A cross company code payment happens when a company code within the group (Paying Company Code) for some business reason, pays the open items of another company code (s) (Sending Company Code).
This post discusses the configuration settings involve in Cross Company Code Payments and its pre-requisites. It also includes explanation to end users on points to note when executing the automatic payment run (F110) for cross company payments.
It is important that these conditions are present before you attempt cross company payments between company codes:
1) The paying company code and the sending company code (the company code whose open item is being paid) must have the same local currency and if applicable, same parallel currencies.
If this is not the case you may get the error below if you attempt to do your assignment of paying and sending company codes in your configuration settings
“Company code xxxx is not permitted as the paying company code”
2) The paying company code and the sending company code (the company code whose open item is being paid) must be in the same country.
The following settings should be done in the system before you can execute cross company code payment:
I) Maintain the Cross company code settings
A cross company payment will result in a cross company posting that will record a receivable in the paying company code and a payable in the sending company code. For a cross company postings to happen, irrespective of whether it is a payment transaction (cross company payment), an invoice posting or just a G/L posting etc. this configuration setting has to be in place.
Follow the menu path below, for cross company setting:
IMG — Financial Accounting (New) — General Ledger Accounting (New) — Business Transactions — Prepare Cross-Company Code Transactions
Or use transaction OBYA
ii) Maintain the company code relationship in the payment program setting
The “paying company code” must be define as such in automatic payment program settings (FBZP), and the same applies to the “sending company code”. See the settings below:
Processing a cross company payment through F110
Post an invoice in the Sending Company Code
After all the necessary settings and other pre-requisite are done, post an invoice with FB60, FV60 etc. in the sending company code
Display the invoice posted on the vendor using transaction FBL1N (Vendor line item display) as below:
The Vendor in the sending company code has an invoice posted on it.
Now execute the APP Run (F110)
Note: in the parameter selection during the automatic payment run, the company code to select is the Sending Company Code and the Vendor is also the vendor of the Sending Company Code on which the invoice is posted.
However, in the edit proposal the house bank and the house bank account to select will be the one for the Paying Company Code (hence the cross company situation) as below.
Payment run successfully executed.
As can be seen below, two documents are generated by the payment run, one in the paying company code and the other in the sending company code. See below:
In addition, if you display one of the documents you will see a third document, which is the cross company document. See below:
Display the cross company document with FBU3 to see the complete posting in one display.
As you can see the Vendor in the sending company code is debited and the House Bank account in the paying company code is credited .The intercompany account between the two company codes is debited in the paying company code (representing a receivable) and credited in the sending company code representing a payable (to the paying company code).
Note: That if a company code is defined as a sending company code in APP configuration you cannot now pay open items from that company code through APP, all the open items on this company code have to be paid through the paying company code defined for it in configuration. If for any reason you want to do this, you have to change the configuration and define the company again as a paying company code.