SAP SD NOTE-11 Third Party Order Processing Final

SAP SD NOTE-10 Third Party Order Processing
Third-Party Order Processing
HAWA Trading Goods
Trading goods are movable goods intended for commercial exchange. Examples of trading goods
are market goods, consumption goods and durable goods. Trading goods are always bought and
re-sold by your company. The material master record for trading goods therefore always
contains purchasing data and sales data. Trading goods are managed in the SAP System using
the key HAWA.
Trading goods are always procured externally and then sold. A material master record of this
material type can contain purchasing data and sales data.
Example: An electronics shop of HP sells computers manufactured by HP, along with these
computers it also sells mouse, printers, scanners, screens etc. that are NOT manufactured by HP
but are bought and then sold from this electronic shop. This process uses HAWA (goods like
mouse, printers etc. etc.) but it is NOT 3rd party process but trading process.
A car company sell CAR as a Finished Goods (FERT) but it can sell some other accessories like
Audio System, mobile Charger, etc. from other outside vendors a Trading good. These audio
system can be brought by the company and sell as a TAS item category but when these material
have shortage, in that case it can be order from the vendor as a Trading Goods and delivered to
the end customer directly.
Introduction
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. The following graphic shows how a third party business transaction is processed.
Process Flow
 The processing of third-party order is controlled via material types.
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 Material types define whether a material is produced only internally can be ordered only
from third-party vendors, or whether both are possible.
 For example, a material that is defined as a trading good (HAWA) can only be ordered
from a third-party vendor.
 However, if you manufacture your own finished products, you may also want, from time
to time, to be able to order the same type of product from other vendors.
Basic Business Flow for the Third Party Process

The business flow that is followed for third party order configuration.
Third party order processing is as follows:
Assume three companies X, Y and Z
X - The company,
y - The customer
Z - Vendor
Whenever 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.
Method 2)
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.
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 during sales order processing.
Ex: MM01 Item category group Item category
BANS TAS
NORM TAS
 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.
The procurement type should be marked as External procurement (F) in MRP 2 view of
the material master record.
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 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.
 Make sure that the purchasing view has been maintained for the material as below
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 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-
party item.
 The procurement type should be marked as (X) meaning both types of procurment ( in
house manufacturing and external procurement).
 If address data for the ship-to party is changed in the sales order in third -party
business transactions, the changed data will automatically be passed on to purchase
requisition and also to the purchase order ,if one already exists.
 In the purchase order, you can display the address data for the ship -to party in the
attributes for the item. You can only change the address data for the ship-to party in
the sales order for third-party business transactions, and not in the purchase order.
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 .
 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.
 All changes made in the purchase order are automatically made in the sales order as
well. For example, if the vendor confirms quantities and delivery dates different from
those you request and enters them in the purchase order, the revised data is
automatically copied into the sales order.
How Purchasing Data Affects Delivery Scheduling

During the automatic delivery scheduling of third-party items, the system takes into account
lead times specified by the purchasing department . For example, the system allows for the time
required by the vendor to deliver the goods to your customer and the time required by the
purchasing department to process third-party orders.
Comparing Purchasing Data with Sales Data

You can create a list of all sales orders with third party items for which there are discrepancies
between the quantities ordered, invoiced, cancelled, or credited in Sales and the quantities
ordered, invoiced or credited in Purchasing.
Configuration steps:
For Third Party Sales Process we need maintain below prerequisites:
 Material Type: HAWA

 Schedule Line: CS
 Item Category: TAS
1. Define Schedule Line: CS

Go to Transaction Code: VOV6
OR
Navigate to below menu path:
IMG Sales and Distribution Sales Sales Documents- Schedule Lines
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 Define Schedule Line Categories
Select CS - Leg schedule line Category
Double click on CS below screen appears

 Order TYPE NB (Purchase Requisition Standard),
 Item Category5 (Third Party),
 Account Assignment Cat1 (Third- Party)
In Business data Tab

