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SD-MM Integration

The document outlines the SD-MM integration process for third-party sales, detailing how customer orders for non-manufactured products are handled through SAP. It describes two types of third-party processes: one with immediate vendor invoicing and another requiring shipping notifications for invoicing. Key steps include sales order creation, purchase requisition conversion, vendor delivery, invoice verification, and customer billing, with specific item categories and order types noted.

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43 views2 pages

SD-MM Integration

The document outlines the SD-MM integration process for third-party sales, detailing how customer orders for non-manufactured products are handled through SAP. It describes two types of third-party processes: one with immediate vendor invoicing and another requiring shipping notifications for invoicing. Key steps include sales order creation, purchase requisition conversion, vendor delivery, invoice verification, and customer billing, with specific item categories and order types noted.

Uploaded by

pawarsharvari3009
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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SD-MM INTEGRATION ( 3 PARTY PROCESS)

Definition – when a customer places a order on company for the products which we donot
manufacture then SAP program automatically creates a PR ,then that PR gets converted into
PO . Purchase dept release PO to vendor , Vendor manufacture the product and send it to
customer , when customer confirms that he has received the product then we raise an
invoice against them. When goods reach the Cust we do Statistical MIGO. Also called pseudo
MIGO. This does not increase stock.
After this we raise Cust Invoice F2 on the Customer
There are 2 types of 3 party process :
a) Third Party without Shipping process ( Standard one) : Here vendor sends an
immediate invoice and based on MIRO we raise an invoice to customer.

b) Third Party with Shipping process : In this scenario vendor is not ready to send the
invoice immediately .If vendor is not sending the invoice immediately then we
cannot raise invoice to customer because we don’t know that how much quantity
vendor has delivered to customer. In this situation we ask vendor to send shipping
notification to the company which consists of material details and quantity details
which vendor has delivered to customer. Then we can do MIGO in SAP and based on
MIGO quantity we raise invoice to customer
Process Flow of Third-Party Sales in SAP SD-MM Integration

1. Creation of Sales Order (VA01)

• A customer places an order.

• In the sales order, the system automatically determines the item category as TAS (Third-
Party Sales).

• The schedule line category CS (Third Party) is assigned.

• The purchase requisition (PR) is automatically generated.

2. Purchase Requisition (PR) in MM (ME52N)

• The PR created in SD is now visible in MM.

• The MM team reviews and converts this PR into a purchase order (PO).

3. Purchase Order (PO) Creation (ME21N)

• A purchase order (PO) is created and sent to the vendor.

• The vendor will supply the goods directly to the customer.

4. Vendor Delivers the Goods

• The vendor ships the goods directly to the customer.


• Since the company (your organization) does not handle inventory, no goods movement (GR)
is required in SAP MM.

5. Vendor Invoice Verification (MIRO)

• The vendor sends an invoice for the goods.

• The finance team does invoice verification and records the liability to the vendor.

6. Customer Billing in SAP SD (VF01)

• The company bills the customer based on the vendor's invoice.

• No goods movement occurs, but revenue is recognized.

7. Payment to Vendor (F-53)

• The company pays the vendor as per agreed payment terms.

Important Points in Third Party Process :

Item Category – TAS


Item Category Group – BANS

Schedule line Category – CS

Order Type – NB

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