SAP Third Party Process
What is Third Party?
The company’s Vendor supplies material to the company’s Customer (Or) Vendor Supplies material to a customer of a customer is called the Third-party.
Our Company sales department receives a PO from our customer for the material.
Then the company sends a PO with a delivery address as Customer to supply this material
The vendor will supply this material directly to the customer
The vendor will send an invoice to the company
Vendor bill will be settled after the company got the payment from the customer
In SAP the Third Party procurement will be done in two ways.
A) With SD Involvement
B) W/o SD Involvement
A) With SD Involvement:
- Normally Salespeople will take the PO from the customers & they create a Sales Order (VA01) with 3rd party Item cat 'TAS'
- In the background automatically Purchase Requisition (PR) will be created with Item category 'S' along with the Delivery address.
- Purchase Dept creates the PO with Item cat 'S' and a/c assignment cat '1'. here customer adds will be copied from the PR.
- Then this PO will be sent to the Vendor.
- Based on the PO line items vendor will supply material directly to the customer and invoice to our Purchase organization.
- Based on the conditions provided in the PO
- If it is PO based invoice verification you can create a bill (Bill to the Customer) without waiting for Vendor IV.
- If it is GR based invoice Verification we must very the vendor invoice before creating a bill to the customer
B) W/o SD Involvement:
- No sales order, No PR is generated in the background
- You can directly create a PO, based on the requirement of the customer with the item cat 'S' and A/c assignment cat 'X' (auxiliary a/c)
- Rest of the steps are same as above
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Third-Party Scenario Steps
The customer sends the PO to the Sales dept of the Company.
Create customer (XD01) with the account group as sold-to-party
Salespeople will create a Sales Order (VA01) with item category as ‘TAS’, i.e. Third Party.
Create material with
- Material type as HAWA type - Adding a sales view - In Sales Data 1 view:
- General.Item Cat BANS, Division, Tax code
- In sales Data 2 view:
- Item Cat group: BANS
- In sales General/Plant view:
- Availability Check: 01, Transport Group as 0001, Loading as 0001
- In Purchase view: Check Automatic PO - In-Plant data storage loc 2 view: check negative stock allowed. - Accounting view: Valuation class: 3100 (for – HAWA), Price:
Create Vendor (Tcode XK01) – in purchase data view Check Automatic PO checkbox
Maintain Purchasing Info Record (T code ME11) for these vendors and material
Change the SO (VA02) and go to Schedule lines and check whether PR is created?
PR will be generated in the background with Item category 'S' and A/c assignment category '1' or X aux a/c
T code ME59 and enter relevant data to create an automatic PO with respect to PR
Send PO to Vendor.
The vendor delivers the material to the customer.
- If it is PO based invoice verification you can create a bill (Bill to the Customer) without waiting for Vendor Invoice Verification.
- If It is GR based invoice Verification we must verify the vendor invoice before creating a bill to the customer
We can do GR and IV however stock should not be updated.
[Note: If you are not always allowing third party order processing then you can create a material master record with item category group as ‘NORM’ and procurement should be marked as ‘X’ meaning both types of procurement (in-house manufacturing and external product) ]