Intra-company Transfer Pricing using SAP Material Ledger

Intra-company Transfer Pricing using SAP Material Ledger

Previous to SAP Material Ledger, implementing a process of Transfer Pricing in SAP for intra-company transfers used to be a mini-project comprising writing a bunch of custom codes, tweaking some configuration and possibly coding some user exits. This process can also be achieved thru a complex set of “internal” sales & purchase order process with a more complex web of pricing, custom codes, and accounting entries.

With Material Ledger achieving some stability in newer versions of SAP, there is a better simpler standard SAP way of implementing Transfer Pricing. I implemented this functionality for the first time in R/3 version4.5. It was not without bugs then; but the functionality did provide a viable solution to the business requirements of the customer. Since then, SAP Material Ledger has come a long way.

This blog is a simple introduction / a case study of how SAP Material Ledger can achieve intra-company Transfer Pricing with very little configuration, and lesser data maintenance.

Please drop me an email or post a comment if you want clarifications.


Rajesh has SAP Transfer Pricing using Material Ledger at two of his customers. Both customers are in the Manufacturing industry and used Rajesh’s expertise to build a transfer price model to transfer intermediate products from one business units to finished product in other business units. Rajesh has 12 years experience implementing SAP / IT / BPM Finance solutions for several customers globally; he also has 7 years experience working in the business in Finance and Accounting functions. His business process knowledge combined with his IT expertise enables him to provide his customers with best-of-breed advise on business process / IT implementations.

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  1. Dear Mr Rajesh Shanbhag, I am writting to you because I am very interesting about Intra-company Transfer Pricing using SAP Material Ledger, I wondering if it would be possible to have from you some kind of procedure about the requirement configurations.
    I am studying SAP and I am working in a project about a Company which have many Centers and they want to know how is the cost without the virtual benefit of their internal sales.

    Thanks in advance,

    Maria Alejandra

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