Distribution Cycle between different company codes

[Former Member]

Hi experts;

I have one company code with many cost centers and at end of the year we need to distribute all of the incurred expenses on such company code to another many company codes with different cost centers.

I found some related issues on forums but answer was not pretty clear and I found that I should have activated Cross Company posting at the CO. I do not know whether it is something mandatory or not and if yes, how to do that.

Ex:

Company Code 1000

Cost Center X    20000 USD

Cost Center Y    30000 USD

Cost Center Z    50000 USD

So the total is    100,000 USD to be distributed on another company codes

Company Code 2000

Cost Center K    This cost center to carry 15,000 USD

Cost Center L    This cost center to carry 10,000 USD

Company Code 3000

Cost Center A   This cost center to carry 30,000 USD

Cost Center B   This cost center to carry 20,000 USD

Cost Center C   This cost center to carry 25,000 USD

If it can be done can you kindly guide how to do and what are the prerequisites.

Thanks in advance;

Kind regards;

Ahmad Mahmud;

[Paulo_Vitoriano · Accepted solution]

Hi Mahmud,

As a starting point Company codes have to belong to the same Controlling Area.  Also you will need to setup a clearing account between company codes to keep it balanced for each of the companies. Check the Reconciliation Ledger settings.

Please note that from the legal and statutory perspective cost allocation between legal entities is normally done with invoicing flow, therefore the scenario you are talking about is almost obsolete in the real life.

Regards,

Paulo

[Former Member]

Hi Mahmud,

You can directly do distribution assessment to transfer cost between cost center from different company codes. Cost center are assigned under cost center hierarchy at controlling area level.

Do the distribution or assessment process and check.

BR, Srinivas Salpala