Diff b/w Intercompany Billing and TPO.

[Former Member]

Hi SAP gurus,

What is the diff b/w Inter company Billing and Third Party Order

[Lakshmipathi]

Dear Sabina

Inter Company Billing

You can set up your system in such a way that one purchasing organization procures material for a plant from a vendor (plant) that belongs to another company code within the same client (corporate group). This is an instance of an inter-company-code stock transfer with an SD delivery and a billing document

Third Party Billing

In third-party processing, you place a purchase order with a vendor to deliver goods or perform a service for a third party (for example, for a customer).

This means that your company does not deliver the material. You forward the order to an external vendor instead, who then sends the material directly to the customer and invoices you.

Third-party processing is carried out in the components SD (Sales and Distribution) and MM (Materials Management). By creating a third-party item in a sales order, purchase requisition, or purchase order, you can request that the vendor sends the goods directly to your customer. A document can consist of one or more third-party items.

Thanks

G. Lakshmipathi

[Former Member]

Hi,

Please find below answers for your query,

Intercompany billing:

Inter company sales is the process in which a certain legal entity sells products from within a delivering plant that does belong to another legal entity.A company arranges for direct delivery of goods to its customers from the stocks maintained by the other company, but belonging to the same corporate organization. Thus leading to Inter Company Sales.This prevents the company from over stocking the goods beforehand in the their own warehouse and can choose from whom to deliver the customer.

Third party order:

In third-party order processing, your company does not deliver the items requested by a customer. Instead, you pass the order along to a third-party vendor who then ships the goods directly to the customer and bills you. A sales order may consist partly or wholly of third-party items. Occasionally, you may need to let a vendor deliver items you would normally deliver yourself.

Hope you are clear above different processes.

Let me know if you need more stuff on above processes.

Regards,

Chandra

[Former Member]

in inter comapny sales done between two sales org's of same company code and also two sales org's of different company codes, and in third party sales order vendor delivers the goods to the customer and invoices the ordering company.