What About Elimination? T-Accounting For Fun!

Ok.  Now I will not explain every single element of all designs.  Certainly an astute design coordinated with SAP ECC GL might even go so far as to allow for Inter company Sales and COGS account for each inter company pairing even though by any measure that is certainly more than necessary.

One must understand that an Inter company Sales transaction through the proper inter company accounts will create entries in FLEX GL that are somewhat easy to interpret.  Take then through BI cubes it is relatively easy to design the transforms to create the INTCO loading of sales/cogs AR and AP.

What you might need to know is Sales and COGs of the seller company are always eliminated in most models and the Profit in Inventory is managed as a statistical account in the BUYER company.  Profit in Inventory based on AMOUNT sold and other factors REDUCES current period COGS and Carrying Balance of Inventory in the BUYER COMPANY.

BPC allows this without having to do Journals for it.   How?  Stay tuned!  I do not mean to reveal every secret in the book in ONE post, but you should begin to get the insight here.  What you have to do is not get TOO TECHNICAL TOO SOON.  This is a T-Accounting exercise and BPC is a fallout statistic of good accounting design coordinated to the ECC backend.

The nature of how BPC eliminates the above entries is reasonably well known among BPCers.  This example will continue and will show how all of this can be done using business rules alone and NO advanced logic.  Flow dimension structure and believe it or not a dimension formula will complete the model.