1. Presentation to OAUG - SIG
Atlanta
21-Oct-2005

2. Inter – Company Transactions

3. Agenda Overview of Inter-Company Transactions Organization Structure
Business case – Solution

4. Inter-company Transactions
Movement of Goods :
Between Divisions belonging to Same Legal Entity
Across more than one Legal Entities within US
Across Many International Subsidiaries
Single face to Customer (One Selling Company – Multiple Internal Supply Companies)
Selling Company Books Order & Raises Bills on Customer
Supply Company drop-ship goods directly to Customer warehouse.
Intercompany Billing between Selling and Supply company.
Multiple Selling Companies – Single Supply Companies
Multiple Selling Companies – Multiple Supply Companies
Cross Charging for Goods & Services across Projects
Inter-project Billing between projects owned by different legal entity.
Intercompany Journals
Shared Bank Accounts across Legal Entity :
To receive Customer payments
To disburse Supplier Payments

5. Business Case Single face to Customer
Single Selling Company – Multiple Supply Companies
Multiple Selling Companies – Multiple Supply Companies

6. Why Single Face to Customer ?
1. What the customer was seeing before…multiple legal entities, no single interface
Customer
LE 1
LE 2
LE 3
LE 4
LE 5
LE 6
2. Multiple businesses servicing a single customer order…time consuming internal negotiations
Customer
LE 1
LE-3
LE-2
LE-4
3. Multiple acquisitions…many faces to the customer. ITO / Application confusion etc.
LE-1
LE-3
LE-4
LE-5
LE-6
LE-2
Customers
Customer desired a single ITO face…One Brand

7. New Simplified Organization / LE Structure
“New” Organizational / Legal Entity Structure HR
Legal IT
Primary Objectives
Single Face to Customer
Compliant Legal Structure & Branding
Rationalize multiple USA Benefit Plans
Re-align people to operational owners
Single ITO Platform
Parent Company
Finance
Leadership
Commercial Statutory Entity - CSE
(Selling Company – Customer facing)
Sample
LE - 1
LE - 2
LE - 3
Future
Acquisitions
(US / Non-US)
Product
Line
Product
Line
Home Base Statutory Entities - HBSE
(Supplying Company – Fulfillment Center)

8. Oracle Solution : Multi – Org Structure & Transaction Flow (Within US)
AR Invoice
USD
Set of Books
Shipment
Set of
Books
Sales Order
Legal
Entity
LE - US
Selling OU
IC-AR
Operating
Unit
Supplying OU
IC - AP
Demand
Inventory
Organization
Average
Cost
Entity 1
Average
Cost –
Entity 2
Average
Cost-
Entity - 3
Average
Cost -
Entity - 4
Sub-
Inventories
Sub - Inv
Sub - Inv
Sub - Inv
Sub - Inv
…..

9. Consolidation Set of Books (Financial Consolidation + I/C Elimination)
Oracle Solution : Multi – Org Structure & Transaction Flow (Intl. Outside US)
Consolidation Set of Books
(Financial Consolidation + I/C Elimination)
MRC USD Set of Books
Sales Order
AR Invoice
USD
Set of Books
Non-USD
Set of Books
MRC
Set of
Books
Shipment
Intercompany AP
Intercompany AR
Legal
Entity
LE - US
LE –
Non-US
Operating
Unit
Selling OU
Supplying OU
Supplying OU
Demand
Inventory
Organization
Average
Cost
Entity 1
Average
Cost –
Entity 2
Average
Cost-
Entity 3
Average
Cost -
Entity 4
Average
Cost
Entity 5
Sub-
Inventories
Sub - Inv
Sub - Inv
Sub - Inv
Sub - Inv
Sub - Inv

