5/3/2018 SAP Third Party Order Process Step by Step Configuration

 Home / How-to Topics • SD (Sales and Distribution) / SAP Third  RECENT POSTS

 POPULAR POSTS
Party Process Step by Step

SAP Third Party

SAP Third Party Process Step by Step Process Step by
Step
Third Party Order
October 22, 2008
process, your
• 12 Comments
company does not
deliver the items How to Explain
requested by a Output
customer. Instead, determination
HOME SAP OVERVIEW SAP TRAINING HOW-TO TOPICS SAP TUTORIALS
Procedure in
you pass the order
SAP SD?
along to a third party
TIPS & TRICKS October 22, 2008 • 9
vendor who then
Comments
ships the goods
directly to the The List of SAP
customer and bills you. A sales order may consist partly or wholly Education
of Third Party Order items. Occasionally, you may need to let a Partners in India
vendor deliver items you would normally deliver yourself. January 1, 2013 •
5 Comments
Process Flow

The processing of Third Party Orders is controlled via material The List of
types. Material types de ne whether a material is produced only companies
using SAP in
internally can be ordered only from third-party vendors, or
India
whether both are possible. For example, a material that is de ned
January 9, 2013 •
as a trading good can only be ordered from a third party vendor. 5 Comments
However, if you manufacture your own nished products, you may
also want, from time to time, to be able to order the same type of SAP Accounting
product from other vendors. Entries from
MM
SAP Third Party Order Process in Sales March 12, 2013 •
5 Comments
Third Party Order items can be created automatically by the
system, depending on how your system is set. However, you can
also change a standard item to a Third Party item during sales
processing manually.

Automatic Third Party Order processing:-

http://www.technosap.com/how-to-topics/third-party-process/ 1/12
5/3/2018 SAP Third Party Order Process Step by Step Configuration

if a material is always delivered from one or more Third Party

Tweets by @technosap
vendors, you can specify in the material master that the material is
a Third Party item. During subsequent sales order processing, the TechnoSAP
system automatically determines the appropriate item category for @technosap
a Third Party item: TAS. To specify a material as a Third Party item, fb.me/1bHwFRoiB
enter BANS in the Item category group eld in the Sales 2 screen of
Jun 16, 2017
the material master record.

Manual Third Party Order processing:- TechnoSAP

@technosap
In the case of a material that you normally deliver yourself but fb.me/1LCfIm9os
occasionally need to order from a third-party vendor, you can
Jun 16, 2017
overwrite the item category during sales order processing. For a
material that you normally deliver yourself, you specify the item TechnoSAP
category group NORM in the material master. @technosap

technosap.com/sap-basis/what…
If, as an exception, you
fb.me/4xq8Zsk9D
use a third-party
material, change the What is SAP BI …
entry TAN to TAS in the The below Step-…
technosap.com
ItCa eld when
processing the sales
Mar 7, 2016
document. The item is
then processed as third-
TechnoSAP
party item. @technosap
If address data for the ship-to party is changed in the sales order in
Embed View on Twitter
third-party business transactions, the changed data will
automatically be passed on to purchase requisition and also to the
purchase order, if one already exists. In the purchase order, you
can display the address data for the ship-to party in the attributes
for the item.

You can only change the address data for the ship-to party in the
sales order for third party business transactions, and not in the
purchase order. 

Processing Third Party Orders in Purchasing

When you save a sales order that contains one or more third-party
items, the system automatically creates a purchase requisition in
Purchasing. Each Third Party item in a sales order automatically
generates a corresponding purchase requisition item. During
creation of the requisition, the system automatically determines a
vendor for each requisition item. If a sales order item has more
than one schedule line, the system creates a purchase requisition
item for each schedule line.
http://www.technosap.com/how-to-topics/third-party-process/ 2/12
5/3/2018 SAP Third Party Order Process Step by Step Configuration

Purchase orders are created from purchase requisitions in the

usual way. For more information about creating purchase orders,
see the Purchasing documentation. During creation of the
purchase order, the system automatically copies the delivery
address of your customer from the corresponding sales order. In a
sales order, you can enter purchase order texts for each third-party
item. When you create the corresponding purchase order, the texts
are automatically copied into the purchase order. The number of
the purchase order appears in the document ow information of
the sales order.

