Invoicing behavior for intercompany transactions is controlled by the Intercompany Transaction Type. The transaction type determines whether the intercompany transaction is transferred directly to General Ledger or whether it requires invoicing through Receivables and Payables. This is why the invoicing option must be selected for the relevant transaction type, not merely in system options or on the intercompany organization. Assigning Receivables and Payables business units is necessary when invoices are required, but that assignment does not itself enable invoicing for the transaction flow. The key setup decision is made at the transaction type level. Oracle documentation explains that intercompany transaction type attributes determine whether transactions are sent to General Ledger or require invoice generation in Receivables and Payables.