#Flexible expenses vs periodic professional#

Hence, we need a second part: The intercompany billing. However, no taxes are posted during the intercompany cost posting, nor revenues, receivables and payables. Thus, the intercompany cost posting covers the requirement for enhanced cost analysis – in both the sending and the receiving company. On the sender object you get the debit of the sending cost center with a link to the cost object in the other company code, which has the received the service.You can directly trace the costs of the receiver object back to the sender object.The same applies to expenses recorded in Concur: here, the trip data is important for the project If the recipient is a customer project using resource-related billing, information such as the activity type, the service rendered date, the employee and the employee’s note must be transferred, so that this data is available for the itemization of the billing document.

The direct intercompany posting provides much more detailed information on the receiver side.

This is particularly essential in case on the receiver object runs a subsequent time and material billing, which can start immediately after for example time or travel confirmation.

The costs are immediately visible on the receiver.

Compared to a scenario in which the costs are first collected in the supplying company and then periodically invoiced to the ordering company, direct cross-company posting has several advantages from a cost analysis perspective: Let us present a process overview in figure 1.Ī complete end-to-end intercompany CO allocation scenario consists of two parts: the intercompany cost posting and the periodic intercompany billing.įigure 1: General overview for intercompany cost postings using the example of activity allocationįirst, let’s have a look on the intercompany cost allocations.

#Flexible expenses vs periodic professional#

Especially professional service organizations are familiar with this situation, since they have consultants located across the world – as well as customer projects that are set up around the globe. As organizations become more global, it is becoming increasingly common for employees to charge time to a different legal entity. As a consequence, intercompany cost allocations and billing processes are on the rise.

Overview and guiding principles of intercompany cost allocations in S/4HANA CloudĬompanies are intensifying their cooperative relationships in today’s global economy, for example by setting up shared services. Finally in the third section, we will see how the cost postings are billed to the receiver company at period end. We will look at the configuration for clearing account determination. Then in the second section we will give an overview about the types of cost allocations, that are enabled for cross company postings, and we will analyze the generated journal entries. In the first section we will explain the guiding principles to meet the related requirements of cost management, legal and group reporting. In this blog Sebastian Doll and I would like to show you the general process overview for intercompany cost allocations and the resulting periodic intercompany billing. Entertainment costs can usually be broken down further into categories such as a cable television subscription, music downloads, dinners at restaurants, and vacations.Welcome to our blog about intercompany cost allocations and how they are handled in S/4HANA Financial Accounting. When financial advisors counsel individuals, they routinely ask them to estimate their expenses, separating those that are necessary and non-negotiable, like mortgage and car payments, and those that are flexible, like entertainment costs. To note your flexible expenses, review your credit card and checking account statements every month to see what non-essential items you are spending money on.To create a budget and stick to it, it is critical that both fixed and flexible expenses are included.Even inflexible expenses can contain flexible components, such as choosing more affordable substitutes.Flexible expenses stand in contrast to fixed expenses, also known as inflexible expenses.In personal budgeting, a flexible expense is a non-essential expense that can be cut back or eliminated.