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vendor to vendor procurement.

Hello Expert,

In one scenario my client have two vendor,A & B,My client want that vendor b will supply the raw material to vendor a and vendor a will use that material and send to my client,but payment will pay by client to vendor b.

Pls suggest,thanks in advance............

Former Member replied

For me, your query is still unclear.

What kind of activities does your vendor "A" performs after receiving the Material from Vendor "B"

What will be the Output from Vendor "A"? Is he doing any subcontracting / Service activity after receiving the Material from Vendor B? Is he charging anything from your client?

I am suggesting the below solution based on what ever i have understood from your points.

1) If you are procuring the Material from Vendor "B" who will supply the goods directly to Vendor "A", then you can create a normal Purchase order and in Delivery address tab, you can maintain Vendor "A" and click on SC vendor tick. Once you perform GR against this Purchase order, stock will get updated at Vendor "A" (Stock Provided to Vendor).

You can then go for Invoice verification same as for other purchases.

2) And you have to create one Subcontracting Purchase order with Vendor "A" with Item category "L" and specify the component (If the Component is same as Output, Input the same Material code and it becomes recursive) If you are not paying the Vendor "A", click on Free item check box in Subcontracting PO. Once the Vendor A done with the activity, you can receive the goods against Subcontracting Purchase order.

If this is not the business case, You have to explain your business scenario in detail.

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