Third-party process overview
In a third-party sales process within SAP, the sales order is created by the sales department
of the company receiving the customer order. This sales order triggers the subsequent steps
of the process, including the creation of a purchase requisition and then a purchase order to
the vendor.
Here's a more detailed breakdown:
1. Customer places an order:
A customer places an order with a company for goods or services.
2. Sales order creation:
The sales department of the company receiving the order creates a sales order in SAP.
3. Automatic purchase requisition creation:
In third-party processing, the sales order triggers the automatic creation of a purchase
requisition within SAP.
4. Purchase order creation:
The purchase requisition is then used to create a purchase order to the vendor, who will
directly ship the goods to the customer.
5. Goods receipt and invoice processing:
The vendor ships the goods to the customer, and the company may record a goods receipt in
SAP, even though the goods were not physically received. The company then receives and
processes the vendor's invoice.
6. Customer invoice creation:
Finally, the company creates an invoice to the customer based on the sales order.
So, while the vendor ultimately fulfils the order, the sales department initiates the process
by creating the initial sales order.
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).
Basic Settings
MM01 – Mat Type will be HAWA (Generally for Third party sales) or FERT. Maintain Item
Category group as BANS (Third-Party Item) in Sales Ord 2 view. In Purchasing view,
Purchasing group should be maintained.
VOV8 – Maintain Sales order type used for third-party – OR (standard order)
VOV7 – Maintain Item category for third-party – TAS
Billing Relevance ‘F’, in Item Category the customer billing is allowed only after MIRO
Billing Relevance ‘G’, in Item Category the customer billing is allowed only after
MIGO(without MIRO).
Create PO Automatic indicator is not marked in TAS. ALES is an item category for third-party
processing where this indicator is marked.
VOV4 – Assign Item Categories (Sales Document Type – OR + Item Category Group – BANS +
Default Item Category – TAS)
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.
VOV5 – Assign Schedule line category for third-party – (Item Category – TAS + Prop Schedule
line category - CS)
VOV6 – Maintain Schedule line category for third-party – CS (Leg)
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
Process:
VA01 VAO3 (Purchase Requisition) ME21N (Purchase Order) MIRO – Invoice Receipt
VF01 – Customer Invoice (Cust Billing)
The system will allow to create Customer Invoice (Cust Billing) only after MIRO.
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:
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:
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
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.
INVOICE RECEIPT
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 subledger 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)