Movement type: [ ] = No movement type for Third Party sale
In third party sale there is no movement type because movement type indicates the
updation of stock quantity and value. In third party the GOODS supplied from vendor to
the customer so movement type not required.
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Order type: [NB ]
Purch.requis. Stand.
It is a purchase order type. Ex: Document type NB can be assigned. In individual
purchase order and third party sales order system automatically creates purchase
requisition. So as to create it automatically purchase requisition document type should
be assigned here.
Item category: [5] Third-party

We can specify the item category for purchase requisition documents.
Ex: “0” for individual purchase orders and “5” for third party orders.
Account assignment category: [1] Third-party

We can assign account assignment category for third party and individual purchase
order transactions. So that respective accounts get updated. The account assignment
category, which can be specified when maintaining schedule line categories, only
concerns schedule lines relevant to Purchasing. It is the account assignment category of
the purchase requisition that is to be created. It must be strictly differentiated from the
account assignment category of the sales order item, which is derived from the
requirements class.
In Transaction flow Tab

Incompletion procedure: [31] = Sched.Line w/PurReq.
Incompletion procedure has been defined and assigned to the schedule line category
CP. System follows this incompletion procedure and remains the end user if do not
maintain any values in schedule line category fields before saving the document.
The account assignment category, which can be specified when maintaining schedule
line categories, only concerns schedule lines relevant to Purchasing. It is the account
assignment category of the purchase requisition that is to be created. It must be strictly
differentiated from the account assignment category of the sales order item, which is
derived from the requirements class.
The system uses the incompletion procedure to determine which fields appear in the
incompletion log when the user does not enter information during sales order
processing. In SD Customizing, you can specify an incompletion procedure for each
type of sales document.
Example
Validity periods and customer purchase order numbers are required entries for both
contracts and scheduling agreements. In this case, the system automatically proposes
the same incompletion procedure for both types of document.
2. Define Item Category: TAS

Go to Transaction Code: VOV7
OR
IMG  Sales and Distribution  Sales  Sales Documents- Sales Document Item
Define Item Categories
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Select Item Category TAS
Double click on TAS
Billing relevance: [F] = Order related billing doc. Status according to invoice qty.
The value determines what kind of billing document it has to generate for this item.
That is order related billing document or delivery related billing document.
Relevant for order-related billing documents based on the invoice receipt quantity
(third-party business transaction). The system transfers the order into the billing due list
only after the vendor invoice has been received and processed in the purchasing
department. After the receipt of each invoice, a customer invoice is created for the
quantity that appears on the vendor invoice. The order has status "Billed" until the next
vendor invoice is received.
Item category TAS (Third party item) is set up with billing relevance "F" in the standard
system.
This process can also be related to the quantity of goods receipt.
You can make the control setting as to whether the invoice receipt quantity or the
goods receipt quantity should be relevant for billing in the copy control for billing on the
item level in the billing quantity field. (In Customizing, choose Sales and Distribution ->
Billing -> Billing documents -> Maintain Copying Control for Billing Documents ->
Copying Control: Delivery to Billing Document -> Item, then select an item category.)
3. Define Item Category Groups: BANS

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IMG  Sales and Distribution  Sales  Sales Documents-  Sales Document Item
 Define Item Category Groups
Define item category Group BAAN
4. Assign Schedule Line Category TAS --> CS
5. Assign Item Category OR --> BANS-->TAS
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6. Create Purchasing organization (optional)

IMG- ->Enterprise Structure--> Definition-Materials Management--> Maintain Purchasing
Org.
7. Create purchasing group (optional)
IMG--> Materials Management--> Purchasing --> Create purchasing group
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8. Assign Purchasing Org. to company code
Path: SPRO - Enterprise structure - Assignment - Materials management - Assign

purchasing organization to company code.
9. Assign purchasing organization to plant

