Third party sales configuration

[former_member204590]

Dear

I needed your guidance for third party sales when vendor supply the material to the customer we keep item category group BANS and stock entered virtually in our stock and then vendor invoice generated and received by the company through MIGO and MIRO.

My question is that when vendor supply to the company and company supply to the client or other wise I can say our item category is HAWA in that case what will be process can you elaborate the process and configuration of the scenario.

Thanks

Riti

[Former Member · Accepted solution]

Hi,

Here are two scenario's in this case

Third party sales

Individual P.O

Thirdpart sales :

Create sales order(Item category TAS) >> P.R genrated after saving order >> P.O with refrance to P.R >> Vendor deliver goods to customer and raises invoice - MIRO >> Invoice to customer with refrance to sales order.

Individual P.O :

Create sales order(Item category TAB) >> P.R genrated after saving order >> P.O with refrance to P.R >> Goods Reciepts -MIGO >> Invoice reciepts - MIRO >> Outbound delivery to customer >> Invoice to customer

Kapil

[Former Member · Accepted solution]

Hi Riti,

Just adding to Kapil's input,

hope below input will helpyou

An Example Of Third Party Sales

Scenario:

2 companies are created in system - India & Singapore Customer places sales order for particular material on Singapore. Singapore is not able to produce the same. They pass on the order to India for processing. After processing India ships the material directly to the customer along with necessary documentation. Invoice copy is passed on to Singapore. Final Commercial Invoice will be raised by Singapore. How can the above scenario handled?

By: Balaji

You can do this using third party sales.

The third party sales process is as under.

1) Singapore company creates an order for the singapore customer.

2) Because of the configuration settings of the sales document type, item category & schedule line category, as soon as the order is saved a PR (purchase requisition) is automatically generated. This is converted into PO (purchase order) and sent to the Indian company.

3) Indian company supplies the material directly to the Singapore customer.

4) Indian company sends the invoice to the Singapore Company.

5) Singapore company does the invoice verification in MM using tcode MIRO.

6) Singapore company raises the invoice to the singapore customer.

In standard SAP, item category TAS is used for this. The schedule line category is CS. Here you can see a field 'order type' with value 'NB'. This triggers the automatic creation of the PR.

Plus in the material master also you need to do certain settings.

1) If you are always following a third party process for a material then you have to create the material using item category group BANS. The procurement type should be marked as external procurement (F) in MRP 2 view of the material master record.

2) If you are not always allowing third party order processing then you can create a material master record with item category group as NORM and the procurement type should be marked as (X) meaning both types of procurement (in house manufacturing and external procurement).

In the item category the billing relevance should be 'F'.

Third party order processing is as follows:

Assume three companies X, Y and Z

X - The company,

y - The customer

Z - Vendor

When ever X gets a PO from Y to supply some goods, X has an option of either manufacturing those goods or procuring those goods.

If he is procuring the goods, there are two methods that are generally followed:

Method 1)

After receiving the PO from Y, X creates a sales order against Y.

Now at the same time he also creates a PO to a vendor Z to produce the goods

Z produces the goods and supplies to X

X receives the goods from Z

Then X delivers the same goods to Y.

After that X invoices Y and Z invoices X.

Note : Here there is no direct/ Indirect relation between Z and Y.

This process is known as Trading Process. and the Material here is created with Material type HAWA.

The other method is a Third party order processing method:

Here the glaring difference is that instead of Z supplying the material to X and X in turn supplying the same material to Y.

X authorizes Z to supply the material to Y on his behalf and notify him once the delivery is complete.

Now Z supplies the material to Y and acknowledges the same to X.

Z will send a copy of delivery acknowledgement and invoice to X.

After receiving the delivery confirmation and invoice from Z, X has to verify the invoice and this process is known as invoice verification and is done in SAP through Tcode MIRO.

The next step for X is to create an invoice and submit to Y

Only after the invoice verification document is posted then only X can create an invoice for Y.

This is the business flow that is followed for third party order configuration.

