Intercompany Purchases and Returns: To Process an Intercompany Purchase

The following activity will walk you through the process of selling an item from one company to another company within the same tenant.

Story

Suppose that the Head Office of the Muffins & Cakes company has to purchase two new juicers from the Service and Equipment Sales Center of SweetLife Fruits & Jams. The system administrator has set up the intercompany sales functionality to enable generation of sales orders based on purchase orders, purchase receipts based on shipments, and AP bills based on AR invoices.

Acting as a purchasing manager of Head Office of Muffins & Cakes, you need to create a purchase order to the SWEETEQIP branch.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

• On the Enable/Disable Features (CS100000) form, the following features have been enabled:
  • Standard Financials
  • Multibranch Support
  • Multicompany Support
  • Advanced Financials
  • Inter-Branch Transactions
  • Inventory and Order Management
  • Inventory
• On the Companies (CS101500) form, the MUFFINS and SWEETLIFE companies have been defined.
• On the Branches (CS102000) form, the SWEETEQUIP and MHEAD branches have been defined.
• On the Stock Items (IN202500) form, the JUICER35 inventory item has been configured.
• On the Warehouses (IN204000) form, the MHEADWH warehouse has been created and specified for the MAIN location of the MHEAD branch.

Process Overview

In this activity, you will first review the intercompany sales settings on the Sales Orders Preferences (SO101000) form. On the Vendors (AP303000) form, you will specify the warehouse of the Muffins & Cakes company as the default one for the SWEETEQUIP vendor. On the Purchase Orders (PO301000) form, you will create a purchase order from Muffins Head Office & Wholesale Center to Service and Equipment Sales Center, specifying SWEETEQUIP as the vendor, and save the purchase order. You will then cause the system to generate a sales order based on the purchase order on the Generate Intercompany Sales Orders (SO504000) form. When the sales order is generated, on the Sales Orders (SO301000) form, you will create and confirm a shipment for this sales order, and then you will cause the system to generate a purchase receipt based on the shipment on the Generate Intercompany Purchase Receipts (PO504000) form. You will then create a sales invoice by clicking Prepare Invoice on the form toolbar of the Shipments (SO302000) form. You will release the sales invoice on the Invoices (SO303000) form, and it will become visible on the Invoices and Memos (AR301000) form as an AR invoice. You will cause the system to generate an AP bill on the Generate Intercompany Documents (AP503500) form and release this bill on the Bills and Adjustments (AP301000) form.

System Preparation

Before you begin performing the steps of this activity, do the following:

1. Launch the MYOB Acumatica website with the U100 dataset preloaded, and sign in as an accountant Nenad Pasic by using the pasic username and the 123 password.
   Note: For simplicity, you perform all steps of this activity under the username which has access to both Service and Equipment Sales Center and Muffins Head Office & Wholesale Center branches. However, in a production environment, the steps for different branches may be performed by different users.
2. In the info area, in the upper-right corner of the top pane of the MYOB Acumatica screen, make sure that the business date in your system is set to 1/30/2024. If a different date is displayed, click the Business Date menu button, and select 1/30/2024 on the calendar. For simplicity, in this activity, you will create and process all documents in the system on this business date.
3. On the Company and Branch Selection menu on the top pane of the MYOB Acumatica screen, select the Muffins Head Office & Wholesale Center branch.
4. Make sure the SWEETEQUIP branch has been extended as a vendor and the MHEAD branch has been extended as a customer, as described in Intercompany Sales: Implementation Activity.

Step 1: Reviewing the Sales Order Preferences

To review the type of sales orders that will be used for intercompany sales, do the following:

1. Open the Sales Orders Preferences (SO101000) form.
2. On the General tab, in the Intercompany Order Settings section, review the following settings:
   • Default Type for Intercompany Sales: SO - Sales Order

     This is the type of sales order that the system will use by default when creating an intercompany sales order.

   • Default Type for Intercompany Returns: RC - Return for Credit

     This is the type of an order that the system will use by default when creating an intercompany return.

Step 2: Specifying the Default Warehouse for the Vendor

To specify the warehouse of the Muffins & Cakes company as the default warehouse for the SWEETEQUIP vendor in the MHEAD branch to which you are currently signed in, do the following:

1. Open the Vendors (AP303000) form.
2. In the Vendor ID box, select SWEETEQUIP.
3. Go to the Purchase Settings tab.
4. In the Warehouse box (Shipping Instructions section), select MHEADWH.
5. On the form toolbar, click Save to save your changes.

