Intercompany Operations Q&A Sample Data
Q: What is our standard lead time for intercompany orders? A: Our standard lead time for intercompany orders is 2-3 weeks from order confirmation to delivery. Express shipping is available for an additional 15% fee, which reduces the lead time to 5-7 business days.
Q: What are the current payment terms for intercompany transactions? A: Standard payment terms are Net 30 for established subsidiaries. New entities require payment within 15 days until they establish a credit history.
Q: How do we handle transfer pricing between subsidiaries? A: Transfer prices are set using the cost-plus method with a 5% markup for manufacturing costs and 8% for finished goods. All transfer pricing must comply with local tax regulations and OECD guidelines.
Q: What is the process for requesting inventory transfers? A: Inventory transfer requests must be submitted through the SAP system at least 10 business days in advance. Include the item code, quantity, source location, and destination location. Approval is required from both the sending and receiving warehouse managers.
Q: Are there minimum order quantities for intercompany purchases? A: Yes, minimum order quantities vary by product category: Raw materials - 500 units, Components - 200 units, Finished goods - 100 units. Exceptions can be approved by the regional supply chain manager.
Q: How are currency exchange rates determined for intercompany transactions? A: We use the monthly average exchange rate published by our corporate treasury department. Rates are locked in on the 1st of each month and apply to all transactions that month.