Prerequisites for Setting Up Business Unit Options for Cross-Charge Transactions

Before you can set up the cross-charge options during business unit implementation to enable cross-charge transactions within a business unit and between business units, you must complete prerequisite setup steps.

Prerequisites for Creating Cross-Charge Transactions

You must define the following objects before you can create cross-charge transactions.

• Legal entities, including setting up accounting and associating the balancing segment values to the legal entity.

• Business units with the project accounting business function.

• Organizations and organization hierarchies that share resources.

  Note: If you use organization hierarchies, the application uses the project expenditure organization hierarchy, and the project and task owning organization hierarchy, to determine the transfer price defined for the provider organization and receiver organization combination.

Prerequisites for Borrowed and Lent Processing Method

You can implement the Borrowed and Lent processing method of creating cross-charge transactions after defining the following objects.

• Transfer price rule and schedule

• Either a rate schedule or burden schedule, based on the transfer price rule

Prerequisites for Intercompany Billing Processing Method

For the Intercompany Billing processing method of creating cross-charge transactions, set up at least one of the following schedules.

• Rate schedule

• Burden schedule

• Transfer price rule and schedule