How to set-up inter-company stock transfer process in SAP

How to set-up inter-company stock transfer process in SAP

with delivery and billing documents

Stock transfer is a movement of goods from one plant to another. The goods may be
of any material type and the supplying and receiving plants may belong to same or
different company codes. When the plants belong to same company code it is a case
of normal stock transfer but when the plants belong to different company codes it
becomes a case of inter-company stock transfer.

Before discussing inter-company stock transfer further, first let us look at how to set-
up normal stock transfer process (between plants of same company code). This will
help us to appreciate the additional settings required for inter-company cases.

As often used in practice, we will see the set-up of normal stock transfer process
using SD delivery. There is usually no relevance of billing in this process as the
transaction occurs within the same company code. Billing may be relevant in case
the plants are in different countries and plants abroad functionality is used.

Company Code A

Goods
movement
Supplying Receiving
Plant Plant

Normal stock
transfer

It is assumed that the reader has a basic knowledge of SAP Materials Management
and Sales & Distribution modules. The screen shots are from IDES, SAP R/3 4.7
Enterprise system.

Normal stock transfer

The steps for set-up of normal stock transfer are as follows:

1. Define which document type will be used for the stock transfer. For this,
assign document type of purchase order that is to be used for stock transfer
to the combination of supplying plant and receiving plant. For normal stock
transfer, document type UB may be used. The customizing path in IMG is
Materials Management
Purchasing
Purchase Order
Set up Stock

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Transport Order
Assign Document Type, One-Step Procedure,

Underdelivery Tolerance.

2. Assign the required delivery type to the combination of purchase order type
and supplying plant to specify that an SD delivery is to be created for the
physical stock transfer. Unless required otherwise, standard delivery type NL
may be used. The customizing path in IMG is Materials Management

Purchasing
Purchase Order
Set up Stock Transport Order
Assign
Delivery Type and Checking Rule.

3. Assign a valid sales area to the supplying plant in customizing. The delivery
document of type NL will be created in this sales area. The customizing path
in IMG is Materials Management
Purchasing
Purchase Order
Set up
Stock Transport Order
Define Shipping Data for Plants.

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4. Create a customer (only general data), preferably with same name as

receiving plant, in account group for internal customers. Assign this customer
to receiving plant in customizing. This customer will be used as Ship-to party
in the NL delivery. The customizing path in IMG is Materials Management

Purchasing
Purchase Order
Set up Stock Transport Order
Define
Shipping Data for Plants.

5. Goods movement type 641 for normal 2-step transfer is defined in standard
schedule line category NN in customizing. Ensure that this movement type is
maintained in the schedule line category used. 641 movement type is used
for posting goods issue in NL delivery. The customizing path in IMG is Sales
and Distribution
Sales
Sales Documents
Schedule Lines
Define/
Assign Schedule Line Categories. Unless required otherwise, schedule line
category NN should be assigned to standard delivery item category NLN in
customizing.

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6. After the customizing steps a few steps for master data set-up are required
for proper execution of the process. Extend customer assigned to receiving
plant (from step 4) to the company code and sales area of supplying plant
(from step 3).

7. Extend the materials to be transferred to both supplying and receiving plants

and sales area of supplying plant (from step 3).

The reader is encouraged to try out these steps in a sandbox or IDES environment to
gain familiarity.

Let us now see the settings required for set-up of inter-company stock transfer
process with delivery and billing document creation. New settings for inter-company
process are marked with a check sign.

Company Code A Company Code B

Goods
movement
Supplying Receiving
Plant Plant

Inter-company
stock transfer

Inter-company stock transfer with delivery and billing documents

1. √ Define which document type will be used for inter-company stock transfer.
Assign document type of the purchase order that is to be used for inter-
company stock transfer to the combination of supplying plant and receiving
plant. For inter-company stock transfer, document type NB may be used. The
customizing path in IMG is Materials Management
Purchasing
Purchase
Order
Set up Stock Transport Order
Assign Document Type, One-Step
Procedure, Underdelivery Tolerance.

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2. √ Assign the required delivery type to the combination of purchase order type
and supplying plant to specify that an SD delivery is to be created for the
physical stock transfer. Unless required otherwise, standard delivery type
NLCC may be used. The customizing path in IMG is Materials Management

Purchasing
Purchase Order
Set up Stock Transport Order
Assign
Delivery Type and Checking Rule.

