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Author's profile photo Soumya Anchan

Third-Party Order Processing in SAP Business ByDesign system

The objective of the blog post to explain the process of “Third-party order fulfilment” in SAP Business ByDesign system.

Business Overview:

The third-party order processing scenario enables companies to sell products that will be shipped directly from the vendor/supplier to the customer without the need to carry the product in stock.



Fig1: Third Party Order Fulfilment


An illustration of a typical process flow based on the business scenarios Order-to-Cash and Procure-to-Pay (Stock) in the following. Your company sells a product to a customer. But, you do not give the customer your own product. Instead, you place an order with a supplier and tell them to deliver it to the customer’s address. After that, the Supplier issues an invoice to your company. Your company then issues a customer invoice based on the shipment details provided by your supplier.


1. Configuration Settings

Third-Party Order Processing is enabled in your solution configuration. To find this business option, go to the Business Configuration work center and choose the Implementation Projects view. Select your implementation project and click Edit Project Scope.

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

Fig2: scoping of Business Topic

Purchase Request and Order Management> Purchase Requests, the scoping question Do you want purchase orders to be created automatically from purchase requests? has been answered with Yes.

Fig3: Scoping Question

2.Material Master

Navigate to the Product Portfolio>New Material under common task.

Fig4: Material Master

Fig4: In the material master, the product is defined as a product to be purchased and sold, which means that both the status of the Purchasing tab and the status of the sales organizations in the Sales tab are set to Active.

3. List Price/Contracts

A purchasing contract or list price for one or more suppliers from which the product can be delivered has been created in the Sourcing and contracting work center.

Navigate to Sourcing and Contracting>New List Price under common task.

Fig5: Creation of List Price

Fig5: Fill all the fields that are necessary, such as Supplier, currency and Product Category. Choose the appropriate product category which is maintained in material master.


 Fig6: Creation of List Price

Fig6: In this tab choose your product and maintain the list price. Enable the “Release” check box, then finish the task.


Third Party Order Fulfilment Process Flow

                                                       Fig7: Third Party Order Processing

Third-Party Order Processing

1.Creating sales order

Navigate to Sales order>New Sales order under common task

Fill in all the fields that are necessary on the sales order’s general tab, such as account and sales unit.

Fig8: New Sales Order

Fig8: In items tab choose your product and enter the price and then set the Fulfilment indicator to External and system automatically proposes the supplier and “Release” the sales order by clicking on submit button. if there is a multiple supplier for same product. The sales representative can change the supplier by clicking to “Assign Source of Supply” button.


Fig9:Sales Order Overview Page

Fig9: Navigate to sales order>sales order overview> search for your sales order id and click on edit button.


Fig10: Sales order Document Flow

Fig 10: Since it is external fulfillment, purchase order is created automatically for the sales order.


2. third party order fulfilment

Navigate to Third party Order fulfilment>Third Party Purchase Order

Select purchase order id and click on “New Third-Party Delivery Notification” Button.

Fig11: Third party Purchase Order

Fig11: Once the supplier has delivered the product to the customer and sent you a copy of the delivery note, the buyer or the sales representative records it by going to the Third-Party Purchase Orders view of the Third-Party Order Fulfilment work center and creating the third-party delivery notification.


Fig12: Third Party Delivery Notification

Fig12: It will Navigate to the “New Third-Party Delivery Notification” page, here we need to enter the delivery notification id and click to “Release” Button. And we can also see the details of sender and ship to party.


Fig13: Third Party Delivery Notification Document Flow

Fig13: The buyer or the sales representative saves and releases the third-party delivery notification.

After releasing the third party delivery notification the system will create the third- party inbound delivery  and out delivery with the status released and Creates a goods and activity confirmation based on the information in the third-party outbound delivery. This confirmation is sent to financial accounting. Based on this outbound delivery, the system creates the outbound delivery invoice request. This is visible in the Invoice Requests view of the Customer Invoicing work center with the status To Be Invoiced.


3. Supplier Invoice

Navigate to Supplier Invoicing>invoice entry

Select purchase order id and click on “New Invoice” button.

Fig14: Supplier Invoice

Once Supplier Invoice is posted, then system updates the purchase order status to finished and sets the invoice completed status to Invoiced.

4: Customer invoice

Navigate to Customer Invoicing>Invoice Requests

Select your document id and click on” Invoice” Button.

Fig15: Customer Invoice

Once Customer Invoice is released, then system updates the sales order item invoice status to Finished and sets the sales order status to Completed.

After completing  supplier invoice and customer invoice ,you can view the full process flow of third party order fulfillment in third-party delivery notification view.


I have tried to explain the topic of “Third-Party Order Fulfilment Process” in simple terms with exact steps so that there are no errors created in the system. I hope it will be helpful for those who want to do third party order fulfilment process in SAP Business ByDesign.

Some of the Third-Party Order Process related help document from Help library:

Do comment your Feedback and thoughts on this blog post in the comment section.

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      Author's profile photo Deepali Shenaoy
      Deepali Shenaoy

      Nice blog. Keep it up..

      Author's profile photo Soumya Anchan
      Soumya Anchan
      Blog Post Author

      Thank you Deepali Shenaoy

      Author's profile photo Clément GROSSELIN
      Clément GROSSELIN


      Great Blog !

      Is there any documentation on the different web service used in the communication scenario ? More specifically on the OutboundDeliveryExecutionConfirmation service.

      I can't seem to find them in the Service Explorer view or the Communication arrangement details..

      Author's profile photo Soumya Anchan
      Soumya Anchan
      Blog Post Author

      Hi Clément GROSSELIN ,


      Thank You for your Appreciation.


      I have tried to answer your question by attaching some screenshots.


      1.Navigate to Application and user management>communication arrangement.

      Select one of the communication scenarios and click on edit button.

      1. Click on Edit Advanced Settings .

      3.Under technical data>Inbound >select the  web service>outbound Delivery Execution Confirmation. Click on download WSDL file.

      • Only in some scenario we can find Outbound Delivery Execution Confirmation web service.

      4.Open downloaded WSDL file in internet explorer or Microsoft visual studio application.

      5. It will open the WSDL file.

      This document is regarding how to download WSDL file(webservice description language),I hope this document Helps you.

      Also I have attached one link regarding Web Service request.




      Author's profile photo Hariharan G
      Hariharan G

      Hi Soumya,

      Nice blog!!

      Is there any specific report on third party order processing?.



      Author's profile photo Soumya Anchan
      Soumya Anchan
      Blog Post Author

      Hi Hariharan G,

      Thank you for your comment,

      There is no standard report is available for third party order processing, but we can  create custom report by joining some data sources.





      Author's profile photo Hariharan G
      Hariharan G



      I am expecting to have a report where i could see all the details such as Sales order, Purchase Order, Account, Supplier, Outbound delivery, Inbound Delivery.

      I have checked the data sources Inbound Delivery Item Details & Outbound Delivery Item Party Details to create a custom data source but it is not servicing the purpose. For example we could not find inbound delivery ID in Outbound Delivery Item Party Details report even though the fields are showing in the data source.

      Please check this and propose any solution or work around



      Author's profile photo Soumya Anchan
      Soumya Anchan
      Blog Post Author

      Hi Hariharan G,

      try to join these data sources.
      1.Purchase Order Item Details
      2.Sales Order Item
      3.Inbound Delivery Notification Item for Purchase Orders
      4.Inbound Delivery Details
      5.Outbound Delivery Item Details