Gloabl Intercompany System

Create Intercompany Transactions through GIS


Intercompany transactions can be entered in two ways.

1. Intercompany System
2. GIS - Global Intercompany system


Intercompany Transactions can be used when there is only one set of book. But GIS can be used both in SSOB and MSOB.

To Create Intercompany Transactions through GIS


1. Define your parent and subsidiary COA, calendars, Currencies and SOBs.
2. Setup the GIS.
3. Define exchange rates if subsidiaries have different default currencies or if currencies will be used other than default.


What is GIS

The Global Intercompany System (GIS) provides a controlled, central location for subsidiaries to conduct intercompany transactions throughout a global organization. GIS manages intercompany transactions that occur between sets of books, and the sets of books may be on different instances. If all your intercompany transactions occur in one set of books, it is recommended that the intercompany segment be used to manage the truncations.

Before any global intercompany transactions can be processed, GIS must be setup. GIS setup consists of defining a responsibility for each subsidiary, setting intercompany profiles, establishing transaction types, creating clearing accounts, and defining auto accounting rules.

In addition, the Global Intercompany setup should involve a planning process to decide how best to use GIS. Because transactions can flow from a parent to subsidiaries, between subsidiaries, and from subsidiaries to a parent, it would be effective to involve all parties in the planning process. You should collectively decide on the best way to use GIS, create and develop policies enterprise-wide to support its use, and use control mechanisms to ensure that policies are adhered to locally. Again, the infrastructure required to successfully launch GIS will be a function of usage, variety of transactions, and the skills of the users.


There are a number of ways to enter intercompany transactions in GIS.

• All the Sender and Receiver distribution lines and clearing accounts can be entered manually.
• One or more of the Sender clearing account, Receiver distribution line, and Receiver clearing account auto accounting rules can be entered and enabled resulting in automatic generation of that line.
• Import transactions through the GIS open interface. Generally, the open interface is used when a subsidiary is on a separate instance or a non Oracle instance.

Automatic transaction line generation that is based on Auto Accounting rules is preferred over manual entry since intercompany transaction lines are based on predictable account code combinations thereby reducing errors. Auto Accounting rules establish chart of account relationships between GIS Senders and Receivers.


Create Manual Intercompany Transactions

All the Sender and Receiver distribution lines and clearing accounts can be entered manually if intercompany Auto Accounting rules are either not entered or not enabled for the Sender and Receiver.


Based on the auto accounting rule system will generate the accounting. In this example Auto accounting rules are not enabled.

To enter an intercompany transaction manually, choose the General Ledger responsibility of the GIS subsidiary for which you want to enter intercompany transactions. During setup the General Ledger Super User responsibility was given access to the intercompany transaction windows and assigned to the US Corporate subsidiary.

Navigate to:Transactions>Enter

Click on New to create a transaction.

Enter Intercompany Transaction.
Number: If automatic transaction numbering is not enabled, must enter transaction number.
Status: System generated.
Sender: Subsidiary defaults from responsibility.
Receiver: Enter or select the receiving subsidiary.
GL Date: Enter the GL transaction date.
Period (Sender): Defaults based on GL Date.
Period (Receiver): Defaults based on GL Date.
Entered Date: System generated after document saved.
Type: Enter or select an intercompany transaction type.
Currency: Accept default or choose one that exchange rate exists for.
Approved Date: System generated date receiver approves.
Description: Enter.
Control: If entered, the amount must equal the amount
calculated for clearing account of the completed
transaction. Recommend entering, because Receiver may
not have privilege to view Sender’s portion of transaction.
Note: Leave space for justification of Receiver’s rejection

Sender tab:
Sender distribution line: The sender distribution lines must be entered manually.
Enter the line number, account and amount of distribution line(s).


Sender intercompany clearing account:
Enter the sender clearing account. There is a list of values for the accounting segment. The natural account must be both defined as a valid value, and as a clearing account for the subsidiary.


Note: When intercompany transaction lines are entered manually in GIS, the intercompany segment is not automatically populated. The user can manually populate the intercompany segment on any of the sender and receiver intercompany lines.


Receiver tab:

Receiver distribution line: If auto approve is not enabled for this transaction, the line must be entered by the Receiver. When creating an automatically approved transaction, the Sender must enter the Receiver’s intercompany transaction lines.

Receiver intercompany clearing account:
If auto approve is not enabled for this transaction, the line must be entered by the Receiver. When creating an automatically approved transaction the Sender must enter the Receiver’s clearing account.

Once the transaction is saved, the transaction number is generated.

