Third Party Sales

[Former Member]

Dear Gurus

I am new to this forum and SAP community too.

Please help me with the detailed procedure for Third Party Sales.

Sachin

[Former Member · Accepted solution]

hi sachin ,

If u r practising in ides system by creating u r materials and customers,

then apart from doing all the things which our friends had explained, apart from that

For the material u r using as third party there should be " purchasing info record"

which has to be maintained by using T-code ME11, AND source list by using Tcode ME01 as these are essential while assigning PO to vendor.

ofcoz all these are done by MM people.

These will be useful if u r using u r own data like co.code, cust. master records, materials etc.

regards

prashanth

[Former Member]

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[Former Member]

Link: http://help.sap.com/

Path: SAP Best Practices --> Baseline Packages --> Based on SAP ECC 5.00 --> Select Country: for eg, Localized for India --> Technical Information --> Building Blocks --> Select Country for eg, India -->

<b>J54 - Third Party with Shipping Notification</b>

In third-party order processing, your company does not deliver the items requested by a customer. Instead, you pass the order along to a third-party vendor who then ships the goods directly to the customer and bills you.

In this scenario, the shipping notification received is entered as a dummy goods receipt in consumption. This allows you to create the customer invoice before the incoming invoice is received from the vendor.

<i>Function List</i>

The following functions are provided to support the Third Party With Shipping Notification (J54) building block:

Order

When the order is created, the specification of material numbers, quantity and conditions takes place at item level. As the material is not available on stock, a purchase requisition is created directly within the sales order.

Purchase Order Processing

The purchase requisition can already be automatically assigned during creation. If not, it is possible to assign the purchase requisition manually. The purchase order is created with reference to the purchase requisition. Quantity and material are transferred from the sales order. The purchase order price can also now be determined via the condition records.

Shipping Notification

When the vendor has sent the material to the customer, they will normally send you a shipping notification, which, amongst other things, contains the exact quantity of material sent. You have the possibility to enter this shipping notification into the system in the form of a dummy goods receipt. It will be posted directly in consumption so that no stocks are created. The quantity of goods received then updates the quantity to be invoiced in the sales order. Therefore, it is possible to create the customer invoice before you receive the incoming invoice from the vendor.

Billing Documents

The billing documents are created on the basis of the order. Since the vendor might not deliver the exact quantity ordered, quantity adjustment takes place via the shipping notification.

Vendor Invoice Verification

The vendor invoice verification can take place after billing. The variance in purchasing can be updated in Controlling using retroactive billing.

Controlling

The revenue and costs will be posted to CO-PA using the billing document.

<i>Key Points</i>

The customer invoice can be created on the basis of the shipping notification before receiving the incoming invoice from the vendor.

<b>J55 - Third Party Without Shipping Notification</b>

In third-party order processing, your company does not deliver the items requested by a customer. Instead, you pass the order along to a third-party vendor who then ships the goods directly to the customer and bills you.

In this scenario, the vendor does not send a shipping notification. The incoming invoice from the vendor updates the billing quantity, so that the customer-billing document is only possible after entering the invoice from the vendor

<i>Function List</i>

The following functions are provided to support the Third Party Without Shipping Notification (J55) building block:

Order

When the order is created, the specification of material numbers, quantity and conditions takes place at item level. As the material is not available on stock, a purchase requisition is created directly within the sales order.

Purchase Order Processing

The purchase requisition can already be automatically assigned during creation. If not, it is possible to assign the purchase requisition manually. The purchase order is created with reference to the purchase requisition. The quantity and the material are transferred from the sales order. The purchase order price can now also be determined using condition records.

Vendor Invoice Verification

The vendor invoice verification must take place before customer billing. The quantity of the invoice updates the quantity to be invoiced in the sales order.

Billing Documents

The billing documents are carried out on the basis of the order. Since the vendor might not deliver the exact quantity ordered, quantity adjustment takes place through the quantity in the vendor's invoice.

Controlling

The revenue and costs will be posted to CO-PA via the billing document

<i>Key Points</i>

As no shipping notification is available, the customer invoice can only be created after having finished vendor invoice verification.

Select the required basic configuration / scenario. These will consist of overview, configuration guide, business process, master data &so on ...........

Regards,

Rajesh Banka

Reward points if helpful.

[Former Member]

Hi Sachin,

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 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.

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 procurement ( 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 configure the item category determination

Order type + item cat Group + Usage + High 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 relevant for billing indicator as F

step 4)

The schedule line category 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 requisition order immediately after the creation of the sales order and the PO to vendor is created against this purchase requisition

Please Reward IF Really Helpful,

Thanks and Regards,

Sateesh.Kandula

[Former Member]

In third-party order processing, your company does not deliver the items requested by a customer. Instead, you pass the order along to a third-party vendor who then ships the goods directly to the customer and bills you. A sales order may consist partly or wholly of third-party items. Occasionally, you may need to let a vendor deliver items you would normally deliver yourself

.Processing Third-Party Orders in Sales

Third-party items can be created automatically by the system, depending on how your system is set. However, you can also change a standard item to a third-party item during sales processing manually

Automatic third-party order processing

If a material is always delivered from one or more third-party vendors, you can specify in the material master that the material is a third-party item. During subsequent sales order processing, the system automatically determines the appropriate item category for a third-party item: TAS. To specify a material as a third-party item, enter BANS in the Item category group field in the Sales 2 screen of the material master record.