All changes made in the purchase order are automatically made in

the sales order as well. For example, if the vendor con rms
quantities and delivery dates di erent from those you request and
enters them in the purchase order, the revised data is
automatically copied into the sales order you process third-party
items by creating a normal sales order. In overview for the order,
you can then overwrite the default item category (TAN in the
standard system) with the special item category for third-party
items: TAS

Billing Third Party Orders

If relevance for billing indicator for the item category has been set
to B (relevant for order-related billing on the basis of the order
quantity) in Customizing, the system includes the order in the
billing due list immediately. If, however, the indicator has been set
to F (relevant to order-related billing on the basis of the invoice
quantity), the system does not include the order in the billing due
list until an invoice from the vendor has been received and
processed by the purchasing department. In the standard system,
item category TAS (Third Party Order process) has been given
billing-relevance indicator F.

In the rst case, the Third Party Order is considered to be

completely billed only when the invoiced quantity equals the order
quantity of the sales order item. In the second case, each time a
vendor invoice is received, a customer invoice is created for the
quantity in the vendor invoice and the order is considered to be
fully invoiced until the next vendor invoice is received.

If you have activated billing-relevance indicator F for item

categories in Customizing, billing can refer to the goods receipt
quantity instead of the incoming invoice quantity.

You can control whether the invoice receipt quantity or the

quantity of goods received is relevant for billing in Customizing for
http://www.technosap.com/how-to-topics/third-party-process/ 3/12
5/3/2018 SAP Third Party Order Process Step by Step Configuration

copying control for billing at item level.

FOR YOUR PROCESS Individual Purchase Orders WELL GIVE THE

RIGHT SOLUTION

Individual purchase orders are used when your customer orders

goods from you that are not in stock and must be ordered from
one or more external vendors.

Process Flow 

During sales order entry, the system automatically creates a

purchase requisition item. The purchasing department creates a
purchase order based on the requisition and the vendor ships the
goods directly to you (unlike third party order processing, where
the vendor ships directly to your customer). You then ship the
goods to your customer. While the goods are part of your
inventory, you manage them as part of the sales order stock. Sales
order stock consists of stock that is assigned to speci c sales
orders and cannot be used for other purposes.

Process Flow for Third Party Order Sales

Customize the Third Party Order sales in summary:

Prerequisites for Third Party sales,
Purchasing org,
purchasing group,
assign the Purchase org to company code
assign Purchase org to plant,
should not maintain the stock in material, it should be trading
goods,

1. Create Vendor XK01

2. Create Material – 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

http://www.technosap.com/how-to-topics/third-party-process/ 4/12
5/3/2018 SAP Third Party Order Process Step by Step Configuration

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 con g, 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

http://www.technosap.com/how-to-topics/third-party-process/ 5/12
5/3/2018 SAP Third Party Order Process Step by Step Configuration

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 classi cation
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
Click 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

Also See: SAP Project Phase 

Recommended Reading For You

http://www.technosap.com/how-to-topics/third-party-process/ 6/12
5/3/2018 SAP Third Party Order Process Step by Step Configuration

Third Party Order Processing in Sales – Step by StepThird

Party order in Sales (in case of external procurement)  In
this business scenario Company A accept the sales order
of customer and asked third company/Vendor to deliver the goods
[…]

What is Partner Functions in SAP SD?Partner functions is

two-character identi cation key that describes the people
and organization with whom you do the business, and
who are therefore involved in transaction. Here is some […]

What is Purchase order in SAP?This post provides general

information about purchase order and how they are
processed with Material Management (MM) Purchasing.
The purchase order de nes a formal request or instruction […]

How to Explain Output determination Procedure in SAP

SD?Output determination Transaction code : (NACE T-
code) Output is a form of media from a business to one of
its business partners. The possible media forms are printouts, faxes,
telexes, […]

The Functions of Goods issue Posting in APFunctions of

Goods issue Posting:  Updating Stock Quantities : The
warehouse stock of the material is reduced by the delivery
quantity. You will nd information on inventory management in […]

Like this:

 Like
Be the first to like this.

 Share  Tweet  Share  Share

 Share

Comments(12)

Ashish  Mar 2, 2009

I have performed all the steps perfectly as

mentioned above, but at the time of creating

http://www.technosap.com/how-to-topics/third-party-process/ 7/12
5/3/2018 SAP Third Party Order Process Step by Step Configuration

delivery order in VL01N the error message shows

“no delivery relevant items in order no ______ order
type OR.(ORDER CANNOT BE DELIVERED)

What can be the probable reason for this ?

