Cash Sale with Deliveries On Demand

[former_member208502]

Dear Experts.

We have a business scenario as follows:

1. We create a sales order for a client.

2. We bill the client immediately.

3. Client pays for the total amount of the bill (cash sale).

4. [The tricky part] The client wants us to deliver the goods (different materials) on demand, so the deliveries can be made at any time and with as many goods and quantities as the client wants, without exceeding the total of the sales order, of course. In the meantime we have to manage that client inventory in our warehouse and make sure it is available for that specific customer, whenever the customer wants a part of it. Multiple deliveries can be made. After all the goods have been delivered, we have to provide Proof of Delivery.

Because of the needs of the business, we rushed into configuration and did the following:

1. We create a sales order  with delivery-related billing, but no PGI is reported.

2. We generate the invoice and all the accountability for the total amount of stock and pieces.

2. We created a new plant (X) to separate that inventory (MRP not relevant) for the customer, in which we move the stock that has been sold.

3. Whenever a delivery on demand is solicited by the customer:

3.1 We create another Sales order.

3.2 We create a "delivery note" and do the PGI, taking the stock from plant (X).

3.3. No further document flow appears.

While this solution is "valid" in functionality, it has its up-downs: We have a non-desired impact on the average cost for every material, so we're not reflecting the correct or expected cost in FI.

[QUESTION]

Is there a better way to configure this scenario within SAP standard functionality? - Do you have any recommendations?

We have explored an order-related billing scenario, but we have an issue: how can we guarantee that the specific stock sold will be always available for the customer?.

All the input will be appreciated.

Thanks.

[prashant_sharma21 · Accepted solution]

Hello Francisco,

I have some cross questing and some suggesting as well.

It seems your requirement is close to consignment process.

1. We create a sales order  with delivery-related billing, but no PGI is reported.

2. We generate the invoice and all the accountability for the total amount of stock and pieces.

2. We created a new plant (X) to separate that inventory (MRP not relevant) for the customer, in which we move the stock that has been sold.

as per your requirement your stock are not moving to your customer it is just moving from one plant to another plant BUT same movement you want to send invoice to your customer.

>> Seems your requirement is close to consignment process.

You can create Consignment Fill up order: in which we move our stock from our plant to consignment location additionally with this you can create Proforma Billing document as well (with some customizing changes). this proforma invoice will be use as a dummy invoice. which will inform to your customer that he has to pay x amount to company

Now stock is in special location which is called consignment stock however it is sold but still it is with you.

3. Whenever a delivery on demand is solicited by the customer:

3.1 We create another Sales order.

3.2 We create a "delivery note" and do the PGI, taking the stock from plant (X).

3.3. No further document flow appears.

Now you can create consignment issue trough which we can deliver the goods to our customer. you will to PGI and system will now create Billing documents which will hit your accounting documents as well. now

[former_member208502 · Accepted solution]

Hello Prashant.

It's true, it's similar to consignment process in a material management perspective. Just to clarify, we moved it to another plant (virtual, not physically) as a way to guarantee the availability of the purchased stock to the customer at all times, but it is still in the same warehouse and same locations (which is ours).

We're not billing for each delivery made to customer. The customer pays up-front like in a cash sale, so we're billing only once, hit accounting with this and send the invoice to the customer for the whole sale.

When deliveries are needed, we PGI to manage from customer's purchased stock but we're not billing again, we just deliver a printed sheet with the details of the particular delivery, because it has been already paid.

-----

With consignment issues, we should be able to control the delivery of goods and (please correct me if i'm wrong), we'll be solving the situation with the average cost.

Is it posible to configure in consignment, so we bill for the whole sale only once, and when doing consignment issues, only impacts over the consingment stock and average cost by materia?

[VeselinaPeykova · Accepted solution]

Hello Francisco,

I suggest to try the following in your DEV system:

Perform a standard sales process: order->delivery->goods issue->billing.

Create a vendor and a consignment PIR.

Then receive back the issued quantity as vendor consignment blocked (505K).

After that make vendor consignment return from blocked (506K).

If you charge the customer for stock-keeping after purchase, create manually a debit memo with a service material and bill it.

Show the documents to your colleagues from MM/FI/CO.

[former_member208502 · Accepted solution]

Thank you, Veselina.

I'm gonna try this. I'll let you know how it turns out with the team.

[prashant_sharma21 · Accepted solution]

Hello Francisoc,

If I am understand your requirement correctly, your requirement is somehow close to third party process BUT here our vendor would be only our Plant. let me explain.

Suppose your plant/warehouse is XXXX once order comes from customer you put the stock in YYYY, here YYYY is not thing but separate place/location with in plant XXXX but as we are separating our stock hence I gave name YYYY.