There are few steps that have to be configured to enable the system to function as mentioned above.

Step1)

If you are always followwing a third party process for a material then you have to create the material using item category group BANS.

The procument type should be marked as External procurement (F) in MRP 2 view of the material master record.

if you are not always allowing third party order processing then u can create a material master record with item category group as NORM and the procurement type should be marked as ( X) meaning both types of procurment ( in house manufacturing and external procurement).

step 2)

the item category in the order should be manually changed as TAS.

For that you need to confugure the item category determination

ord type + item cat grp + usge + Hiv level = Item cat + Manual item cat

OR + NORM + + = TAN . + TAS

OR + BANS + + = TAS

Step 3)

make sure that during the item category configuration for TAS you need to mark relevnat for billing indicator as F

step 4)

The schedule line cateogry for this type should be CS.

make sure that you mark subsequent type as NB - purchase requisition in this schedule line category as this will trigger the purchase requision order immediately after the creation of the sales order and the PO to vendor is created against this purchase requiesion.

Regads Siva

[former_member204590 · Accepted solution]

thanks for your valuable comment dear kapil and shiva but let me explain the scenario

what I did was I used item category TAS and created va01 saved it went back by va02 and taken pr number and put the vendor. after that i used t code me57 for po did MIGO and MIRO and then order related billing. here we virtually received the goods.If we will receive the goods the entire rest process we need to do like deliver pgi etc. am i right?

and other customer pass order to us and we pass it to vendor and vendor do the delivery to the party and generate bill to the company.

i guess you understand my problem now guide me configuration of both business process with explanation.

thank you so much for your concern

[Former Member · Accepted solution]

Hi Riti,

Third party sales processing does not work like that actually..

In fact, a third party sales processing is required because your company does not have the required goods to sell to the customer, so that's why a third party vendor is required to supply (and deliver/ship) the goods directly to your customer and then bill your company.

The standard process flow would work this way:

Create Third Party Sales Order (VA01/VA03 - retrieve PR num)* --> Create Purchase Order (Display list of PR with ME57 and convert to PO with ME58) --> Approval/Release of PO (if required - ME28) --> Invoice Verification (MIRO)**

--> Billing (VF01/vf04)

• The PR number is automatically created in this step.

**The incoming invoice from the vendor updates the billing quantity, so that the customer-billing document can only be created after entering the invoice from the vendor.

So, in this situation, you do not carry out a MIGO in your company process.

Configuration:

1. Create your Account Assignment Category required for Purchasing.

2. Create your Item Categories for Purchasing Doc.

3. Assign to combination of the relevant Item Categories for Purchasing Doc.

4. Create your relevant 3rd Party Sales Doc Ty & Assign the Item Categories for SD.

5. Maintain the copy control for your Sales Doc (header & item).

6. Define and maintain your Transfer Requirement config - Define the Class --> Define the Requirement --> Assign the Determination.

7. Maintain the SD Schedule Line Categories control - here u assign the Acct. Assignment Cat similar to your Purchasing and determine the PR type you want to trigger (i.e. ZNB).

8. Assign the Schedule Line Categories to Item Categories.

9. Maintain copy control for Schedule Lines.

10. Configure your Billing Doc - it must be Order-related Billing.

11. Maintain copy control for Billing: i.e, OR --> F2 (if you did a Copy As.. function from the std SAP docs, the copy control should already be in place).

As for the "Billing Quantity" indicator in the Billing Copy Control config - You can consider indicator E, F and I for third party transactions, depending on the requirement of the your company.

Hope this helps.

Thanks.

[Former Member · Accepted solution]

Hi Riti

you shall do the config as PKW mentioned and do the cycle..

for you question like deliver pgi etc. am i right? is no, as you understand delivery happens vrom vendor to Customer directly and 3rd party sales it is order related billing as mentioned in PKW config steps.

Please revert to us for any further help.

Regards,

Siva

[former_member204590 · Accepted solution]

thanks PKW and Shiva your guidance is very helpful for me to develop right concept.

Thanks