Path: SPRO - Enterprise structure - Assignment - Materials management - Assign
purchasing organization to plant
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10. Maintain purchasing area and Maintain Purchasing Area Determination (optional)
Path: SPRO - Materials Management - Purchasing - Maintain Purchasing Area

Path: SPRO - Materials Management - Purchasing - Purchasing Area Determination
NOTE: The requirements for 'Maintain Purchasing Area' and 'Maintain Purchasing Area
Determination' will only be available if your system is configured as an SAP Retail
System. It's not because of different releases which caused it appear/ didn't appear in
the customizing.
11. Create Material

Go to Transaction Code: MM01
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Procurement type is “F” ExternalProcurement,
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12. Create Vendor Account Group (optional)
Path: SPRO - Financial Accounting - Accounts Receivables and Accounts Payables -

Customer Accounts - Vendor Accounts - Master Data - Preparations for Creating Vendor
Master Data - Define Account Group
13. Create Vendor Number Range for account Group (optional)

Master Data - Create Vendor Number Range for account Group
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Click on Intervals and maintain as below
14. Number range assignment to Vendor Account Group (optional)

Master Data - Assign Number Rangers to Vendor Group
15. Create Vendor Master Data for Third-Party Sales
Transaction Code: XK01

provide the details like Company code, Purch. Org., & Account Group and start creating
Vendor.
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Maintain the data in all the required fields
 Go to Next screen option

Specify Reconciliation account number [151000 ] sort key [ ]
Cash management group [A1]
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Order currency [INR]
 Save and Exit
13. Create Vendor Info Record (if required) (optional)
Transaction Code: ME11
Enter the Vendor no. Material no., Purchasing org. and Plant and Create Info Record.
Serves as a source of information for Purchasing. The purchasing info record (also
referred to in abbreviated form as the "info record") contains information on a specific
material and a vendor supplying the material. For example, the vendor's current pricing
is stored in the info record.
The info record allows buyers to quickly determine:

 Which materials have been previously offered or supplied by a specific vendor
 Which vendors have offered or supplied a specific material
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Automatic Data Transfer
1. Materials, quantities are transferred from SO to PO.

2. Customer ship to address transferred to PO as Delivery address
3. Delivery note transferred from SO to PO.
Third Party Processing Steps
Step: 1 Create Sales Order
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 Select the Line Item and Click on Menu Goto--> Item--> Schedule Line
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 Below is the screen for Schedule Line CS for Third Party Sale and confirm quantity
is “0” since quantity will be deliver by the vendor as available.
 Pricing for Third Party Line Item.
 Click on Menu Edit--> Incompletion Log
 Save the document
Step: 2 List of purchase requisitions:
After saving sales order with item category TAS the purchase requisition is
automatically created. In order to see the document go to: Environment -> Status
overview and expand data for item, then expand data for purchase requisition as well:
Double click on the requisition number and you will be taken to the purchase requisition
document. The other way is to go to schedule line where you can find the purchase
requisition number.
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If third-party item has more than one schedule line with confirmed quantity > 0, then
purchase requisition is created for each schedule line.
It is wise to have the vendor determined in source of supply at this stage of the process
(i.e. source list)
OR
 Enter TCode ME5A/ME53N

 Enter material and plant
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 Double click on the purchase requisition and verify all the details
Step 3: Create Purchase Order
The invoice verification with reference to purchase order needs to be created when
invoice from vendor arrives to enterprise (t-code MIRO). The value and, if goods
receipt was done earlier, the quantity are proposed by the system. When the incoming
invoice is posted, following are updated:
 Purchase order history

 G/L accounts
 The vendor account in sub-ledger accounting, as well as the liabilities account
(general ledger)
 Enter TCode ME21N in the command bar and enter.