Manual third-party order processing

In the case of a material that you normally deliver yourself but occasionally need to order from a third-party vendor, you can overwrite the item category during sales order processing. For a material that you normally deliver yourself, you specify the item category group NORM in the material master.

If, as an exception, you use a third-party material, change the entry TAN to TAS in the ItCa field when processing the sales document. The item is then processed as third-par

Processing Third-Party Orders in Purchasing

When you save a sales order that contains one or more third-party items, the system automatically creates a purchase requisition in Purchasing. Each third-party item in a sales order automatically generates a corresponding purchase requisition item. During creation of the requisition, the system automatically determines a vendor for each requisition item. If a sales order item has more than one schedule line, the system creates a purchase requisition item for each schedule line.

Purchase orders are created from purchase requisitions in the usual way. For more information about creating purchase orders, see the Purchasing documentation. During creation of the purchase order, the system automatically copies the delivery address of your customer from the corresponding sales order. In a sales order, you can enter purchase order texts for each third-party item. When you create the corresponding purchase order, the texts are automatically copied into the purchase order. The number of the purchase order appears in the document flow information of the sales order

You process third-party items by creating a normal sales order. In overview for the order, you can then overwrite the default item category (TAN in the standard system) with the special item category for third-party items: TAS.

[Former Member]

Hi Sachin.,

Customize the third party sales in summary:

1. Create Vendor XK01

2. Create Material – Material Type as "Trading Goods". Item category group as "BANS".

3. Assign Item Category TAS to Order type that you are going to use.

4. A sale order is created and when saved a PR is generated at the background

5. With reference to SO a PO is created (ME21N). The company raises PO to the vendor.

6. Vendor delivers the goods and raises bill to company. MM receives the invoice MIRO

7. Goods receipt MIGO

8. Goods issue

9. The item cat TAS or Schedule line cat CS is not relevant for delivery which is evident from the config and, therefore, there is no delivery process attached in the whole process of Third party sales.

10. Billing *-- Seema Dhar

SD - 3rd party sales order Create Sales Order

VA01

Order Type

Sales org, distr chnl, div

Enter

Sold to

PO #

Material

Quantity

Enter

Save

SD - 3rd party sales order View the PR that is created with a third party sales order

VA01

Order Number

Goto Item Overview

Item ->Schedule Item

SD - 3rd party sales order View the PR that is created

ME52N

Key in the PR number

Save

SD - 3rd party sales order Assign the PR to the vendor and create PO

ME57

Key in the PR number

Toggle the "Assigned Purchase Requisition"

Execute

Check the box next to the material

Assign Automatically button

Click on "Assignments" button

Click on "Process assignment"

The "Process Assignment Create PO" box , enter

Drag the PR and drop in the shopping basket

Save

SD - 3rd party sales order Receive Goods

MIGO_GR

PO Number

DN Number

Batch tab , click on classification

Serial Numbers tab

Date of Production

Flag Item OK

Check, just in case

Post

Save

SD - 3rd party sales order Create Invoice

MIRO

Invoice Date

Look for the PO , state the vendor and the Material

Check the box

Clilck on "Copy"

Purchase Order Number (bottom half of the screen)

Amount

State the baseline date

Simulate & Post

Invoice Number

*Invoice blocked due to date variance

SD - 3rd party sales order Create a delivery order

VL01N

In the order screen , go to the menu Sales Document , select "Deliver"

Go to "picking" tab

State the qty and save

SD - 3rd party sales order Create a billing document

VF01

Ensure that the delivery document is correct in the

Enter

Go to edit -> Log

Save

REWARD if helpfull

Thanks & Regards

Narayana

[Former Member]

hi

Customize the third party sales in summary:

1. Create Vendor XK01

2. Create Material – Material Type as "Trading Goods". Item category group as "BANS".

3. Assign Item Category TAS to Order type that you are going to use.

4. A sale order is created and when saved a PR is generated at the background

5. With reference to SO a PO is created (ME21N). The company raises PO to the vendor.

6. Vendor delivers the goods and raises bill to company. MM receives the invoice MIRO

7. Goods receipt MIGO

8. Goods issue

9. The item cat TAS or Schedule line cat CS is not relevant for delivery which is evident from the config and, therefore, there is no delivery process attached in the whole process of Third party sales.

