Based on the purchase order sent by the customer, SD department will raise a sales order.

Based on the general item category group of material entered by the system, the system will
come to know that the material is a third party material.
General Item Category Group (BANS)
Item Category (TAS)
Schedule line Category (CS)
Based on the settings done for CS the system will automatically raise a Purchase Requisition
and sends it to External Vendors.
Now MM Department based on the Purchase Requisition will raise Purchase Order and
sends it to External Vendor
Now the Vendor will deliver the goods to the Customer and at the same time will send an
Invoice to MM Dept.
As Physical goods received is by the customer and not by MM Dept, so Statistical goods
receipt is done by MM for Document Purpose
Then Customer sends the Proof of Delivery (PoD) to the Company
MM dept compares the quantity received by the customer based on the PoD and the
Corresponding Invoice received from the Vendor (Logistic Invoice Verification)
Now finally SD Dept send an invoice to the customer (Order Related Billing)
Note: In TAS category Billing Field is u2018Fu2019, which is billed for target quantity.
Third Party order process configuration
Step 1: Creation of material
Go for the SALES : SALES ORG 2 . view and give the BANS
Step 2 : Item Category TAS setting T.Code: VOV7.
Billing Relevance :F: Order-related billing doc. - status according to invoice qty
Step 3: Schedule line Category CS setting.
Settings are
1.Order type: NB:
2. Item Category: 5
3. Acc. Assign. Cat 1:
Step 4: create a sales order
The sales order will pick up the item category: TAS
The item category TAS is picked because of the configuration done in the material master. Item
category group BANS.
The schedule line category is CS.

Standard Order 43 11528 has been saved

Step 5:

Go for change mode of sales order (VA02). Select schedule line icon, in the new
Screen selects the procurement tab page. Note the purchase requisition and save.
Step 6: Create A purchase order ( Me21n). based on the purchase requisition.
in the above screen select the document overview on buttion. U will find the below screen.
when u select the variants , list will be displayed. In that select purchase requisitions, again a list
will displayed of purchase requisition , select your purchase requisition and drag and drop in the
net obove

When you drop the PR automatically the data will be picked up for the PR to PO and then save
the PO.
Standard PO created under the number 4500017018
Step 7: now mm create a invoice base on the po: ( MIRO)
Post invoice
Document no. 5105608630 created
Invoice posting document

Step 8: Now create a billing vf01

In this billing document give the order no. it is order related bBilling document generated based
on the invoice posting

Document 90035796 has been saved

Accounting document

thansk
Kuntla
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Re: THird party sales complete scenario

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Safeer Rahman Jul 30, 2008 12:38 PM (in response to rajneesh mathur)
Hi Rajneesh...
Kindly go through the steps which will give you a brief idea on Third party sales....
Process Flow for 3rd Party Sales
Customize the third party sales in summary:
1. Create Vendor XK01
2. Create Material u2013 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
Hope you find this useful...
Kindly reward if you find this informative...
Thanks..
Safeer Rahman
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Rajesh Banka Jul 31, 2008 11:45 AM (in response to rajneesh mathur)
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 -->
Topic:
Third Party Scenario with Shipment
Third Party Scenario without Shipment
Regards,
Rajesh Banka
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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.

1.
2.
3.
4.
5.
6.

Here is what happens in third-party process:

Customer orders goods and a sales order is created in a sales organization
Purchase requisition is created automatically when sales order is saved.
Purchase order is created at the vendor in the MM purchasing application (manually or
automatically)
If the vendor does the outbound delivery to the customer, the goods receipt can be posted
in the system
Invoice receipt is created (invoice from vendor)
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 thirdparty 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
Lets look deeper into the settings in the system done for automatic and standard third-party
process:

ITEM CATEGORY TAS:

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

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 categoryS 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:

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 underEnterprise 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 doesnt 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 vendors 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)
5551 Views

THIRD PARTY ORDER PROCESSING

In third party order processing company does not deliver the goods to the customer, instead of
that we pass the sales order to third party vendor, vendor directly deliver the goods to customer
than vendor rice the invoice to company, based on this company rise the invoice to customer,
this called as third party.
To processing of third we required some master data and configuration settings we required.
THIRD PARTY ORDER PROCESSING:
Whenever customer place the order for third party material, when we save the sales order
system automatically create the purchase requisition, with reference to this PR we create the PO,
this PO will send to vendor , vendor directly deliver the goods to company, then vendor raise the
invoice to company for this we create the MIRO, based on MIRO quantity we rise the invoice to
the customer, this is the process of third party processing.
For doing third party processing we required sum master data and configuration data we
required.
MASTER DATA SETTINGS ARE:
In third party material we specific the item category as BANS, the material must having the
purchasing tab page.
Whenever customer place the order for third party material system determine the item
category is TAS, in TAS we specific billing relevance is F, this control without doing the MIRO
system is not rice the invoice to the customer.
Than system determine the scheduline category is CS in this CS we specific the order type
is NB, item category is 5, account assignment category is 1.
Order type NB: order type NB will helps to generate PR automatically when save the third
party sales order.
Item category : item category will help to pass the item category information from sheduline
category to PR.
Account assignment category:

 In copy control between OR __ F2 in item level TAS we specific the billing Quantity is F, this
control to while creating the invoice to customer system copy the MIRO Quantity.

This is the setting we required for doing the third party processing.

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.
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