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    Balakrishna Chaturvedula
    Intercompany contract setup for Projects
    Topic posted November 18, 2019 by Balakrishna ChaturvedulaBronze Trophy: 5,000+ Points, tagged Project Billing & Revenue, Project Costing 
    38 Views, 2 Comments
    Intercompany contract setup for Projects
    How to setup Intercompany Contracts in Projects

    Hi All,

    I have 10 different Legal entities (which are 10 different BUs) in scope for projects. All 10 LEs can work with each other and I do expect same transfer pricing to work across all. In order to achieve this, I am trying to understand how should I setup the Intercompany contract. Please advise.

    1. I cannot have multiple internal parties on the same Intercompany contract. So, should I be setting up 9 IC contracts in each entity or is there a way I can setup one and have multiple lines in the same contract. 

    2. Also, should I create cross charge project in each and every LE or leave the receiver project field blank?

    3. Here is link to documentation on various models to setup IC contracts. But I could not conclude on above.

    Thanks, Bala.




    • Mohan M N

      Dear Bala,

      My understanding is explained below.

      1. You will have to create one intercompany contract for each valid Provider-Receiver combination. For example: If there are only 2 LEs/BUs, and employees from any of them can work on projects belonging to the other LE, then you will have to create 2 IC contracts.

      2. You can leave the receiver project field blank in the IC contract if the bill/revenue plan and transfer price rules is same for all the receiver projects.

      Hope this helps.