile, the job ledger entries created from item and resource consumption are aggregated into intercompany commitments. For more information, see Billing Company Commitments.

Post time#

To post hours on a WBS line set up in a service company, you must change the work status on the line to In Progress. You can then enter and post hours through your job time journal.

Example
You post two hours spent on coordinating work with an IC partner in the time journal. The remaining hours will go toward the services requested by the partner.

Post job ledger entries#

To convert posted hours into job usage, open a job journal and choose Process > Get Time Entries. This posts the journal lines and creates job ledger entries.

Billing company commitments#

Typically, invoices exchanged between a billing and a service company are based on job usage entries posted in the service company. These, in turn, often originate from hours posted by the subcontractor’s employees.

As the intervals between posting job-related work hours, converting them into usage, and billing them might be relatively long, it could prove helpful to be able to estimate the expenses incurred by a service company before an invoice is even created.

These estimates show up in billing companies as intercompany commitments. They represent either hours recorded for a job in a service company but not yet posted as usage or job usage posted but not yet invoiced. Commitments consist only of entries that can be invoiced and that originate from WBS lines included in an IC transfer to the service company.

To (periodically) collect and compile billing-relevant time and usage entries, you can run the Calculates Lines function from the Job IC Commitment page.

Show unbilled entries#

Although the Job IC Commitment page looks like a journal, it’s not used to post but to collect job data from a subcontractor and show that data in a billing company.

As a billing company can be linked to multiple service companies and data for each might be available at different times, every company providing services gets its own intercompany commitment page, with the page bearing the name of the business it was created for.

To copy data from a subcontractor to this page:

1. Open a billing company.
2. Choose the Search icon, enter Job IC Commitment, and then choose the related link.
3. Select an IC page in the Name field.
4. Choose Calculate Lines on the ribbon.

The page then shows the intercompany commitment values copied from the service company. If there are no unposted time entries, the commitment will consist entirely of job ledger entries (see the Entry Type field).

The transfer includes only entries from ordered, billable work packages; non-billable packages aren’t copied from the service company.

The fields that can be found on the page are described in the following table.

Running the Calculate Lines function as described earlier deletes all lines, even those copied previously, before retransferring data from the service company.

This function is the only tool available to you for updating lines on an IC commitment page. Posting new time or job ledger entries in the service company will not have the same effect.

In short, you need to run the function in the billing company on a regular basis and do so at the latest before you intend to analyze the IC commitment with the help of fields calculated automatically on the company’s WBS lines.

Show on a WBS#

Every WBS and budget line contains two fields for determining a billing company’s IC commitment. One shows the commitment by quantity, the other by value. Both fields are sourced from the Job IC Commitment page.

As this page shows the WBS and budget lines of all service companies assigned to a specific job, we recommend that you include the commitment fields in analyses only after you have updated the relevant IC commitment pages. Both fields are described in the following table.

Send invoices to a billing company#

A group of intercompany-specific outbound and inbound transactions is used to bill consumption posted in a service company to the company invoicing the work to the end customer.

Create an outbound invoice in a service company#

You create invoices in a service company in the usual way, through suggestions. To create an invoice that you want to send to a billing company:

1. Open a service company.
2. Choose the Search icon, enter Invoice Suggestion, and then choose the related link.
3. On the ribbon, choose the Create Suggestion Lines function. This fills in the page with all consumption entries posted for the services provided.
4. Select the Direct Invoice checkbox for entries that you want to bill.
5. On the ribbon, choose the Create Invoice action, and then choose OK to create an invoice from the suggestion.

Example of an outbound invoice#

Following on from our earlier example, you run the Create Invoice function from the Invoice Suggestion page to create an invoice with amounts given in EUR, the billing company’s local currency. In the service company, EUR is a foreign currency, as the local currency set up there is DKK.

Running the function then creates a resource-type invoice line showing the number of the billing resource that you specified for the Project Management work package.

The line also includes invoice entries. These are later used to close the job ledger entries stored on the line and provide proof of performance.

Post an outbound invoice#

Posting an invoice in a service company creates a posted invoice, invoice lines, and invoice entries, as well as G/L, resource, and job ledger entries of type Sale. As the customer entered on the invoice is set up as an IC partner, this process additionally triggers an outbound transaction.

Standard intercompany transactions aggregate data for outbound documents such as invoices and credit memos on the Intercompany Outbox Transactions page. The page is now also used to submit the posted (outbox) invoice from the service to the billing company.

To see the document that you want to transfer, open the page, select the invoice, and then choose Outbox Transactions > Details on the ribbon.

In our example mentioned earlier, the outbox transaction is used to transfer a posted sales invoice, with amounts given in foreign currency EUR, from the service company to its IC partner. Standard functionality only transfers invoice lines through outbox transactions if the lines you want to send are of type Item or G/L Account. Because of the use of billing resources in the project365 industry solution, the functionality has been extended to give you the added option of sending resource-type invoice lines to an IC partner.

Furthermore, fields were added to the standard outbox transaction lines to show you job information stored in billing companies, for example, in the Source IC Partner Job No. and Source IC Partner Work Package Code fields.

Outbox transaction lines also have invoice entries. These are copied from the lines of a posted invoice when you set up an IC transaction.

In the Comments and Comments (Job Ledger Entry) fields, you can view the internal and billing-related comments for the job ledger entries you’re about to invoice. When a transaction is sent to a billing company, only notes relevant to billing are copied to the company, whereas in-house comments are ignored.

The transaction in our example can now be transferred from the service to the billing company for further processing.

