Financial Orchestration Flows

You can use a financial orchestration flow to do the following:

• Manage the internal trade relationships that exist between two entities. These entities might reside in the same organization but in widely dispersed physical locations, including in different countries.

• Define the trade relationship that exists between two entities, including business rules, internal controls, regulatory compliance, and other terms and conditions. You can use these controls to run, monitor, and evaluate the transactions that occur in the trade relationships that exist between two entities.

• Orchestrate supply chain events that occur as the result of a transaction that is associated with a financial orchestration flow. This includes events that this flow receives from an external source application.

• Start tasks in an external application that is part of the financial orchestration flow.

• Create a series of financial movements of goods that can provide equitable distribution of the product margin to the countries and tax jurisdictions that are involved in a transaction.

• Set a date that indicates when to start using a financial orchestration flow. This dating enables you to configure Financial Orchestration so that it creates transactions that are associated with a source document that occur before the date when the modified financial orchestration flow goes into effect. Financial Orchestration can also associate transactions with this flow when your source system creates the source document after this date.

Primary Routes

A primary route indicates an agreement to transact goods and services between the two primary profit center business units. The start node represents the internal seller and end node represents the internal buyer. A financial orchestration flow can have more than one primary route. The terms and conditions of financial settlement are defined as part of financial route. In the primary route in a financial orchestration flow, you can specify the start and end business units.

The start and end business units of a primary route may differ based on the business process type of the financial orchestration flow.

The following table lists the start and end business units of a primary route.

Business Process Type	Start Business Unit	End Business Unit
Procurement	Sold to Business Unit	Receiving Business Unit
Shipment	Shipping Business Unit	Selling Business Unit
Internal Transfer	Shipping Business Unit	Receiving Business Unit

Each primary route may have one or more financial routes. During the financial orchestration process, a primary route is first identified for each source order. If a financial orchestration flow does not have multiple intermediary financial organizations under the primary routes, you can use a simplified view in the Create Financial Orchestration page. This is the default view. You can use a combined table to define the primary and financial routes.

If a financial orchestration flow has multiple intermediary financial organizations under the primary routes, select the Separate Primary and Financial route check box to view the primary and financial routes separately in the Create Financial Orchestration page.

Financial Routes

A financial route contains the terms and conditions that determine the nature of the intercompany transaction, such as the documentation, accounting and pricing rule to use.

Each primary route must have at least one financial route. You could optionally specify the sell side and buy side tax determinants. This is used to calculate the taxes in the intercompany receivables invoice and intercompany payables invoice respectively. You must provide a receivables invoice type, a credit memo type and payment terms when intercompany invoices have to be created between the selling and buying business unit of the financial route. There can be more than one financial route for a primary route when one or more intermediary business units are expected.