3. Assign a valid sales area to the supplying plant in customizing. The delivery
document of type NLCC will be created in this sales area. The customizing
path in IMG is Materials Management
Purchasing
Purchase Order
Set
up Stock Transport Order
Define Shipping Data for Plants.

4. Create a customer (only general data), preferably with same name as

receiving plant, and assign to receiving plant in customizing. This customer
will be used as Ship-to party in the NLCC delivery. The customizing path in
IMG is Materials Management
Purchasing
Purchase Order
Set up
Stock Transport Order
Define Shipping Data for Plants.

5. √ NLCC delivery document will be relevant for only inter-company billing and
not normal billing. This status is indicated in processing tab in the delivery
header and is controlled by billing relevance of delivery item category
(standard NLC) in SD customizing. The billing relevance should be ‘D’. In case
automatic batch determination is active it should be ‘N’. The customizing path
in IMG is Sales and Distribution
Sales
Sales Documents
Sales
Document Item
Define Item Categories.

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6. √ Inter-company billing type IV is determined from sales order type DL in

customizing. DL is the default order type for delivery type NLCC. The inter-
company invoice is created in the sales area of the supplying plant (from step
3). Payer is the customer assigned to the receiving plant (from step 4).

7. √ Goods movement type 643 for normal 2-step cross-company transfer is

defined in standard schedule line category NC in customizing. Ensure that this
movement type is maintained in the schedule line category used. 643
movement type is used for posting goods issue in NLCC delivery. The
customizing path in IMG is Sales and Distribution
Sales
Sales Documents

Schedule Lines
Define/ Assign Schedule Line Categories. Unless required
otherwise, schedule line category NC should be assigned to standard delivery
item category NLC in customizing.

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8. √ For 1-step transfer (meaning goods receipt in receiving plant happens

automatically at the time of goods issue in supplying plant), tick the one-step
indicator in customizing for stock transport order. In this case, the 1-step
movement type 645 is used as specified in NC schedule line category. In 1-
step stock transfer only one material document is created for both goods
issue (movement type 645) and goods receipt (movement type 101). The
customizing path in IMG is Materials Management
Purchasing
Purchase
Order
Set up Stock Transport Order
Assign Document Type, One-Step
Procedure, Underdelivery Tolerance.

One-step indicator

9. √ After the customizing steps a few steps for master data set-up are required
for proper execution of the process. Create a vendor in receiving company
code and purchasing organization in account group for internal vendors.
Assign the supplying plant to this vendor in purchasing data view (Extras

Add purchasing data). This vendor will be used in stock transfer order as the
supplier.

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10. Extend customer assigned to receiving plant (from step 4) to the company
code and sales area of supplying plant (from step 3).

11. Extend the materials to be transferred to both supplying and receiving plants
and sales area of supplying plant (from step 3).

In practice it is often required to do a reversal of stock transfer process when the

receiving plant needs to return goods to the supplying plant. For such cases we
require the inter-company stock transfer return process.

New settings for inter-company return process are marked with a check sign.

Company Code A Company Code B

Goods
movement
Supplying Receiving
Plant Plant

Inter-company stock
transfer return

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Inter-company stock transfer return with delivery and billing documents

1. √ Define which document type will be used for inter-company stock transfer
return. Assign document type of the purchase order that is to be used for
inter-company stock transfer return to the combination of supplying plant and
receiving plant. For inter-company stock transfer return process NB document
type may be used as in the case of normal inter-company stock transfer. No
new document type is required. To create a stock transfer return order, tick
the return indicator on the purchase order item line. With this indicator, the
flow of goods is reversed but supplying and receiving plants remain the same.
In terms of goods movement, stock in the receiving plant decreases and in
the supplying plant it increases.

Return indicator

2. √ Assign the required return delivery type to the combination of purchase

order type and supplying plant to specify that an SD return delivery is to be
created for the physical stock transfer return. Unless required otherwise,
standard return delivery type NCR may be used. The customizing path in IMG
is Materials Management
Purchasing
Purchase Order
Returns Order

Store Return / Return Plant to Plant. Please note that the designated
supplying plant in case of return will be the same as that in normal stock
transfer.