In this example, the I/C Chargeback transaction type is auto approved, and the US Corporate subsidiary has auto approval privileges so the sender entered the receiver lines.

The Generate button is not enabled since AutoAccounting rules for the sender and receiver’s charts of accounts have not been entered or enabled.

If the transaction was not auto approved, then the transaction would have to be submitted to the GIS system for approval by clicking the Submit button.

Since auto approve is enabled for this transaction, click on the Approve button. If the Sender clicks on the Submit button when auto approve is enabled for a transaction, the Receiver will still have to approve the transaction.

Notice the status of the transaction has changed to Approved.

Once an intercompany transaction has been approved, the Sender can reverse the transaction. To reverse the transaction, click on the Reverse button. This will create a new intercompany transaction.

To query the transaction at the Receiving subsidiary, change to the appropriate responsibility for that subsidiary.

Navigate to: Transactions>Enter

Enter search criteria and click the Find button. Locate the appropriate transactions by pressing your Down arrow key.

A Receiver cannot alter a Sender’s information and the receiver cannot change his data if it was auto approved. Auto approve requires the Sender to provide the Receiver’s distribution line and intercompany clearing account.

The Sender entered the receiver distribtuion line and intercompany clearing account. All the Receiver can do in GIS is view the transaction. The Receiver can not Approve or Reject a transaction that was automatically approved by the Sender.

Automatic Generation of Sender Clearing Account

You can define AutoAccounting rules that establish chart of account relationships between GIS Senders and Receivers. When you enter intercompany transactions and choose the Generate or Submit button, GIS refers to the AutoAccounting rules. Based on the rules you have defined and enabled, GIS can automatically generate account code combinations and amounts for any combination of the following: the sender clearing, receiver distribution, and receiver clearing transaction lines.

In this example AutoAccounting rules are entered and enabled for the sender clearing rules, but not the receiver distribution rules and receiver clearing rules. The sending subsidiary has approval privileges, but for the I/C Payables transaction type, auto approve is not enabled.

The sender clearing account rule for US Corporate and transaction I/C Payables is displayed below.

Choose the General Ledger responsibility for the GIS subsidiary for which you want to enter intercompany transactions.

Navigate to: Transactions>Enter


Click on New to create a transaction.


Enter the intercompany header information, in the same manner as you would for an intercompany
transaction in which the sender and receiver distribution lines and clearing accounts are all manually entered.

Sender distribution line: The sender distribution lines must be entered manually.
Enter the line number, account and amount of distribution line(s).
Sender intercompany clearing account:
In this example AutoAccounting Clearing Rules are entered and enabled for the sender subsidiary so the intercompany clearing account need not be entered.

Choose Generate to automatically generate transaction lines using the AutoAccounting rules you defined previously. When you choose the Generate button, your defined AutoAccounting rules will overwrite any sender clearing, receiver distribution, and receiver clearing lines and amounts you may have entered in the window.

A Note will appear and ask, “This action will automatically save your work. Do you want to continue?” Click the Yes button. Then a note appears that says “Automatic account generation completed”. Click on the OK button.

The sender clearing account was generated based on auto accounting rules since the sender clearing rules are enabled. Review the transaction. The Sender can modify the sender information.


No receiver auto accounting rules were enabled in this example so the receiver clearing account and receiver distribution line were not generated.



The Sender can enter the receiver distribution line and receiver clearing account, but the Sender could not Approve the receiver information since auto approve is not set for the type I/C Payables. The Receiver, in this example, could overwrite the receiver information that the Sender enters.




Receiver tab: Select this tab.
Receiver distribution line: In this example, the Sender will enter the Receiver Distribution line.
Receiver intercompany clearing account:
In this example the Sender will not enter the Receiver Clearing Line.

The Approve button is not enabled even though the sending subsidiary has approval privileges because auto approve is not enabled for the transaction type I/C Payables.

Click on the Submit button.

A note will appears that asks, “This action will automatically save your work. Do you want to continue?” Click on the Yes button.

If the receiving subsidiary has a notification contact assigned and the intercompany transaction amount is above the notification threshold amount, a message will appear that indicates a notification was sent.



Note that the status of the document changes from New to Review and that the Submit button has been replaced with Recall. The transaction must be completed and approved by the Receiver.

A Sender can only recall a document whose status is Review. Once recalled the status of the intercompany transaction reverts to New, and the transactions can be modified and resubmitted or deleted.

Next we will query the transactions at the receiving subsidiary. Change to the appropriate responsibility for that subsidiary.

Navigate to: Transactions>Enter

Enter search criteria and click the Find button. Locate the appropriate transactions by pressing your Down arrow key.