 Create purchase order w.r.t Purchase Requisition.
 Click on the document overview screen at the top left corner of the screen.
 Click on the ‘variants’ icon and Select the purchase requisition and click on
“Adopt” icon under the document overview.
 Check all the tabs and verify such as the purchase Order tabs etc..
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 and save the document.
Step 4: Create Invoice receipt (verification) for vendor:
invoice is posted following are updated:
 Purchase order history

 G/L accounts
 The vendor account in sub-ledger accounting, as well as the liabilities account
(general ledger)
Transaction Code MIRO : Invoice Verification for Vendor

 Enter the company code and hit enter.
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 Enter the invoice date, amount, and at the item level, change the tax code to I0
(A/P sales tax exempt), and jurisdiction code to IL0000000 and click on
Simulate.
 Check the GL accounts.
Step 5: Create billing document VF01
Once invoice receipt has been entered, the customer can be billed as well (T-CODE
VF01). Since an outbound delivery doesn’t exist for the third party the invoicing will
be order based. In the item category TAS definition, the billing relevance indicator is
set to F by default. That means: relevant for order-related billing document: status
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according to invoice receipt quantity. That is, the system allows invoicing the order
only when vendor’s invoice has been processed in invoice verification.
The customer invoice is created for the quantity specified in the vendor invoice. The
setting in the copy control for the third-party item category from sales document to
billing document specifies that the quantity from the invoice receipt is transferred to
the billing document instead of the order quantity (billing quantity indicator in copy
control is F)
 Enter the sales order number and created the billing doc for Customer.
Save the Document
Document Flow of the Standard Third Party Sales Scenario
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Configuration steps Revised:
1. Define Schedule Line: CS

Transaction Code: VOV6
 Order TYPE=[NB] (Purchase Requisition Standard),
 Item Category=[5] (Third Party),
 Account Assignment Cat1 (Third- Party)
2. Define Item Category :TAS

Transaction Code: VOV7
 Billing relevance: [F] = Order related billing doc. Status according to invoice qty.
3. Define Item Category Groups: BAAN

IMG-->Sales and Distribution--> Sales-->Sales Documents-->Sales Document Item--
>Define Item Category Groups
4. Assign Schedule Line Category TAS --> CS

IMG-->Sales and Distribution--> Sales-->Sales Documents-->Schedule Line-->Assign
Schedule line Category
5. Assign Item Category OR --> BANS-->TAS

IMG-->Sales and Distribution--> Sales-->Sales Documents-->Sales Document Item--
>Assign Item Category
6. Create Purchasing organization

IMG- ->Enterprise Structure--> Definition-Materials Management--> Maintain Purchasing
Org.
7. Create purchasing group

IMG--> Materials Management--> Purchasing --> Create purchasing group
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8. Assign Purchasing Org. to company code

IMG --> Enterprise structure ->- Assignment --> Materials management --> Assign
purchasing organization to company code.
9. Assign purchasing organization to plant

IMG--> Enterprise structure --> Assignment --> Materials management --> Assign
purchasing organization to plant
10. Maintain purchasing area and Maintain Purchasing Area Determination*

IMG - Materials Management - Purchasing - Maintain Purchasing Area
IMG - Materials Management - Purchasing - Purchasing Area Determination
NOTE: The requirements for 'Maintain Purchasing Area' and 'Maintain Purchasing Area
Determination' will only be available if your system is configured as an SAP Retail
System. It's not because of different releases which caused it appear/ didn't appear in
the customizing.
11. Create Material

Transaction Code: MM01
 In Basic Data1 View GenItemCatGroup=[NORM] Standard Item
 In Sales: sales Org. 2 View Gen.Item cat.grp =[ NORM] and Item category group
=[BANS]
 In MRP 1 View Purchasing group=ZPG(your purchasing group created in step 7)
and MRP Type=[ND] No planning
 In MRP 2 View Procurement type = [F] ExternalProcurement
 In Purchasing View mention Purchasing Group=ZPG(your purchasing group
created in step 7).
12. Create Vendor Account Group

IMG- Financial Accounting - Accounts Receivables and Accounts Payables - Customer
Accounts - Vendor Accounts - Master Data - Preparations for Creating Vendor Master
Data - Define Account Group
13. Create Vendor Number Range for account Group