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3. Assign a valid sales area to the supplying plant in customizing. The delivery
document of type NCR will be created in this sales area. The customizing path
in IMG is Materials Management
Purchasing
Purchase Order
Set up
Stock Transport Order
Define Shipping Data for Plants.

4. Create a customer (only general data), preferably with same name as

receiving plant, and assign to receiving plant in customizing. This customer
will be used as Ship-to party in the NCR return delivery. As this is already
done earlier, no additional customizing is required. Please note that the
designated receiving plant in case of return will be the same as that in normal
stock transfer.

5. √ NCR delivery document will be relevant for only inter-company billing and
not normal billing. This status is indicated in processing tab in the delivery
header and is controlled by billing relevance of return delivery item category
(standard NCRN) in SD customizing. The billing relevance should be ‘J’
assuming batch determination is not required for returns. The customizing
path in IMG is Sales and Distribution
Sales
Sales Documents
Sales
Document Item
Define Item Categories.

6. √ Inter-company billing type IG is determined from sales order type DLR in

customizing. DLR is the default order type for delivery type NCR. The inter-
company credit memo is created in the sales area of the supplying plant
(from step 3). Payer is the customer assigned to the receiving plant (from
step 4).

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7. √ Goods movement type 673 for normal 2-step cross-company transfer

return is defined in standard schedule line category NS in customizing. Ensure
that this movement type is maintained in the schedule line category used.
673 movement type is used for posting goods receipt in NCR return delivery.
The customizing path in IMG is Sales and Distribution
Sales
Sales
Documents
Schedule Lines
Define/ Assign Schedule Line Categories.
Unless required otherwise, schedule line category NS should be assigned to
standard return delivery item category NCRN in customizing.

8. For 1-step transfer return, tick the one-step indicator in customizing for stock
transport order. In this case, the 1-step movement type 675 is used as
specified in NS schedule line category. In 1-step stock transfer return, only
one material document is created for both goods transfer returns (movement
type 675) and goods receipt returns (movement type 161). The customizing
path in IMG is Materials Management
Purchasing
Purchase Order
Set
up Stock Transport Order
Assign Document Type, One-Step Procedure,
Underdelivery Tolerance.

9. √ There may be a special requirement in certain industries such as Consumer

Products to post returned goods in blocked stock instead of standard quality
inspection stock. In such cases new movement types may need to be created
by copying standard movement type 657 (GD returns blocked) and
referencing control settings of movement types 673 or 675 depending on

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whether 2-step or 1-step transfer is required. An important control setting is

the Movement type category field highlighted below. This field controls
whether the movement is cross-company. The customizing path in IMG is
Materials Management
Inventory Management and Physical Inventory

Movement Types
Copy, Change Movement Types. A reverse movement
type should be created for every new movement type created.

10. After the customizing steps a few steps for master data set-up are required
for proper execution of the process. Create a vendor in receiving company
code and purchasing organization in an account group for internal vendors.
Assign the vendor to supplying plant in purchasing data view (Extras
Add
purchasing data). This vendor will be used in the stock transfer order as the
supplier.

11. Extend customer assigned to receiving plant (from step 4) to the company
code and sales area of supplying plant (from step 3).

12. Extend the materials to be transferred to both supplying and receiving plants
and sales area of supplying plant (from step 3).

As you try out this set-up in a sandbox or evaluation system, it may be useful to
review the basic transactional flow in SAP for normal 2-step inter-company stock
transfer process. This process flow may be helpful during testing.

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Reference inter-company stock transfer process flow

1. Create a purchase order with transaction ME21N using document type and
internal vendor as described above and enter materials and receiving plant in
item lines (in case of stock transfer return tick the return indicator on the
item lines).
2. Create replenishment cross-company delivery with transaction VL10G. The
delivery type will be determined automatically.
3. Enter delivery number in transaction VL02N and post goods issue.
4. Display and check goods issue material document and accounting documents
in document flow.
5. Post goods receipt with reference to purchase order with transaction MIGO.
6. Display purchase order with transaction ME23N and check goods receipt
material document and accounting documents in Purchase order history at
item level.
7. Create inter-company billing document with reference to delivery document
with transaction VF01. The billing type will be determined automatically.
8. Display and check accounting documents related to billing in document flow.

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