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Introduction

In the usual SAP automotive space, vehicle buy-back or trade-in is applicable for used cars scenarios, where the selling entity (OEM Sales Organization/Importer/ National Sales Center – NSC henceforth) buys the vehicle back from the buying entity (Dealer). There are many occasions where dealer returns the vehicle back to the OEM/Importer/NSC. In such cases, only possible way is the ‘Returns’ process by issuing a 100% or returns credit memo. However, in certain countries, it is not legal to return a vehicle once the selling activities have been completed, unless it is damaged or a wrong delivery. Hence, a vehicle ‘take-back’ process is applicable in such scenarios, where in the buyer wants to return/sell the new vehicle invoiced to him, back to the seller.

Why Vehicle Take-Back?

1.    1. There might be scenarios where a dealer has ordered for a vehicle from the importer/NSC, the vehicle is invoiced to him, but later wants to give the vehicle back to the seller, may be because of loss of customer.

2.    2. This is needed as part of the legal compliance of the country specific business scenario.

Vehicle Creation and Invoicing Process in VMS

In a typical vehicle lifecycle, following business activities take place:

·         Create a quotation and order

·         Create vehicle with required configuration

·         Build the vehicle and mark it for delivery to customer

·         If NSC is involved in the selling of the vehicles a purchase order and invoice will be created

·         Creation of Sales order, Delivery, Goods Issue and Outbound Invoice

Pictorial representation of vehicle ordering & invoicing process (in a typical make-to-stock or order to stock scenario) is as below:

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Following screenshots represent the creation of process documents for a vehicle:

Purchase Order Creation:

/wp-content/uploads/2014/03/2_409359.jpg

Goods Receipt for above Purchase Order:

/wp-content/uploads/2014/03/3_409361.jpg

Incoming Invoice:

/wp-content/uploads/2014/03/4_409363.jpg

Once a vehicle is created and configured, purchase order is created, along with the goods receipt and inbound invoice. Then, a sales order is created, along with the delivery, goods issue and outbound invoice.

Following figure represents the take-back process for a vehicle which is invoiced to a dealer:

Vehicle Take-Back Process

Below figure pictorially depicts the processes involved in vehicle take-back

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1.    1. Create vehicle take-back purchase order, using the transaction ME21n, for the customer (which is defined as a vendor) based on the values of the outbound invoice values.

2.    2. Create vehicle take-back goods receipt document with reference to the take-back purchase order, using the transaction MIGO. This is to nullify the original goods issue which was posted during the original sale of the vehicle.

3.    3. Create vehicle take-back invoice document with reference to the take-back purchase order, using the transaction MIRO. This is to nullify the original outbound invoice which was created during the original sales of the vehicle.

4.    4. Once the vehicle is made available for resale, a new sales order document can be created for any other dealer/customer.

Pre-Conditions:

1.    1. The customers are all defined as vendors as well, in order to ensure that the creation of the purchase order for that particular vendor by the OEM/NSC goes through.

2.    2. The vendor master (XK01) is created with the corresponding data for that particular customer as in the customer master data (XD03). The link for the customer-vendor can be created by using vendor field in the customer master of the dealer.

3.    3. The standard function modules being used to create the purchase order / goods receipt / inbound invoice need to be modified in order to ensure that the flow of the document creation is allowed, and also to ensure if the automatic population of the values from the outbound invoice to the take-back purchase order is to be allowed.

4.    4. If custom developments are involved, then corresponding custom VELO actions have to be enhanced to incorporate above pre-requisites.

Bibliography & References:

•       www.help.sap.com/printdocu/core/print46c/en/data/pdf/…/LOVC.pdf

•       www.scn.sap.com/thread/1288644

•       www.scn.sap.com/docs/DOC-25224

About the Author

Vinod Sripada is an SAP SD Consultant in Infosys Ltd. He has 2 years of domain experience in sales and marketing vertical of an Indian automotive major, and 6 years of SAP SD experience in the automotive vertical. He has worked extensively on industry specific SAP solution of IS-Auto. He holds a B.Tech degree in Computer Science from JNTU, Hyderabad followed by MBA from Nirma University, Ahmedabad.


PS: Please note that the 3 SAP screen shots used in the document were provided by Prasanna Mukdapu, who is an MM Consultant in Infosys Ltd.

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3 Comments

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  1. VISHAL JAJOO

    Vinod, Thanks for sharing helpful document.

    wondering if there is possibility of cancelling / reversing invoice and goods movement done while selling vehicle. If that is possible then there is no need to create extra document types.

    While taking back vehicle to inventory, reason can be assigned to track reason of cancellation. there is action to GISR – Cancel Goods Issue and OIVR – ancel Outgoing Invoice

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