IMG- Financial Accounting - Accounts Receivables and Accounts Payables - Customer
Data - Create Vendor Number Range for account Group
14. Number range assignment to Vendor Account Group

IMG - Financial Accounting - Accounts Receivables and Accounts Payables - Customer
Data - Assign Number Rangers to Vendor Group
15. Create Vendor Master Data for Third-Party Sales

Transaction Code: XK01
provide the details like Company code, Purch. Org., & Account Group and start creating
Vendor.
Maintain the data in all the required fields
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Specify Reconciliation account number [ ] sort key [ ]
Cash management group [A1]
Order currency [INR]
 Save and Exit
16. Create Vendor Info Record (if required)

Transaction Code: ME11
Processing steps Revised:
1. Create 3rd party sales Order (initial screen) T-Code: VA01

 Sales order overview screen. Enter the sold to party, material, quantity and
storage location and hit enter. Material Item Catg. TAS
 Sales Order: Purchase Order Scheduling Screen. Click on continue
 Schedule line for the third party standard sales order
 Pricing condition maintained for the material
 Check for completion and save the document
2 Enter T-Code ME5A in the command bar and hit enter.List of purchase requisitions
screen.
 Enter material and plant
 Click on the purchase requisition number.
 Purchase requisition for the standard third party sales order created.
 Double click on PR no to check the source of supply and other details > Back.
3. Enter T-Code ME21N in the command bar and enter. Create purchase order with
respect to PR.
 Click on the document overview screen at the top left corner of the screen.
 Click on the ‘variants’ icon and Select the purchase requisition and click on
“adopt” icon under the document overview.
 Check the purchase Order tabs such invoice etc.. and save the document.
4. Enter MIRO in the command bar to create Invoice verification for vendor.
 Enter the company code and hit enter.
 Enter the invoice date, amount, and at the item level, change the tax code to I0
(A/P sales tax exempt), and jurisdiction code to IL0000000 and click on Simulate.
 Check the GL accounts.
 Click on Save/Post
5. Enter VF01 to create billing document for the customer and hit enter.
 Overview of the billing items.
 Save the billing document
Question: How vendor is determined in third party sale scenario at purchase order
step?
Answer: In the Third party, scenario when the PR is triggered based on the Item
Category, Vendor is determined from the source list (ME01) for the material and plant
combination, which flows into the PR. The Vendor is marked as fixed in the
Source list so that the PR is created automatically.
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In third-party process the delivery of the goods required by the customer is not done
by sales organization where customer orders. Instead, the request of the goods is
forwarded to an external vendor who sends the material directly to the customer.
Here is what happens in third-party process:
1. Customer orders goods and a sales order is created in a sales organization

2. Purchase requisition is created automatically when sales order is saved.
3. Purchase order is created at the vendor in the MM purchasing application
(manually or automatically)
4. If the vendor does the outbound delivery to the customer, the goods receipt can
be posted in the system
5. Invoice receipt is created (invoice from vendor)
6. Invoice to customer is created (order based invoice)
SALES ORDER
Third-party process is triggered when the sales order with third-party item is created.
Depending on settings done in customization third-party item categories can be
automatically determined by the system (automatic third-party processing) or they
can be changed from standard item to third-party item category in sales order (manual
third-party processing).
Sales order type used for third-party – OR (standard order)
Item category for third-party – TAS
Schedule line category for third-party – CS
Let’s look deeper into the settings in the system done for automatic and standard
third-party process:
ITEM CATEGORY TAS:
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Create PO Automatic indicator is not marked in TAS. ALES is an item category for
third-party processing where this indicator is marked.
ITEM CATEGORY DETERMINATION
Item category TAS will be determined automatically for standard order (OR) and item
category group BANS (third-party item). Item category group can be found in
material master, Sales: Sales org.2 view.
SCHEDULE LINE CATEGORY CS
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Data: Order type = NB, Item Category = 5 and Acct.AssgntCat = X is the data for
Purchase requisition. If it is filled like above the purchasing requisition will be created
automatically as standard purchasing requisition (NB), with item category S and
acc.assign cat X. The mapping of item category (from 5 to S) can be found in IMG:
MM->Purchasing->Define External Representation of item categories. The definition of
account assignment category can be found in IMG: MM->Purchasing->Account
assignment->Maintain acc.***. categories
SCHEDULE LINE CATEGORY DETERMINATION
THIRD-PARTY PURCHASE REQUISITION
After saving sales order with item category TAS the purchase requisition is
automatically created. In order to see the document go to: Environment -> Status
overview and expand data for item, then expand data for purchase requisition as well:
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Double click on the requisition number and you will be taken to the purchase requisition
document. The other way is to go to schedule line where you can find the purchase
requisition number.
If third-party item has more than one schedule line with confirmed quantity > 0, then
purchase requisition is created for each schedule line.
It is wise to have the vendor determined in source of supply at this stage of the process
(i.e. source list)
MANUAL PURCHASE ORDER
The purchase requisition needs to be converted into purchase order in MM (t-code