A Receiver can not alter a Sender’s information but he can change his accounting data as long as the document was not auto approved. This transaction was not auto approved so the Receiver can override the receiver distribution line that the Sender entered, and the Receiver can enter a receiver clearing account.



The Receiver changes the receiver distribution account segment from 20110 to 20310, and enters the intercompany clearing account.

The Receiver chooses the Approve button. A note appears that asks, “This action will automatically save your work. Do you want to continue?” Choose the Yes button.

If the sending subsidiary has a notification contact assigned and the intercompany transaction amount is above the notification threshold amount, a message will appear that indicates a notification was sent.


Note the status has changed to Approved. All the action buttons are deactivated at the bottom of the page.
Generate Receiver Intercompany Transaction Lines Automatically

An intercompany transaction will be created with a transaction type, I/C Sales that has auto approve enabled. In this example the auto accounting receiver distribution and clearing rules are enabled.

Choose the General Ledger responsibility for the sending GIS subsidiary.

Navigate to: Transactions>Enter



For the intercompany transaction, the sender distribution line is entered, but the sender clearing account, receiver distribution line and receiver clearing account are not entered.

Click on the Generate button.

A note will appear that asks, “This action will automatically save your work. Do you want to continue?” Click on Yes. Another note will appear that says, “Automatic Account Generation completed”.



The sender receiving account, receiver distribution line and receiver clearing account are generated based on the Auto Accounting rules.


The auto accounting rule for Receiver UK Operations and the transaction type I/C Sales is displayed below.





In the Enter Intercompany Transactions window, the Approve button is enabled since auto approval is enabled for the intercompany transaction type and sender has approval privileges.

Note: The Delete button is enabled. Before an intercompany transaction is approved, it can be deleted.

Click on the Approve button.



After the transaction has been approved, the status change to Approved, and only the Reverse button is activated.

Once an intercompany transaction has been approved, the Sender can reverse the transaction. To reverse the transaction, click on the Reverse button. This will create a new intercompany transaction.

Change to the Receiver’s appropriate General Ledger responsibility to query and view the intercompany transaction.

A Receiver cannot alter a Sender’s information and the Receiver cannot change his data if the intercompany transaction was auto approved. Auto approve requires the Sender to provide the Receiver’s distribution line and intercompany clearing account either manually or automatically.

In this example, the Sender generated the receiver distribtuion line and intercompany clearing account through auto accounting. All the receiver can do in GIS is view the transaction. The Receiver can not Approve or Reject a transaction that was automatically approved by the sender.


Rejecting Intercompany Transactions

The Receiver can Reject as well as Approve an intercompany transaction that the sender created as long as the transaction is not approved by the Sender.
The Receiver must find the intercompany transaction.

Navigate to: Transactions>Enter



Once the Receiver finds the intercompany transaction and reviews it, the transaction can be rejected.

It is recommended that a reason for rejecting the transaction be entered in the note field. To reject the transaction, click the Reject button. A note will appear, “Do you want to continue?” Click on Yes. If the sending subsidiary is setup to receive notification, a notification will be sent.



The status of the intercompany transaction changes to Rejected. The transaction is not available for more processing.


Defining Recurring Intercompany Transactions

Define recurring intercompany transactions if you regularly make the same intercompany transactions between subsidiaries. The journal lines that you create can be static or skeletal.

To define a recurring intercompany transaction access the appropriate responsibility for the Sender subsidiary.

Navigate to: Transactions>Define Recurring



Recurring Intercompany Transaction Batch Header Information.
Batch: Enter name of Recurring Intercompany Transaction Batch.
Sender: Defaults from Subsidiary assigned to responsibility.
Description: Enter for recurring batch.
Effective Dates: Optionally, enter a range of effective dates to limit use of the recurring intercompany transaction to a specific time interval.
AutoSelect box: Check if you want batch to be automatically launched during Generate Recurring Transactions process.
AutoCopy: Optionally, chose to copy from existing recurring batch.
Transactions: Click to define transactions in recurring intercompany transaction batch.



Recurring Intercompany Transaction Line Information.
Transaction: Enter a transaction name.
Type: Enter or select intercompany transaction type.
Receiver: Enter or select receiving subsidiary.
Status: Select one from list of values.
Note: Transactions with status of New are subject to auto
accounting rules that are defined and enabled. If Review is
selected, the sender side of the transaction must be completed.
If Approve is selected, both the receiver and sender sides of the
must be completed to save the transaction.
Currency: Enter or accept default for the transaction’s currency
Control: Optionally enter a control amount. If entered must equal the
amount calculated for the clearing account.
Description: Optionally, enter a transaction description.
Note: Optionally, enter a note.
Sender tab: Select this tab.
Sender distribution line: The sender distribution lines must be entered manually.
Enter the line number, account and amount of distribution lines.
Sender intercompany account:
If the sender intercompany account is not going to be generated through use of auto accounting rules, enter it.



