Worked Example of Import of Goods using Internal Material Transfer

This shipment occurs when sale to customer in Brazil is fulfilled through the ORGPACT purchase.

The following figure provides information on the import of goods workflow.

The import of goods includes the following tasks:

• Import Fiscal Document Task Flow (NF1)

• Warehouse Delivery Fiscal Document Task Flow (NF2)

• Sales Fiscal Document Task Flow (NF4)

• Warehouse Issue Fiscal Document Task Flow (NF5)

Import Fiscal Document Task Flow (NF1)

The Brazilian headquarters receives a sales order from the customer and the goods required by the customer is available in its overseas branch say in its US branch or the goods are sourced from an external manufacturer. A requisition is created in the Brazilian organization to get goods from overseas.

1. An Internal supplier generates a transfer order for shipment of items to the Brazilian organization. For an organization like Supplies OG, the transfer order is created by the US organization for internal manufacturing and by ORGPACT for external manufacturing.

2. Based on this transfer order, the head office situated in US uses the supply chain management financial orchestration (SFO) application to generate a shipment with various trade events.

   The trade events depend on the following:

   • The transfer price is available in the source organization either in the price list or as item cost.

   • The transfer price at each of the SFO nodes include the necessary applicable taxes.

   • There's no specific requirement to build any tax calculation or tax uptake capability in the intermediate nodes.

   • The shipment is a FOB shipment. This implies that as soon as the shipment happens, the SFO trade events are generated and intercompany accounting is created at all intermediate nodes up to the destination organization.

3. The shipment is shipped from the overseas branch to Brazil.

4. A broker at customs receives the shipment on behalf of the Brazilian organization and the broker creates an import fiscal document NF1, by taking the destination intercompany invoice transfer price as source for the fiscal document. Broker sends fiscal document to the fiscal document specialist.

5. The fiscal document specialist captures fiscal document and validates its quantities, prices, and taxes against available system information.

   The NF1 fiscal document flow or the import fiscal document flow is very similar to internal material transfer flow. The import fiscal document is based on the ORGPACT commercial invoice. The transfer price and amount matches the item price and amount on the NF1 fiscal document. The NF1 fiscal document can be imported through an XML import or by manually entering the information in the fiscal document capture application.

   This import fiscal document can contain charges and taxes. Any charges, SISCOMEX, broker charges, and so on are modeled as overheads and if required these charges can be assigned as part of the inventory value. The charges that are incurred by broker are sent and are captured as an accounts payables Invoice. In the user interface, all charges other than the 'SISCOMEX' charges are marked as included in item price.

6. On successful completion of validation process, fiscal information is transferred to the receiving application, which creates a transfer order receipt.

   The transfer order receipt is costed based on the prices and taxes contained in the import fiscal document.

7. Once the NF1 fiscal document is created, the NF1 fiscal document is sent to SEFAZ for approval and the tax aspect of the fiscal document is validated.

   The structural validations and tolerance validations are applied for NF1 fiscal document as follows:

   • Source document quantity tolerance is checked between shipment transaction and fiscal document.

   • Price tolerance is checked between the price or amount on SFO transfer price and fiscal document. This check is in the Brazilian currency; therefore, there is no requirement to do currency conversion.

8. Once the goods are moved, the NF1 fiscal document is approved, and the goods are fully received, then in the receiving application, a receipt is generated as a transfer order receipt against the transfer order number. If there are multiple shipments on a fiscal document, then there would be multiple transfer order receipts. For example, if there were two shipments on a fiscal document, then there would be two transfer order receipts.

   The fiscal document information isn't transferred to Payables. Invoicing for the purchase is performed in SFO and this intercompany invoicing is used to settle the internal accounts payables liability.

   The following fiscal documents are created to complete the import and delivery of goods to customer:

   • NF2 - Warehouse Transfer, this fiscal document is generated in the fiscal document generation system based on import material transfer. This document reports custody transfer from Supplies OG to TPL ORG.

   • NF4 - Sales, this fiscal document is generated in the fiscal document generation system based on sales fulfillment. This document includes information on sales amount plus Brazil taxes and charges. This document is included with the physical shipment to customer.

   • NF5 - Third Party Logistics Warehouse Issue, this fiscal document is an interorganization transfer to move items to the Brazilian headquarters. This document is generated by TPL ORG. This fiscal document reports custody transfer from TPL ORG to Supplies OG. This document is captured in the Fiscal Document Capture work area and is used for the purpose of fiscal reporting.

Warehouse Issue Fiscal Document Task Flow (NF5)

This task flow includes the following activities:

1. When the items for a sales order are available for shipment to Supplies OG's customer, TPL ORG advises Supplies OG of the pending shipment.

2. Supplies OG generates the sales fiscal document for the sales order. The sales fiscal document is transmitted to TPL ORG through email.

3. TPL ORG generates its warehouse issue fiscal document (NF5), referencing the sales fiscal document (NF4) number. This fiscal document lists the items that TPL ORG is transferring custody back to Supplies OG through a shipment to Supplies OG's customer.

4. TPL ORG ships the items to Supplies OG's customer. The shipment documentation includes a copy of the sales fiscal document that Supplies OG sent to TPL ORG.

5. TPL ORG sends a copy of its warehouse issue fiscal document to Supplies OG. TPL ORG is required to send this fiscal document within ten days of the shipment.

6. The Fiscal Document Capture work area captures key details of the warehouse issue fiscal document so that the fiscal document can be associated to a specific internal receipt transaction and its related accounting in the system.