Certain prerequisites must be met before you can process inter company sales.

The following data must be defined in Customizing for Sales-

u2022 If you need to use the inter company billing document, billing type IV must be maintained
and assigned to the relevant sales document types

u2022 Output type RD04 is used to enable inter company billing to carry out posting to vendor
account or invoice entry. In the standard system, billing type IV is assigned to output procedure
V40000, which contains this output type.

PRICING:

We need to maintain two pricing procedures RVAA01 & ICAA01. Pricing procedure RVAA01
represents condition type PR00 & any other discounts or surcharges that are meant for end
customer.

We assign Pricing procedure RVAA01 to combination of Sales area (Of Ordering company code)
+ Customer Pricing Procedure + Document Pricing Procedure of Sales document type.

This pricing Procedure (RVAA01) is determined both at Sales Order level & Billing processing for
the end customer. We maintain PR00 condition type to represent the ordering company code's
price to the end customer.

Condition records for PR00 are maintained using organizational elements of Ordering company
code, end customer & the Material.

Eg: Sales Org. of Ordering company code + End customer + Material.

We also need to maintain PI01 condition type to represent costs to Ordering company code (in
other words revenue to supplying company code). It is statistical condition type & meant for
information purpose only.

Condition records for PI01 are created with the following key combination:

Ordering sales Org + Supplying Plant + Material

Pricing Procedure ICAA01is determined at Inter company billing processing level.

Pricing Procedure ICAA01 - Pricing Procedure for Inter company billing is assigned to the
combination of: Sales Area (of supplying company code) + Document pricing Procedure of Billing
document type IV + Customer Pricing Procedure of the Internal customer.

Pricing Procedure ICAA01 has condition type IV01 that represents revenues for Supplying
company code in the inter company billing.

PR00 condition type also appears in Inter company billing document. It is for information
purposes only and does not have bearing on the value of the document.

PI01 represented under pricing procedure RVAA01 is reference condition type for IV01 and the
same is defined in the condition type IV01. Due to this these two condition types represent same
value.
The condition type IV01 in inter company billing document represents revenue to the Supplying
Company. But its corresponding condition type PI01 in the billing document to the end customer
is shown as a statistical item meant for information purposes.

Condition Type VPRS in the inter company-billing document indicates cost to the supplying
company code.

The use of two different condition types in Intercompany billing is necessary to ensure that data
is transmitted correctly to the financial statement (Component CO-PA).