Send an outbound transaction#

To transfer data on the Intercompany Outbox Transactions page:

1. Select the IC transactions that you want to send.
2. On the ribbon, choose Actions > Send to IC Partner. This sets the Line Action field of all selected transactions to Send to IC Partner.
3. Choose Functions > Carry Out Line Actions, and then choose OK.

Based on our earlier example, this would copy the outbox transaction created in the service company—along with the posted sales invoice—to the billing company.

Afterward, the document would be moved automatically from the Intercompany Outbox Transactions to the Handled Intercompany Outbox Transactions page.

Inbound transactions and purchase invoices#

Outbox transactions sent from a service company are received by a billing company as inbox transactions. The transaction information then needs to be checked before it can be used to create a purchase invoice. This invoice is later posted in the billing company to increase job usage relative to the amount of work performed by the service company.

Receive a transaction in a billing company#

As the service and the billing company must always be stored in the same database, sending an outbox transaction will create an inbox transaction in the billing company automatically.

Inbound transaction data#

To see what kind of data was received through an inbox transaction:

1. Choose the Search icon, enter Intercompany Inbox Transactions, and then choose the related link.
2. Select a transaction. On the ribbon, choose Process > Details.

On the header, the inbox transaction shows information about the intercompany partner and the vendor assigned to it. This information was converted from the partner’s outbox transaction and is presented here from the vantage point of the billing company to which the transaction was sent.

The lines transferred together with the transaction relate to the job and WBS lines to which you need to post in the billing company.

When you initially sent this job to the service company, the number of the project, as well as the reference values on transferred WBS lines, were copied to the WBS in the service company for informational purposes.

These key fields are now used to identify the job and WBS lines you want to post to. Both the job and the specified WBS lines must exist in the billing company.

Existing invoice entries and, potentially, billing-related comments are also part of the transfer. Job ledger entry comments—viewed as internal information—aren’t.

Additionally, the resource number on an outbox transaction line is copied as is to the corresponding inbox line. As the number might later be converted when you create a purchase invoice, it doesn’t yet need to exist in the billing company.

Accept an inbound transaction and create a purchase invoice#

When you’ve finished checking the transmitted data, you can use the information to create a purchase invoice from the Intercompany Inbox Transactions page in a two-step process:

1. Choose the IC transactions that you want to accept. On the ribbon, choose Actions > Send to IC Partner. This sets the Line Action field of all selected transactions to Accept.
2. Choose Process > Carry Out Line Actions, and then choose OK.

The system then creates a new purchase invoice from the selected transactions and moves them from the Intercompany IC Inbox Transactions to the Handled Intercompany Inbox Transactions page.

Post purchase invoices in a billing company#

View an invoice in a billing company#

The vendor shown on the invoice is the vendor set up for the billing company’s IC partner, that is, the service company.

Going by our example mentioned earlier, the next field on the header, Currency Code, would be blank. This is because the invoice sent by the service company would be in the billing company’s local currency, which is EUR.

The No. field on the invoice lines, on the other hand, would be filled in with the code of a billing resource. This code might change before being transferred to an invoice, based on what conversion option you choose in the Outbound Purch. Res. No. Type field on a service company’s IC partner card.

For example, if you choose the Internal No. option in the field, the resource number is converted according to the simplest of rules—or, more specifically, it remains as is.

Meanwhile, the invoice entries initially transferred to inbox transaction lines are now copied to the Purch. Line Job Dstrn. page, where you can take a closer look at every invoice line created from the current IC transaction. To look at a specific line:

1. Choose the Search icon, enter Purchase Invoices, and then choose the related link.
2. Select a purchase invoice.
3. Go to the Lines FastTab and select a purchase line.
4. On the ribbon, choose Line > Purchase Line Job Dstrn.

Each line on the page might contain comments like those stored with invoice entries on inbox transaction lines. This means that the data shown on a purchase invoice in a billing company closely matches what you see on the original sales invoice sent by its service company partner.

Post an invoice#

Prior to an explanation of how you post a purchase invoice in a billing company, some general notes about the Purchase Line Job Dstrn. page mentioned earlier:

The purchase line distribution feature isn’t limited to the use case described in this article, that is, to transmit invoices between service and billing companies. Instead, as the name implies, it can be used to store all kinds of information on a resource-type purchase line if the line is assigned to a job and its work breakdown structure.

In short, the feature also allows you to store information about job-related subtasks on every purchase line on which a resource has been entered. The distribution lines created from this kind of purchase line receive from it not only the resource number and relation to a job and WBS line but also price specifications and line dimensions.

In turn, the quantity entered on all distribution lines combined must match the value specified on the purchase line.

But the feature can do more than provide you with an option to describe subtasks in purchasing. One notable benefit is its utility in posting partial consumption when you post a purchase invoice, as a consumption entry will be posted for each distribution line instead of one entry for the entire purchase line.

Posting a purchase invoice then copies the distribution lines (and the comment lines available for it) alongside other data to the invoice and assigns them to invoice lines.

Posting the invoice also creates G/L, vendor, resource, and consumption entries. The consumption entries are posted in a billing company to the WBS line from which they were originally copied to the business supplying services.

Fields such as Performance Date and Billing Resource Name, both of which are part of every consumption entry, can additionally be used to describe the work performed by the relevant service company in more detail.

Invoice end customers in billing companies#

The end customer is invoiced in the same way as you would a customer for a non-IC job. The original source of the job ledger entries that you want to bill isn’t relevant in this case.