Centralized Procurement Billing

Procurement billing services can be centralized without requiring financial orchestration flows which simplifies both the process and the accounting.

Key components of centralized billing are:

• Bill-to business unit (BU) as invoice processing party

• Sold-to legal entity (LE) as the liable party

• No inter-company invoices required

Bill-to Business Unit

This is the business unit which vouchers supplier invoices for a received purchase order. A single bill-to BU can serve as a centralized invoice processing party for multiple requisitioning business units. The bill-to BU on the purchase order is derived from the bill-to BU specified on the supplier site assignment for the requisitioning BU on the purchase order.

Sold-to Legal Entity

This is the legal entity that's financially responsible for the purchases on a purchase order and is specified on that purchase order. So even though the invoicing is handled by another party the liability for the purchase remains with this legal entity.

Inter-company Invoices

Using this method of centralized billing means that no inter-company invoices are required. Accounting for the purchases are managed through standard general ledger journal entries.