me21n). The purchase order document type is NB (standard order), item category S,
that must be assigned to account. Thus account assignment category needs to be
given. In this example it is X (automatically taken during conversion from purchase
requisition, as it was defined in item category CS).
The definition of acct assignment category can be found in IMG: MM->Purchasing-

>Account assignment->Maintain acc.***. categories:
Note: There is also a third-party account assignment category created in the system
and its definition looks as follows:
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The mapping of item categories: IMG: MM->Purchasing->Define External

Representation of item categories:
AUTOMATIC PURCHASE ORDER
As it was written before – the purchase requisition is created automatically when sales
order is saved. It is possible to automatize the next step, the creation of purchase
order, as well. The ALE function is used for that purpose. The indicator for the
automatic creation of purchase order is not set for TAS item category. However, there
is a special item category – ALES which can be used instead in third-party process.
The indicator for the automatic creation of purchase order is marked in ALES by
default.
Prerequisites for the automatic creation of purchase order are as follows:
 The indicator automatic purchase order needs to be marked in item category

definition (item category ALES has it by default)
 Unique source of supply needs to exist for third-party item
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 At least the document type for the purchase order must be assigned for Sales
organization in customizing under Enterprise structure->Definition->SD-
>Define, copy, delete, check sales organization
If all above prerequisites are set up correctly, purchase order will be created when
sales order is saved. Then, it can be found in document flow in sales order.
GOODS RECEIPT
Since during third-party processing goods are moved directly from the vendor to the
customer, inventory management is not affected by this event. However, if sales
department would like to document and enter delivery to the customer in the system it
is possible depending on settings in customization. If account assignment category 1 is
used in item category definition, goods receipt is not possible, as the goods receipt
indicator is not set for this account assignment cat. If account assignment category X
is used, goods receipt is possible.
The goods receipt posting (t-code migo) would have the following effects:
 The warehouse stock is not updated

 The goods receipt is posted directly to consumption and the consumption
quantity is updated
 The order value is posted to a GR/IR clearing account for invoice verification
purposes
 The goods receipt can be traced in the purchase order history
The goods receipt posting should happen when the vendor reports that outbound
delivery was executed or customer confirms that delivery arrives.
Since no flow of goods occurs in the enterprise, the goods receipt posting results in
updates on value basis.
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INVOICE RECEIPT
invoice is posted following are updated:
 Purchase order history

