INTERNAL ORDER PROCESS

Date: 12-04-2024
AGENDA

 INTRODUCTION OF INTERNAL ORDER

 INTERNAL ORDER MASTER DATA
 STATUS MANAGEMENT
 INTERNAL ORDER TYPES
 SETTLEMENT OF INTERNAL ORDER TO AUC ASSET
 CONCLUSION

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 INTERNAL ORDER MASTER DATA
An internal order is utilized to accumulate costs for a specific
project or task within a defined timeframe, typically with a
specific deadline. It aids in tracking expenses related to specific
purposes, such as

 Projects
 Marketing
 Campaigns
 Research and development initiatives

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 STATUS MANAGEMENT FOR ORDER
CRTD- This means the order is under planning stage and not
open for posting

REL- this means order status will be released ready to post the
cost.

LKD - In this status you cannot carry out any business

transactions except for resetting the lock.

SETC (Settlement rule created): This status is set

automatically by the system if you created a settlement rule.

BUDG: Budget available

ISBD: insufficient budgeted

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INTERNAL ORDER TYPES
The Internal Orders are functionally divided into two categories,

Real Order which can further settled the collected cost to others cost objects Statistical Order which cannot further settled the collected cost and use for only
Eg: Fixed Asset or Cost Centers monitoring purpose.
Examples: of real orders are Overhead Orders and Investment Order Example: of Statistical Order includes Order with revenues

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SETTLEMENT OF INTERNAL ORDER TO AUC ASSET
As per business requirement we need to create an Internal Order to track all the capital expenses for the new Asset. The
expenses should be booked and accumulated in assets under construction till the completion of the building. Once the
building is completed all the expenses should be transferred to Fixed Assets.

Asset Under Construction Through Internal Order:

AUC is Asset under construction where some assets are in construction phase and cost needs to capture through internal
order for the time being. Once asset is fully completed then cost would be transferred to another cost object (E.g., Cost
centre) and settle with final asset.
Example: XYZ company imported machinery from abroad which requires installation while installation activities like
assembling, trial, testing, services will take 6 months, so for these installation activities many expenses are incurred, Till
the time it is created we cannot charge it in Machinery account hence we need to create AUC account where cost will be
stored.

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PROCESS FLOW

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GL entry posted after settling internal order to the AUC asset GL entry posted after settlement of AUC Asset to main asset

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SETTLEMENT OF ASSETS UNDER CONSTRUCTION TO FINAL ASSET

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THANK YOU