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A short InterCompany process scenario in the Order To Cash Process

I have been asked to explain the product planning details and how that links to Sales Orders and Outbound Logistics.

The typical process is something like this

If I would have Company A that is selling product XXXX to the End Customer B via a ‘Release’ of a Sales order

Would it then be possible to automatically release the customer demand, run MRP, automatically create the Purchase Request, automatic transfer to Purchase Order (for Supplier = Company C) and then transfer the Purchase Order into a Sales Order for Company B?

Company B will then procure and deliver goods to Company A, who will then deliver to their end customer.

So firstly we need to ensure MasterData is complete

Scoping for Purchasing Between Companies needs to enabled

Ensure that you have Company Specific Price Lists enabled

This is to ensure that Sales Price/Purchase Price are aligned to automatically create and release the interco sales order.

Company A & B need to ensure Collaboration Data is set (in Account Management)

And the same in Supplier Base Work Center

Ensure that the product you wish to purchase/sell via the intercompany process is enabled for sales and planning across ALL the entities

In this example SB1001 is externally procured by P10 (since P20 is outside of P10 companies), and is bought externally by P20

ensure that the product is active for sales in both companies too, and the product valuation is active too for both companies.

It is also helpful to create an employee work distribution to assign an Responsible Employee for Sales.

and an Organisational Work Distribution to ensure that interco Sales Orders are assigned to the correct Sales Org (if you have more than 1).

To Automate the purchase process, there must be a Purchase List Price or Purchase Contract for SB1001 between the two companies.

Ideally the purchase price/contract value should be the same amount and currency as the valuation data.

 

Once all of this MasterData is aligned, creating a Customer Sales Order should now flow through planning, to purchasing, to outbound logistics. Lets Try!

  1. Customer Sales Order creates demand in Supply Planning
  2. Run Planning creates Purchase Proposal
  3. Released Purchase Proposal creates Purchase RequestsThese Purchase Requests have been assigned the correct supplier based on the List Price/Contract being in place. We can Bundle and Order directly from this screen.
  4. Purchase Order to Sales Order You can see from the sent purchase order that an Sales Order between the 2 companies is automatically created.
  5. With stock already in Company B Sales Order is released to outbound logistics for delivery.
  6. After issuing goods Intercompany Invoice request is created automatically Once released the customer invoice creates supplier invoice in opposite company
  7. Company A needs to receipt goods first before supplier invoice can be posted. (Standard 3-way matching)
  8. Company A can receipt goods in via inbound logistics
  9. Company A can now despatch goods to end customer and Invoice

 

Optional Automation Activities

  1. You can automate the planning runs, you need to set up a planning run for each planning area, and specify products. then schedule the run to execute regularly.
  2. Automate Purchase Requests to Purchase Orders via scoping question
  3. Automate the Customer Invoice Request => Release Invoice

Please comment with any thoughts you may have.

 

John

 

4 Comments
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  • dear John:

    Thanks for your explanation.

    I tried to follow your step but stuck at step 2- Run Planning creates Purchase Proposal , there is nothing happen.

    Do you have any idea to i didn't setted in system?

    Thanks in advance.

     

    Lucy

    • Hi

      did planning run but not create any proposals?

      Are you sure stock is needed?

      is the planning data for the material correct for the planning area?

      was there any error message?

      John

      • dear John:

        did planning run but not create any proposals?–> yes

        Are you sure stock is needed?–>yes, and i don’t have stock in company A, i need to purchase from company B, there are some stock in company B, company A and B are affiliate company.

        is the planning data for the material correct for the planning area?–>yes, i setted data in Scope Maintenance.

        was there any error message?–> as below

        when i check the Customer demand, system show below error message

        “External fulfillment requested but third-party processing not scoped”

        and i check KBA it show “2459362 – Error Message: External Fulfillment Requested But Third-party Processing Not Scoped”

         

        Resolution

        1. Go to the Sales Orders work center.
        2. Go to the Sales Orders view.
        3. Open sales order ABC (ABC represents the ID of the sales order).
        4. Click on View All.
        5. Navigate to Items tab.
        6. Select the line item XX.
        7. Under the Item Details section, change the Delivery Rule to Single Deliveries.
        8. Enter the Reason for Rejection.

        i followed all the step except step 8.

        the result is the same.

        I think maybe I miss some setting in master data or demand planning???

        if you have idea, please share with me. thanks

         

        Lucy

        • dear John:

           

          i found what setting which i miss as below

          • The Third-Party Procurement business topic in the Purchase Request and Order Management business package.

          Here are the reference blog

          https://archive.sap.com/documents/docs/DOC-65659

           

          thanks for your time.

           

          Lucy