NSC|How does Purchase Order using Centralized Purchasing and Billing generates Intercompany Journals

SCENARIO

User is utilizing Centralized Purchasing and Billing in NetSuite and needs to understand how this setup generates intercompany journals. In this arrangement, one subsidiary handles purchasing for another subsidiary, creating efficiencies in procurement and billing processes.

EXPLANATION

When the The Centralized Purchasing and Billing feature this enables users to receive orders and fulfill vendor returns across multiple subsidiaries and
locations.

As per SuiteAnswers Id: 98231, this is the workflow:

In addition to this, Intercompany Journals may be generated via Intercompany Cross Charge. When Intercompany Framework feature is enabled, The cross charge functionality generates cross charges between subsidiaries that provided business services to each other. For example, when one subsidiary creates a sales order and another subsidiary fulfills the order.