 G/L accounts
 The vendor account in sub-ledger accounting, as well as the liabilities account
(general ledger)
CUSTOMER BILLING DOCUMENT
Once invoice receipt has been entered, the customer can be billed as well (T-CODE
VF01). Since an outbound delivery doesn’t exist for the third-party the invoicing will
be order based. In the item category TAS definition, the billing relevance indicator is
set to F by default. That means: relevant for order-related billing document: status
according to invoice receipt quantity. That is, the system allows invoicing the order
only when vendor’s invoice has been processed in invoice verification.
The customer invoice is created for the quantity specified in the vendor invoice. The
setting in the copy control for the third-party item category from sales document to
billing document specifies that the quantity from the invoice receipt is transferred to
the billing document instead of the order quantity (billing quantity indicator in copy
control is F)
THIRD PARTY RETURN PROCESS
Whenever customer find the damaged or defective goods on third party material we do third party
return process.
The third party return process is, whenever customer return the goods we can create the third party
return order.
when we save the return order system is automatically create purchase requisition, this “PR” based
to we create the return “PO” in this line item we check return in “PO”.
This “PO” will send to the vendor, vendor receive the goods from customer, than vendor rice the
credit memo to company, based on this credit memo we rice the credit memo to the customer.
This is the process of third party return.
To process of third party return we required sum configuration this are
 In third party return item category “TASG” we check return and we specific the
billing relevance is “F”.
Page 39 of 40
 When we creating the third party return order system determine the item category
“TASG” based on item category determination.
 We maintain the copy control between RE__RE in item level “TASG”.
Copy requirement as “28”
VBRK/VBRP : “002”
Billing quantity “F”
Positive/ negitve”+”
Pricing type “D”
Page 40 of 40

SAP SD NOTE-11 Third Party Order Processing Final

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SAP SD NOTE-10 Third Party Order Processing

Third-Party Order Processing

HAWA Trading Goods

Basic Business Flow for the Third Party Process

The other method is a Third party order processing method:

Processing Third-Party Orders in Sales

 Automatic third-party order processing

 Manual third-party order processing

Processing Third-Party Orders in Purchasing

How Purchasing Data Affects Delivery Scheduling

Comparing Purchasing Data with Sales Data

For Third Party Sales Process we need maintain below prerequisites:

 Material Type: HAWA

1. Define Schedule Line: CS

Select CS - Leg schedule line Category

Double click on CS below screen appears

In Business data Tab

Item category: [5] Third-party

Account assignment category: [1] Third-party

In Transaction flow Tab

2. Define Item Category: TAS

Select Item Category TAS

Double click on TAS

This process can also be related to the quantity of goods receipt.

3. Define Item Category Groups: BANS

Define item category Group BAAN

4. Assign Schedule Line Category TAS --> CS

5. Assign Item Category OR --> BANS-->TAS

6. Create Purchasing organization (optional)

7. Create purchasing group (optional)

IMG--> Materials Management--> Purchasing --> Create purchasing group

8. Assign Purchasing Org. to company code

Path: SPRO - Enterprise structure - Assignment - Materials management - Assign

9. Assign purchasing organization to plant

Path: SPRO - Materials Management - Purchasing - Maintain Purchasing Area

11. Create Material

Procurement type is “F” ExternalProcurement,

12. Create Vendor Account Group (optional)

Path: SPRO - Financial Accounting - Accounts Receivables and Accounts Payables -

13. Create Vendor Number Range for account Group (optional)

Path: SPRO - Financial Accounting - Accounts Receivables and Accounts Payables -

Click on Intervals and maintain as below

14. Number range assignment to Vendor Account Group (optional)

Path: SPRO - Financial Accounting - Accounts Receivables and Accounts Payables -

15. Create Vendor Master Data for Third-Party Sales

Transaction Code: XK01

Maintain the data in all the required fields

 Go to Next screen option

 Go to Next screen option

 Save and Exit

13. Create Vendor Info Record (if required) (optional)

Transaction Code: ME11

The info record allows buyers to quickly determine:

Automatic Data Transfer

1. Materials, quantities are transferred from SO to PO.

Third Party Processing Steps

Step: 1 Create Sales Order

 Pricing for Third Party Line Item.

 Click on Menu Edit--> Incompletion Log

 Save the document

Step: 2 List of purchase requisitions:

 Enter TCode ME5A/ME53N

Step 3: Create Purchase Order