10. Billing

SD - 3rd party sales order Create Sales Order

VA01

Order Type

Sales org, distr chnl, div

Enter

Sold to

PO #

Material

Quantity

Enter

Save

SD - 3rd party sales order View the PR that is created with a third party sales order

VA01

Order Number

Goto Item Overview

Item ->Schedule Item

SD - 3rd party sales order View the PR that is created

ME52N

Key in the PR number

Save

SD - 3rd party sales order Assign the PR to the vendor and create PO

ME57

Key in the PR number

Toggle the "Assigned Purchase Requisition"

Execute

Check the box next to the material

Assign Automatically button

Click on "Assignments" button

Click on "Process assignment"

The "Process Assignment Create PO" box , enter

Drag the PR and drop in the shopping basket

Save

SD - 3rd party sales order Receive Goods

MIGO_GR

PO Number

DN Number

Batch tab , click on classification

Serial Numbers tab

Date of Production

Flag Item OK

Check, just in case

Post

Save

SD - 3rd party sales order Create Invoice

MIRO

Invoice Date

Look for the PO , state the vendor and the Material

Check the box

Clilck on "Copy"

Purchase Order Number (bottom half of the screen)

Amount

State the baseline date

Simulate & Post

Invoice Number

*Invoice blocked due to date variance

SD - 3rd party sales order Create a delivery order

VL01N

In the order screen , go to the menu Sales Document , select "Deliver"

Go to "picking" tab

State the qty and save

SD - 3rd party sales order Create a billing document

VF01

Ensure that the delivery document is correct in the

Enter

Go to edit -> Log

Save

Regards,

Rajesh Banka

Rewards point if helpful

[Former Member]

Dear Sachin,

<b>Third-Party Order Processing with Shipping Notification:</b>

This SAP best practice supports passing a customer order to a third-party vendor, who then ships the goods directly to the customer, bills you, and sends you a shipping notification. The shipping notification received is entered as a dummy goods receipt in consumption. This approach allows you to create the customer invoice before you receive the incoming invoice from the vendor.

The following functions are provided to support the Third Party With Shipping Notification:

<b>Order</b>

When the order is created, the specification of material numbers, quantity and conditions takes place at item level. As the material is not available on stock, a purchase requisition is created directly within the sales order.

<b>Purchase Order Processing</b>

The purchase requisition can already be automatically assigned during creation. If not, it is possible to assign the purchase requisition manually. The purchase order is created with reference to the purchase requisition. Quantity and material are transferred from the sales order. The purchase order price can also now be determined via the condition records.

<b>Shipping Notification</b>

When the vendor has sent the material to the customer, they will normally send you a shipping notification, which, amongst other things, contains the exact quantity of material sent. You have the possibility to enter this shipping notification into the system in the form of a dummy goods receipt. It will be posted directly in consumption so that no stocks are created. The quantity of goods received then updates the quantity to be invoiced in the sales order. Therefore, it is possible to create the customer invoice before you receive the incoming invoice from the vendor.

<b>Billing Documents</b>

The billing documents are created on the basis of the order. Since the vendor might not deliver the exact quantity ordered, quantity adjustment takes place via the shipping notification.

<b>Vendor Invoice Verification</b>

The vendor invoice verification can take place after billing. The variance in purchasing can be updated in Controlling using retroactive billing.

<b>Controlling</b>

The revenue and costs will be posted to CO-PA using the billing document.

<b>Third-Party Order Processing Without Shipping Notification:</b>

This SAP best practice supports passing a customer order to a third-party vendor, who then ships the goods directly to the customer and bills you. The vendor does not send a shipping notification. The incoming invoice from the vendor updates the billing quantity, so that you can create the customer-billing document only after entering the invoice from the vendor.

The following functions are provided to support Third Party Without Shipping Notification building block:

<b>Order:</b>

When the order is created, the specification of material numbers, quantity and conditions takes place at the item level. As the material is not available on stock, a purchase requisition is created directly within the sales order.

<b>Purchase Order Processing:</b>

The purchase requisition can be automatically assigned during creation. If this is not the case, it is possible to assign the purchase requisition manually. The purchase order is created with reference to the purchase requisition. The amount and the type of material are transferred from the sales order. The purchase order price can be determined via the condition records.

<b>Vendor Invoice Verification:</b>

The vendor invoice verification is to be performed before customer billing. The quantity of the invoice updates the quantity to be invoiced in the sales order.

<b>Billing Documents:</b>

The billing documents created are based on the sales order. Since the vendor might not deliver the exact quantity ordered, quantity adjustment takes place via the vendor's invoice.

<b>Controlling:</b>

The revenue and costs will be posted to CO-PA via the billing document

Hope this is helpful.

Regards,

Naveen.

[Former Member]

hi,

Process Flow for 3rd Party Sales

Customize the third party sales in summary:

1. Create Vendor XK01

2. Create Material – Material Type as "Trading Goods". Item category group as "BANS".

3. Assign Item Category TAS to Order type that you are going to use.

4. A sale order is created and when saved a PR is generated at the background

5. With reference to SO a PO is created (ME21N). The company raises PO to the vendor.

6. Vendor delivers the goods and raises bill to company. MM receives the invoice MIRO

7. Goods receipt MIGO

8. Goods issue

9. The item cat TAS or Schedule line cat CS is not relevant for delivery which is evident from the config and, therefore, there is no delivery process attached in the whole process of Third party sales.

10. Billing

Hope it helps.

Thanks

Sadhu Kishore

[Former Member]

Dear Trading Material type ??

Suppose I have got my regular Material Which I manufacture ,at the Same time I do the Trading if it isn't available in the Inventory?? Then how to do it??

Should <b>I create 2 Material Code for</b> this???