Reply

Praveen Tanwar  Nov 20, 2017

Hi Ashish,

Third party process does not require delivery

by the company. Goods will be delivered by a
vendor and that will be recorded as a GR
when vendor or customer informed the
company that goods are delivered to
customer.
You are getting the message because, third
party schedule line category (CS) is not
marked for delivery relevance.

Regards,
Praveen Tanwar

Reply

PKM  Oct 9, 2009

Fantastic, Marvellous. Thanks a lot

Reply

Silvia  Apr 30, 2010

I read with a great interest this post about third

party order. The request I have in charge at the
moment is to manage a sales order with some
“normal” items and some “third party” ones.
My question to you is how to manage the billing of
all items. I mean: what my users requested was that
all items are inside the nal invoice to the customer,
but I have some items managed through a delivery
note and some through a PO. How can I put

http://www.technosap.com/how-to-topics/third-party-process/ 8/12
5/3/2018 SAP Third Party Order Process Step by Step Configuration

everything together?
Thanks in advance for any help you can give me!
KR
Silvia

Reply

Praveen Tanwar  Nov 20, 2017

Hi Silvia,

Please try copy control settings. At item level

feild VBRK/VBRP.

Regards,
Praveen Tanwar

Reply

purna  May 18, 2011

Where in the above, it is mentioned as item category

TAS is not relevant for delivery, but in the below
process ow, VL01N is given. Can some one plz
eloborate…

Regards
Purna.

Reply

Praveen Tanwar  Nov 20, 2017

Hi Purna,

There is no VL01N step for third party sales

process, it might be mentioned mistakenly by
the author.
However, there is another process where
goods are purchased from vendor, vendor
delivers the goods to company
plant/warehouse and then company delivers
the goods to customer.
That process is known as “individual purchase
order”.

http://www.technosap.com/how-to-topics/third-party-process/ 9/12
5/3/2018 SAP Third Party Order Process Step by Step Configuration

Secondly, no item category decides whether

the goods are relevant for delivery or not.
That check box is only for some special items ,
l.e. text items.
The setting which control delivery relevance
for an item is Schedule line category.
Kindly check.

Regards,
Praveen Tanear

Reply

Lakshmikaran  Jan 24, 2018

Its wrong process.as per 3rd party business

process vendor will be deliver the goods to
customer and company will bill to customer
and vendor will bill to company.this is called
3rdparty.
and which you are explaining the process is
called Individual Purchase Order (IPO) means
when customer place the order to company
then company will raise PR to Vendor and
vendor will deliver the goods to company
then company will Deliver the Goods to
customer.

Reply

Ankit  Sep 26, 2011

Thums up for the document.Very Nice work

Reply

Purush Yadav  Jan 19, 2012

Excellent Explanation for third party Process,

Reply

http://www.technosap.com/how-to-topics/third-party-process/ 10/12
5/3/2018 SAP Third Party Order Process Step by Step Configuration

Praveen Tanwar  Nov 20, 2017

Hi Author,

Please suggest if the delivery step is added

mistakenly. If not then please suggest what is the
relevance of delivery (VL01N) in third party process.
Kindly remove VL01N, as it make confusion.

Regards,
Praveen Tanwar

Reply

devananda  Dec 9, 2017

Excellent Explanation for third party Process,

Reply

Leave a Reply

Your email address will not be published. Required elds are marked
*

Name*

Email*

http://www.technosap.com/how-to-topics/third-party-process/ 11/12
5/3/2018 SAP Third Party Order Process Step by Step Configuration

Website

Submit Comment

Notify me of follow-up comments by email.

Notify me of new posts by email.

Contact Us · About · Guest Post · Disclaimer · Privacy Policy

SAP FICO Tutorials · SAP SD Tutorials · SAP MM Tutorials · SAP Basis Tutorials · ABAP Tutorials
· SAP BI/BW Tutorials

  All the site contents are Copyright © www.technosap.com and the content authors. All rights reserved
All product names are trademarks of their respective companies. The site www.technosap.com is in no way a liated with
SAP AG. 2018

http://www.technosap.com/how-to-topics/third-party-process/ 12/12