Receiver tab: Select this tab.
Receiver distribution line: When creating an auto approved transaction the Receiver’s distribution line must be generated through auto accounting
rules or entered.
Receiver intercompany clearing account:
When creating an auto approved transaction the Receiver’s
intercompany clearing account must be generated through
auto accounting rules or entered.


Generating Recurring Intercompany Transactions

You must generate recurring intercompany transactions before submitting or approving them. When the transactions are generated, they can be viewed in the Intercompany Transactions window.

• Recurring intercompany transactions with a status of New are subject to auto accounting rules if defined and enabled. The sending subsidiary can review and submit them to the receiver for approval.
• Recurring intercompany transactions with a status of Review can be approved or rejected by the receiving subsidiary.
• Recurring intercompany transactions with a status of Approved are automatically approved.

Navigate to: Transactions>Generate Recurring


GL Date: Enter GL transaction date.
Batch: Select batches by holding your Control button down and right clicking on your mouse.
Generate Click button to submit transactions.

A message will display the concurrent request of the recurring intercompany generation.

In this example, since the recurring transaction definition had a status of Review, it can now be reviewed or approved in the Intercompany Transactions window. To query the transaction at the Receiving subsidiary, change to the appropriate responsibility for that subsidiary.

Navigate to: Transactions>Enter

Enter search criteria and click the Find button. Locate the appropriate transactions by pressing your Down arrow key.



Review the transaction before approving or rejecting.

The recurring transaction was not subject to auto accounting rules, because it was generated with a status of Review. The department on the sender distribution line is 120; the receiver distribution department is 140. The auto accounting rule for the sender distribution specifies to copy the department from the sender distribution line.





Run the Intercompany Transfer Program

It is recommended that this program be run at least once at the end of each period. It produces the journal entries which support the intercompany transactions that were approved. It will also remove all transactions that were not approved and have a status of Delete from the GIS system.

The Intercompany Transfer Program must be run for each subsidiary that is either a receiver or sender
of an intercompany transaction. Access the appropriate General Ledger responsibility for subsidiary sender or receiver.

Navigate to: Report>Request>Standard




Select the Program - Intercompany Transfer. Specify the following parameters:

Run Journal Import: The default Yes will automatically import after transfer completed
Create Summary Journal Default No for detail lines. Select Yes for summary lines.
Period Enter desired period for transactions

Click OK, then click the Submit button on the Submit Request window.

Running this program will populate the GL_INTERFACE table with all the approved intercompany transactions for which your subsidiary was the sender or receiver.

Review the report that the transfer process generates: Intercompany Transfer Execution Report. The report lists the transactions that were successful transferred to the journal table, and those transactions that errored during the process.

After running the transfer, you can query by selecting the Source of Intercompany and the Period in the Enter Journals window to view the intercompany journal entries.

Navigate to: Journals>Enter



Click on the Find button.



Notice the intercompany journals are not posted. The intercompany journals must now be posted through the standard posting methods outlined in the R2i document GL Journal Posting Training.


Delete Intercompany Transactions

Run this program periodically to delete old previously approved intercompany transactions that have been posted to the general ledger.

Navigate to: Report>Request>Standard

Select the concurrent program named Program – Delete Intercompany Transactions.



In the Parameters window, enter the Cutoff Days. This is the number of days preceding the current date for which transactions are retained.

Your organization’s retention requirements will determine what cutoff range is appropriate. In the example above all previously Approved and posted intercompany transactions older than 90 days from the current system date will be deleted. General retention requirements, the level of activity, data storage limitations, and input from your system administrators should assist you in determining the most effective range. Regardless of what cutoff range is appropriate it would be a good business practice to store each month’s ending Intercompany reports. They should be retained for the same duration as other system-generated general ledger reports.

Note: Only a GIS subsidiary with parent privileges can run the Delete Intercompany Transactions program.

Intercompany Reports

The Global Intercompany System provides the following reports:

• Intercompany Transactions Detail
• Intercompany Unapproved Transactions
• Intercompany Transactions Activity Summary

Run the reports each week and review them. The reports will provide detailed information about the status of documents you have sent or received. The reports provide information such as transaction number, transaction date, transaction status, the Sender and Receiver, selected accounts, amounts, currency, exchange rate, converted values, and error messages.