What is Third PArty PO

[former_member500471]

Dear Gurus,

Will any one help me explain what is Third Party PO., What is diffrence between Standard PO and Third Party PO?

Thanking You

Manoj Kumar

[former_member529134]

Hello

In third-party processing, you place a purchase order with a vendor to deliver goods or perform a service for a third party (for example, for a customer).

This means that your company does not deliver the material. You forward the order to an external vendor instead, who then sends the material directly to the customer and invoices you.

By creating a third-party item in a sales order, purchase requisition, or purchase order, you can request that the vendor sends the goods directly to your customer.

If you do not use the SD component, third-party orders can be handled completely in Materials Management. Here you enter a third-party order (or a purchase requisition) manually with the item category S and account assignment category X(eg. all acc. assignments).

Creating a Third-Party Item Manually

To enter a third-party item in a purchase order without an SD order or purchase requisition, proceed as follows:

Enter a third-party item manually in the same way as the purchase requisition.

After entering the account assignment, you receive a screen in which you can enter the address of the sold-to party.

Enter either the customer number or a delivery address.

Check whether goods receipts can be made for the third-party item. Goods receipts are possible if the goods receipt indicator is set in the item.

Save the purchase order.

Regards

Gregory Mathews

[Former Member]

Third party PO means

you got the requirements from SD stating please procure the material X adn send it to the customer Y

so it means in the std PO you are getting stock in your company but in third party you ask vendor to send the material directly to the customer rather receiving in your storage location.

In third-party processing, you place a purchase order with a vendor to deliver goods or perform a service for a third party (for example, for a customer).

This means that your company does not deliver the material. You forward the order to an external vendor instead, who then sends the material directly to the customer and invoices you.

Third-party processing is carried out in the components SD (Sales and Distribution) and MM (Materials Management). By creating a third-party item in a sales order, purchase requisition, or purchase order, you can request that the vendor sends the goods directly to your customer. A document can consist of one or more third-party items.

Activities

Entering a Sales Order

You enter a third-party item in a sales order. The system automatically creates a purchase requisition item for each third-party item in the sales order.

Entering a Purchase Order to Vendor

You enter a purchase order with a third-party item with reference to the requisition third-party item.

Delivering Goods to Customer

The vendor supplies the goods to the customer. To document this step in the system, you can post a statistical goods receipt in Inventory Management. However, this is not compulsory.

Entering a Vendor Invoice

The vendor sends you an invoice. You enter the invoice receipt in Invoice Verification. The invoice receipt is necessary before a billing document can be created in SD.

Creating a Billing Document for the Customer

In SD, you create a billing document for the sales order. Depending on the Customizing settings (whether or not the billing-relevant indicator is set for the item category in SD), you draw up the billing document on the basis of the order quantity or on the basis of the quantity specified in the vendor invoice. If the customer is billed on the basis of the order quantity, you can create the billing document immediately after the sales order is entered. If the customer is billed on the basis of the quantity specified in the vendor invoice, you cannot create the billing document until the vendor invoice has been entered in Invoice Verification.

[Former Member]

Hi charlie,

can you please explain it step by step with t-codes.

you help is considered more valubale.

thanks in advance.

regards,

william

[former_member660933]

Hello,

Check the following link