Now remember this XXXX will work as a vendor in this third party process as well.

Customer place the order of material# ABC and system determine the plant YYYY in sales order now in back ground system generate a PR which will convert to PO in PO system determine vendor XXXX (which is nothing but out original plant only).

Now in PO vendor is XXXX and receiving plant is YYYY.

this PO can do delivery immediately and we can trigger Goods receive as well.  after goods receive, stock would be in our plant YYYY (which is nothing but our virtual plant/not physically exist). Now remember the stock would be in YYYY sales order specific and with reference to GR you can create customer invoice and sent to him. here all account document will trigger as well.

Now stock is in you location only:

Now you can do following things.

1. you can give stock to your customer with reference to place sales order.

2.  you can do delivery/ PGI to your customer place.

I hope above points will work.

Thanks,

Prashant sharma

[former_member208502 · Accepted solution]

Hello Prashant.

Now there's two valid but different approaches: Consignment-like or Third party-like.

As a result of everyone's exceptional input, I personally think that both can cover the requirement needs, but consignment approach seems more simple to configure and run. I haven't tested it yet (I'll come back with the results of the recommend config above).

Which approach would you recommend? - Do you see more benefits in one approarch over the other?

Thanks.

[VeselinaPeykova · Accepted solution]

None of Prashant's suggestions is suitable in your case, because no matter that you move goods between two plants in the same company code - they are still considered as part of your own inventory from FI perspective. The same applies if you think of using customer consignment.

The idea of 601 movement type (or whatever you use for standard sales) is not only to reduce quantities in a certain plant/storage location, but also to get a FI document and post value change to your stock account for FG inventory.

Customer consignment full-up means the FG are still in your books, but they are physically located outside your premises, which is the exact opposite to what you want to achieve.

[former_member208502 · Accepted solution]

This is my understanding of both scenarios at the moment:

As a third party scenario (Prashant) - This wouldn't work from an FI perspective, beacuse we'll be doing P2P-O2C between plants in which both cases, stock is MRP relevant and has a possible non-desired impact on the average cost.

As a consignment scenario (Veselina) - Stock would be sold/billed accordingly. When received back as consignment, it would be considered as part of own inventory but it would be MRP not relevant/non-valuated anymore, and it will simulate the functionality needed without an FI impact, having the trace over the "deliveries" when stock is returned from blocked (506K). We'll be simulating consingment process to suit the requirement.

Am I correct? - If not, can you further elaborate, please?

[VeselinaPeykova · Accepted solution]

When you receive stocks as vendor consignment, from financial perspective this is not your own stock. You will get no financial postings, because you will never use vendor consignment in the classical sense (you will not consume any of it, you will only perform returns at a later time).

I suggested also to block the products, so I do not expect that they will influence ATP, MRP.

The other important things to consider are:

1/ physical separation or at least marking/labeling the goods in the warehouse (probably you are doing that already).

2/ if you discover damaged products from the quantities in safe-keeping, you will need to solve that by manual IM movements or 'buy' them back.

3/ if you are charging the customer additionally for transporting the products and you use shipment cost calculation, it can be a bit complicated to create the deliveries.

[Former Member]

Hi Francisco,

If i am not wrong you are trying to reserve the stock for customers. Once the order is placed by any customer, the stock should be reserved and it will be delivered as per the customer requirement. Can u try with the following steps and let me know whether it work for you.

1. Create a sales order with requirement type  KE.

2. Reserve the stock against that order for all materials with movement type 412 E.

3. Create proforma invoice. Send it to customer.

4. Deliver the goods to customer as many time it required.

5. Create commercial invoice.

One advantage you will have that, you do not need to create a virtual plant to reserve the stocks for customers to make sure of stock availability.

[Jelena]

It is not the stock reservation scenario. Please read the initial post carefully - it clearly states that the goods are sold at once and the customer is billed. At that point the goods become the customer's property, as Veselina correctly pointed out (yet again).

Transfer of ownership is the main process point here. Unless OP wants to change that part there are not many options.

[Jelena]

I'm not an expert on this but I also feel this is a consignment scenario. The important thing to note here is the ownership of goods - since the customer is billed for the whole amount you are essentially just providing the storage service afterwards. With one invoice you should capture your cost of goods and transfer the ownership to the customer (unless I misread the post). So there should not be any cost fluctuations to begin with. After that all is left is to manage the deliveries and spit out the proof of delivery paperwork. (I hope your legal department thought through what would happen in case the warehouse burns down, for example.)

There was almost the same exact question already posted on SCN a while ago. If you search for "consignment" you might find it.

[former_member208502]

Could you please provide the link to that discussion?. I've not been able to find it yet.

[Jelena]

Track Stock at my facilities belonging to the c... | SCN

Looks like the old one was more of an MM question.