10. Select One of the Fulfillment Org as Shipping Warehouse on Sales Order
Oracle Solution : Process Flow Diagram Supply Chain Model - Selling Company (Order Management)
Select One of the Fulfillment Org as Shipping Warehouse on Sales Order
CSE –
Selling OU
Generate
Progress
Bill Cycle from Receiver Project to Customer
Book
Order
Auto invoice Import
Run
Create Inter-company AP Invoice
Import
Inter-Company AP invoice
Create
Receiver
Project
Inter-
company
Invoice
Settlement
&
Elimination
Ship Goods to
Customer
Run
Create Inter-company AR Invoice
Custom Program updates the Inter-Co Inv Amount
Auto Invoice Import Inter-company
HBSE –
Supplying OU
Manual
Automatic
Manual or Automatic

11. Select One of the Fulfillment Org as Shipping Warehouse on Sales Order
Oracle Solution : Process Flow Diagram Manufacturing Model - Selling Company (Project Accounting)
Book Order
Select One of the Fulfillment Org as Shipping Warehouse on Sales Order
Generate
Progress
Bill Cycle
From Receiver Project
CSE –
Selling OU
Book
Order
Create
Receiver
Project
Generate
Final
Bill and Recognize Revenue
Import
Inter- company
AP Invoice
Inter-
company
Invoice
Settlement
&
Elimination
Generate an Intercompany AR invoice on CSE from Provider Project
Create
Receiver
Project
Accumulate
Cost against
Provider
Project
Ship Goods to Customer
HBSE –
Supplying OU
Manual or Automatic
Manual
Automatic

12. Oracle Solution : Setup Details & Customization Details Selling Company
Supply Chain Model
Manufacturing
Module Involved :
OM, AR, AP, INV )
Modules Involved :
(OM,PA, INV, AR, AP)
Define Intercompany Customer & Supplier
Create Intercompany Relationship in Inventory Module
Setup Auto-accounting Rule in AR
Setup AR Transaction Type and link to Order Transaction Type.
Create Custom Program to calculate Transfer price and update AR Auto invoice Interface table.
Define Intercompany Customer & Supplier
Define Implementation option in PA (Internal Billing)
Define Billing extension. (Optional)
Set up Automatic Billing (Optional).
Setup Auto-accounting Rule in PA
Setup Auto-accounting Rule in AR
Setup AR Transaction Type and link to Order Transaction Type.
Define and link Receiver project & Provider project. (Required)
Create custom program in AP to handle one to many Supplier relationship.

13. Operational Structure – Process Flow & Accounting
CSE Books order from Customer
Order Booking
No Accounting Entries
CSE Assigns order to appropriate HBSE Established TP
Order Assignment
(Internal Demand)
No Accounting Entries
HBSE makes or buys Parts
Make / Buy
Dr. Inventory (HBSE-LE)
Cr. Cash (HBSE-LE)
Ship to Customer
HBSE business drop-ships parts to Customer Warehouse.
Dr. COGS (HBSE – LE)
Cr. Inventory (HBSE-LE)
CSE raises Invoices to Customer.
Invoice to Customer
Dr. External Receivables (CSE-LE)
Cr. External Revenue (CSE – LE)
HBSE raises an Inter-company AR invoice on agreed Transfer Price.
Intercompany AR
Invoice
Dr. Due From CSE (HBSE – LE)
Cr. Internal Revenue (HBSE – LE)
CSE creates an Inter-company AP invoice on agreed Transfer Price
Intercompany AP
Invoice
Dr. Internal COGS (CSE-LE)
Cr. Due To HBSE (CSE – LE)
Intercompany Revenue (HBSE) is eliminated with COGS (CSE)
Due From & Due To Elimination
Intercompany
Settlement &
Elimination
a) I/C Revenue & COGS Elimtn
b) DF/ DT Elimination

14. E-Mail : hari.mundhra@ge.com Phone : +1-678-844-4062
Contact Information
Name : Hari Mundhra
Phone :

15. Disclaimer
This presentation was prepared exclusively for the benefit and internal use of Genpact in order to indicate, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure to any other party. This presentation is incomplete without reference to, and should be viewed solely in conjunction with, the oral briefing provided by Genpact. Neither this presentation nor any of its contents may be used for any other purpose without the prior written consent of Genpact.