Project Management

Get Involved. Join the Conversation.

Topic

    Sam Zhang
    Share project revenue between different business units under...
    Topic posted November 15, 2018 by Sam Zhang, tagged Project Billing & Revenue, Project Contracts, Project Costing 
    77 Views, 3 Comments
    Title:
    Share project revenue between different business units under same legal entity
    Summary:
    Share project revenue between different business units under same legal entity
    Content:

    Hi all,

    My question is:

    • How to share project revenue between different business units under same legal entity?

    The whole process is:

    1. Business Unit A get a contract from customer and create project.
    2. Business Unit B will be involved with this project and provide some labor resource.
    3. BU A will share fixed revenue to BU B regardless of the actual cost of the latter.
    4. or BU A will share variable revenue to BU B based ot the actual cost of the latter.

    How to implement this process? Should we use <intercompany> or <borrowed and lent>?

    Thanks,

    Sam

    Comment

     

    • Perry Unrau

      In the scenario for 2 different business units under the same legal entity, you could choose either intercompany billing or borrowed and lent.  It really depends on whether the 2 business units want an invoice trail of the transactions between them, since the invoice trail is not legislatively required because they belong to the same legal entity.  If an invoice trail is desired, then use intercompany billing.  If an invoice trail is not desired, then use borrowed and lent.

      Perry

       

      • Sam Zhang

        Thanks your advise! And the further question is:

        Could I enter a manual price or amount when creating invoice instead of the transfer pricing? I want to share fixed revenue no matter what the cost is.

         

        Thanks very much

        Sam

    • Perry Unrau

      Borrowed and lent processing only supports transfer pricing.  Intercompany Billing supports all manner of rate-based contract lines - rate schedules, burden schedules, and cost reimbursable, in addition to transfer pricing.  Intercompany Billing also supports all manner of fixed-price contract lines - percent spent, percent complete, and amount based.

      Perry