Third party order processing is as follows:
Assume three companies X, Y and Z
X – The company,
y – The customer
Z – Vendor
When ever X gets a PO from Y to supply some goods, X has an option of either manufacturing those goods or procuring those goods.
If he is procuring the goods, there are two methods that are generally followed:
Method 1) After receiving the PO from Y, X creates a sales order against Y.
Now at the same time he also creates a PO to a vendor Z to produce the goods
Z produces the goods and supplies to X
X receives the goods from Z
Then X delivers the same goods to Y.
After that X invoices Y and Z invoices X.
Note : Here there is no direct/ Indirect relation between Z and Y.
This process is known as Trading Process. and the Material here is created with Material type HAWA.
The other method is a Third party order processing method:
Here the glaring difference is that instead of Z supplying the material to X and X in turn supplying the same material to Y.
X authorizes Z to supply the material to Y on his behalf and notify him once the delivery is complete.
Now Z supplies the material to Y and acknowledges the same to X.
Z will send a copy of delivery acknowledgement and invoice to X.
After receiving the delivery confirmation and invoice from Z, X has to verify the invoice and this process is known as invoice verification and is done in SAP through Tcode MIRO.
The next step for X is to create an invoice and submit to Y
Only after the invoice verification document is posted then only X can create an invoice for Y.
This is the business flow that is followed for third party order configuration.
There are few steps that have to be configured to enable the system to function as mentioned above.
Step1)
If you are always followwing a third party process for a material then you have to create the material using item category group BANS.
The procument type should be marked as External procurement (F) in MRP 2 view of the material master record.
if you are not always allowing third party order processing then u can create a material master record with item category group as NORM and the procurement type should be marked as ( X) meaning both types of procurment ( in house manufacturing and external procurement).
step 2)
the item category in the order should be manually changed as TAS.
For that you need to confugure the item category determination
ord type + item cat grp + usge + Hiv level = Item cat + Manual item cat
OR + NORM + + = TAN . + TAS
OR + BANS + + = TAS
Step 3)
make sure that during the item category configuration for TAS you need to mark relevnat for billing indicator as F
step 4)
The schedule line cateogry for this type should be CS.
make sure that you mark subsequent type as NB – purchase requisition in this schedule line category as this will trigger the purchase requision order immediately after the creation of the sales order and the PO to vendor is created against this purchase requiesion.
SAP SD Forum 
hi
i was trying to work out the second scenario of third party.even then i was not able 2 get.plz do the needful
the procurement type is in display mode with “f” in hawa materiaql type..so i was using another material type finished goods which has x in procurement type
Hi
Bye
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Howdy
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The style of writing is very familiar to me. Have you written guest posts for other blogs?
Hi,
In Third Party process is the Billing price PR00 determined from a condition record of Customer or copied from the Supplier Invoice?
Can we get this (SD Invoice price = Supplier Invoice price) using a standard pricing procedure?
Tks
Hi,
Can u explain me, what document vendor sends to customer along with material??????? Z to Y
In third party process a vender will not send the bill to customer directly inside he will pass the bill to company that is (migo) then the company will rise the bill to customer(miro) based on migo
very useful
very useful
for sd
Migo is the good reciept.. It just provides the info how much quantity that he did deliver to the customer.. and Miro is invoice verification
Dear All, little bit correction needed here in third party process vendor supplies directly to the customer instead of company,,,,,,,
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Many thanks
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