THIRD PARTY PROCESS In business some materials may be procured from external vendors or some materials may be purchased from external vendors. Third party order is controlled via material types. Material types define whether a material is produced only internally can be ordered only from third party vendors or from both possibilities. Ex: Trading goods (HAWA) can only be ordered from third party vendors. Third party items can be created automatically by the system or standard items can be changed manually by the end user by changing item category during sales order processing. ‘The below scenarios we do third party process: ‘a. We don’t manufacture the products but we sell it to customers. b. We manufacture the product but if the stock is not available then we go for third party process. Whenever customer places order for third party material, while creating order in SAP, system automatically generates purchase requisition. PR is converted to PO and PO will be sent to vendor. Vendor delivers the goods to the customer. Vendor will raise invoice to company and company will raise invoice to customer. ‘Third party process can be done in 2 ways depending on the business: 1. Third party without shipping notification 2. Third party with shipping notification We will discuss both in the next step. 1. Third party without shipping notification: Company 9B (2) ——2G(3) G Order (1) Invoice to Customé& (7) Vendgt Invoice CUStOMEL Ge orictor (4) Delivery (5) By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 1THIRD PARTY PROCESS Configuration for Third party process without shipping notification: a. Create Material: the material is third party material then we need to m: category group as “BANS”. And the material should be a trading good (AWA). Noten! (canny Pack Industry sector Food and Rested Pro Matai! Type Trading goods 8] Change Mae TT Create Material CANDY PACKING (Trading goods) ee ee ee Nesese| GANDY PACKING Gna Pachig hiseomy) Seon a ve Sis On ar ow We tt Cone Mal sais Mate prcng 9p Vela rabate gp | Gen tem ost a wom | Pricing Fe Mat Product here Commassion gop |Meat groups | Material goup | = Matt! group 2 | Mater group J} Nate! gous 5 Mattid goup 3 Product atures CoPreduct tite 1 reduc ante 4 DPredue tints 7 DPreduc ate 10 DPiediet atibte 3 Dredie tite DiPrediet atnbte Peedi state 8 ‘And also under purchasing tab maintain purchasing group. By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 2THIRD PARTY PROCESS Tatind wel Coat trenSenssbin ett eamto Cen F (Deter anager (et mn L Dudiemndreipes 8 ave Serermsnrtspea 8 aye ‘hbmesesng one | ears ‘eats ese Under MRP2 view the procurement type should be “F”. Create Material CANDY PACKING (Trading goods) [=F Aastiona dats [FE Grgarazstional wis [ZB Check ccrwon dats ee Ponta ov More Plat ao [Frecsonentyes J ony I ‘Qvota ar vege snl pp 0 — ‘Storage lo for EP IT tery sched ‘Steck det or Dew waters! ehedng Panna Ovty Tene (9 Jaye on processing Time days Puaningextandar ‘Setar boy Net roguernts exon ‘Sty Sock Senco ei) Min sty stock covrage pote J ‘Sale tre ‘Say tesa oe aay ‘Stine peiodprste b. For third party material item category is “TAS”. For "TAS” the billing relevance is "F”. By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 3THIRD PARTY PROCESS I I Pwo OO eae Yiscres ine Awe \Ziwghevetreteare “louse ae Billing relevance “F” controls tha create invoice to the customer. third party process without MIRO system will not allow to Item category determination: By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 4THIRD PARTY PROCESS Order type “NB” will help to generate PR automatically in the back ground while creating sales order in third party process. Item category “5” controls that even if we do MIGO in third party process system will treat it as. dummy MIGO and stocks will not be updated. It will also help in generating PR automatically in ‘the background. Like sales transaction, MM transactions will also require item category. Without item category system will not allow to create MM transactions. When user create PR manually they maintain item category manually. But in third party process we are generating purchase requisitions automatically in the background. So, we are passing item category information from schedule line category to PR. ‘The account assignment category is “1”. Account assignment category controls that whether to generate accounting document or not at the time of MIGO in third party process. The item relevant for delivery is un-check in third party. Q. Even though third party process is not relevant for delivery why we require schedule line category? A. To generate PR automatically. Schedule line category determination: . Copy Control: In copy control OR >F2, in item category TAS we maintain billing quantity asf”. Billing quantity “F” controls that in third party process while creating invoice to customer the Invoice quantity will be copied from “MIRO”. In our case the documents which we are using are: YOR > YFZand YTAS By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 5THIRD PARTY PROCESS f. Create Purchase Organization: Path: SPRO > Enterprise structure > Definition > Materials Management > Maintain Purchasing Organization Change View "Purchasing Organizations": Overview Purchase Org Ot Assign purchasing organization to company code and plant. Path: SPRO > Enterprise structure > Assignment > Materials Management Change View “Assign Purchasing Organization -> Company Code": Overvie By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 6THIRD PARTY PROCESS Change View “Assign Purchasing Organization to Plant": Overview mon8 AY ano Puchong og RAVI ax Hare Par Stee & Create Vendor: T.Code: XKO1 Vendor: 6 ‘This is the