Step 3: Creating an Intercompany Purchase Order

To create an intercompany purchase order, do the following:

1. Open the Purchase Orders (PO301000) form.
   Tip: To open the form for creating a new record, type the form ID in the Search box, and on the Search form, point at the form title and click New right of the title.
2. Click Add New Record on the form toolbar, and in the Summary area, specify the following settings:
   • Type: Normal
   • Vendor: SWEETEQUIP
   • Date: 1/30/2024 (inserted automatically)
   • Description: Purchase of juicers
3. On the Details tab, click Add Row on the table toolbar and specify the following settings for the new row:
   • Branch: MHEAD
   • Inventory ID: JUICER35
   • Warehouse: MHEADWH (inserted automatically based on the selected vendor)
   • Order Qty.: 2
   • Unit Cost: 1200
   • Ext. Cost: 2,400 (calculated automatically)
4. On the form toolbar, click Remove Hold to save the document with the Open status.

Step 4: Generating an Intercompany Sales Order

To generate an intercompany sales order, do the following:

1. Open the Generate Intercompany Sales Orders (SO504000) form.
2. In the only line, select the unlabeled check box and click Process on the form toolbar.

   The system generates a sales order with the SO type and Open status for the MHEAD customer and automatically copies the relevant settings and the line details of the originating purchase order.

3. In the dialog box, which opens, click Close.
4. On the Purchase Orders (PO301000) form, open the purchase order that you have created in Step 3 (the top record in the list on the Purchase Orders (PO3010PL) list of records).
5. On the Other tab, notice that the system inserted the number of the generated sales order into the Related Order Nbr. box. This number is a link to the sales order.
6. Click the link in the Related Order Nbr. box. The system opens the sales order on the Sales Orders (SO301000) form.
7. Review the sales order.

   Notice that MHEAD is specified in the Customer box for this order. On the Details tab, SWEETEQUIP is specified in the Branch column and the order details have been copied from the originating purchase order. On the Shipping tab, notice that the system has inserted the number of the originating purchase order in the Related Order Nbr. box (the Intercompany Purchase section). This number is a link to the purchase order.

Step 5: Creating a Shipment

To generate a shipment for the intercompany sales order, do the following:

1. While you are still viewing the sales order for the MHEAD customer, on the form toolbar, click Create Shipment.
2. In the Specify Shipment Parameters dialog box, which opens, make sure that 1/30/2024 is selected in the Shipment Date box and EQUIPHOUSE is selected in the Warehouse ID box, and click OK.
3. The system creates a shipment for the sales order and opens it on the Shipments (SO302000) form.
4. On the form toolbar, click Confirm Shipment.

Step 6: Creating a Purchase Receipt

Step 7: Creating a Sales Invoice

To prepare a sales invoice for the shipment, do the following:

1. On the Shipments (SO302000) form, open the shipment that you created in Step 5.
2. On the form toolbar, click Prepare Invoice.

   The system creates a sales invoice for the shipment and opens it on the Invoices (SO303000) form.

3. On the form toolbar, click Release.

   The system assigns the Open status to the sales invoice and makes it visible on the Invoices and Memos (AR301000) form as an AR invoice.

Step 8: Creating an AP Bill

To create an AP bill, do the following:

1. Open the Generate Intercompany Documents (AP503500) form.
2. In the only line, select the unlabeled check box and click Process on the form toolbar.

   The system generates an AP bill. The line in the AP bill is linked to the lines of the purchase order and purchase receipt that you have created in Steps 3 and 6.

3. In the dialog box, which opens, click Close.
4. On the Bills and Adjustments (AP301000) form, open the bill with the SWEETEQUIP vendor and the 1/30/2024 date.
5. On the form toolbar, click Remove Hold, and then click Release to release the bill.
6. Return to the purchase order to SWEETEQUIP on the Purchase Orders (PO301000) form, and review its details.
   Notice that the order now has a status of Closed, as shown in the screenshot below. On the PO History tab, notice that the information about the purchase receipt and AP bill that were prepared for the order is displayed. According to this information, the purchased items have been received to inventory of the Muffins Head Office & Wholesale Center branch and billed in full, so the intercompany purchasing process is completed.