configuration for third party without shipping notification. We will try to do the process now. Process: 1. Create Order: aie Fora ant te Bieta Tena Rah yeetiem Aare pgm Cyne) ome 2 OW Fatt a Oe C oma ‘And save the order. After saving the order, go to the change mode of the order and check whether PR is generated or not in schedule line tab. THe noe EK bne Pea By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 7THIRD PARTY PROCESS iandard Order 12239: em Data ‘Sinteanmin — {0) mene AUB) Wire ‘aa BENE) Go Fc Te Croc ete way Oriana Go to PR Change mode if we want to make any changes. T.Code: MES2N Ta Change Pras eg OE [rein Sat SHO) CSeetemeen, Docume sf mee la “a “ae cata flat <_< rr) (ATrGaD ra PaTote_ a] eae ot By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page &THIRD PARTY PROCESS I Create PO: T. Code: MEIN Raise PO (NB) with reference to PR. After giving PR details go to the delivery tab and un-check goods receipt. Go to Invoice tab and maintain tax code (T.Code: FTP) Po: 4500017188 Create MIRO: Give company code in the ial screen and press enter. In the next screen maintain invoice date, PO number and press enter. Enter balance amount in baseline tab amount and enter base line date in payment tab and save the transaction, By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 9THIRD PARTY PROCESS Enter Incoming Invoice: Company Code AVM ea ee a ne Le J Sa] coger JT — i) Enter balance amount in baseline tab amount and enter base line date in payment tab and save the transaction, Enter Incoming Invoice: Company Code HAVM (ime | eeaetee FAGAVNTe oto 8 x Daye, Da sea Gae 21.00.2818, By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 10THIRD PARTY PROCESS After giving baseline amount and base line date the balance field will become indicator will be highlighted, which means we have done with the MIRO transaction, " and green Save the transaction and create invoice. Document no. 5105608733 created. IV. Create Invoice: Create invoice and check the document flow. Invoice (F2) (F2) Create: Overview of Billing tems see SSMNNNET) vase wi Payer ‘aoa Rabo eGo / 1674/1 SED Neamt ing One 21.49.2014 A Sant aca Tats) ‘awn PACRING Faia Invoice has been created. Check the document flow by going to VAO2, Document Flow ‘Business partner 00000000) Rainbow ee Creams 1B Purchase order as00017168 2i@204 © B inoice (2 0080035347 2iga20 1B Accounting sooumert OO000010D8 21.09 2014 Net cleared 2. Third party with shipping notification: In standard third party process without vendor invoice (MIRO) system will not allow to create invoice to customers. But in some scenarios vendor will not send the invoice immediately. In that case company doesn't want to wait tll vendor invoice to raise invoice to customers. In this case company ask vendors to send shipping notification (delivery notification). When company receive shipping notification, they create MIGO in SAP. While creating invoice to customer system considers MIGO. By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 11THIRD PARTY PROCESS Company meen (2) menB(3) 6) Order (2) Invoice to Customé (7) Shipping/Notification CUStOM EL eer (1) Delivery (5) Configuration Steps: a. The item category group for the third party with shipping notification and without shipping notification is same (BANS). b. For third party material item category is “TAS”. For "TAS" the billing relevance is “6”. Change View “Maintain Item Categories”: Details Billing relevance "G” controls that in third party process without MIGO system will not allow to create invoice to the customer. c. Copy Control: In copy control OR >F2, in item category TAS we maintain billing quantity as oe By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 12THIRD PARTY PROCESS In our case the documents which we are using are: YOR > YF2and YTAS Change View “Item”: Details Billing quantity “E” controls that in third party process while creating invoice to customer the invoice quantity will be copied from “MIGO” Process: |. Create Order: VAOL Create Standard Order: Overview By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 13,THIRD PARTY PROCESS Go to VA02 and check whether PR got generated or not. Go to PR Change mode if we want to make any changes. T.Code: MES2N THEE Change Purchase Reg 1013623 II, Create PO: T. Code: MEN Raise PO (NB) with reference to PR. [After giving PR details go to the delivery tab and un-check goods receipt. Go to Invoice tab and maintain tax code (T.Code: FTP) By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 14THIRD PARTY PROCESS aaaeeaee BM ASH Lear) saree) npORERO coarse Toes) Check goods receipt option under delivery tab and save. Po: 4500017189 Il, Create MIGO Enter PO number and click press enter By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 15THIRD PARTY PROCESS Scroll down and check Item ok check box and click on check tab and post it. Goods Receipt Purchase Order #5000719 User bayou aa Bb Material document will be posted IV. Create MIRO Enter incoming im {neice dae ‘Ree eT. 09.2014 ‘Ss HYDERABAD eww jie eee | ZI 1 ARATT «Cay — 8) (ee pcaet te EEE oyetems —_50ays8% 10a? % | Puevese OreScheadngAgeenen 0) 0017109) a By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 16THIRD PARTY PROCESS V. Create Invoice T.code: VFOL Invoice (F2) (F2) Create: Overview of Billing Items a ee (beese) —ftoey arvana) [tomer Raton eG /16741N- SUED Neon a2 andy Packing it) aa ‘And check the document flow. Go to VA02 and see the document flow. “Document Flow ‘Business partner 000700001 anbow ee Creams B invoice 2) 005003638 77:082014 Open With this we are done with the shipping notific party process with shipping 1 By Srinivasulu Algaskhanpet (Sr. SAP SD Consultant) Page 17