Direct sales or commission sales

[Former Member]

Hi SAP Gurus

I have come across this business process in the company i am doin implementation

It looks like a third party but it differs

Customer make an order to my client and client raise a PO to the vendor and let them know its direct sales

means the vendor make a delivery to the customer and customer make a payment to the vendor and

vendor give commission to my client

Example My client sell the product price is $1500 to the customer 

to vendor the price of the material is $1000

the vendor do the delivery to the customer and get $1500

and pay my clinet the difference of 500$ 

any idea how it can be brought In to SAP  will be helpful

Thanks

[Former Member]

HI all

Thanks for the help

Have purposed this solution to the client and they told its ok yet to test

separate document for this process. and make the principal selling to end customer as a base price and principal selling price to my client as another price and difference btw this two price is the commission and invoice is raised to the vendor order related billing. and posted in the separate commission account.

hope this is right if u give any other solution please let me know thanks all

[former_member182378]

rani,

Initial suggestions are as follows:

Master data:

Create Sold To party customer - which gives the order to your client

Create Payer, also create the same as a vendor

Create Ship To party customer - which is the unloading place (as usual in SD)

Create a delivering plant - Actually the goods go from the vendor, but create a deliverying plant, this has to be given in the sales order

Pricing:

Price condition type - this must signify the money that your client shall receive (e.g. 500)

(Surcharge) condition type - Statistical - this must signify the money vendor shall receive (e.g. 1000)

Should you have the condition records for condition types, depends upon whether you know the values before hand.

Only then can you fill information in the condition records.

If your client does not know the values, then the condition types would have to be filled manually.

Process flow:

1. Customer gives an order

2. Sales order created by user in which Customer (who ordered the goods) is SP

The user finds out who shall deliver the goods, that Vendor is inputted as the Payer

Material, pricing related information given

3. Automatic PR created

4. PO created manually (optional)

5. Delivery done by Vendor, Payment received from Customer

6. Client's employee calls Client and Vendor, to know if the goods are delivered and payment is made to Vendor

7. Billing document created (with payer as Vendor)

This billing document is order related billing.

All steps in italics are out side SAP

Configuration of Document types, Item category etc.

Business decisions -

Would there be a dedicated sales document type for this process?

Item category -

Billing relevance = B (order related billing)

Schedule line category -

Identical to to CS - Important field for the creation of PR

Important comments, questions -

MM side questions - How to configure not have GR (statistical) and Invoice Verification?

In Output to Vendor - To send the notification of the work to be done

(whether Email or print etc.) The Total amount should be Price for the client + Surcharge Vendor changres

[Former Member]

Hi TW

Today discussed with the user about the the process in detail

It may have some changes with my above process

the customer make a order( but my customer suggest the vendor ) to vendor directly

the vendor do the delivery to the cusotmer directly.

customer have a letter of credit for the name of vendor and it is passed on to the vendor r payment is made direct to the vendor

like my above the price difference is given to my clinet as a commission

At the moment my client is just making a sale order for the orginal cusotmer price and make PO to the vendor price and difference they bring it as a profit

hope i didnt confuse much

any input will be helpful

Thanks

[neeraj_lal]

RajaRani,

Your process looks like a process of Commission agent. Could you please check and confirm my below point

I understood Scenario like this:

• Your Client is representative to many Company (Vendor)
• Your client is helping vendor to get order from customer.
• Customer creates order on the name of vendor???? Not on name of your client.
• Customer open LC on the name of Vendor??? Not on name of your cliant
• Vendor supply goods directly to Customer??
• Once LC credited your client become eligible for his commission from Vendor (Client)...

Please confirm..

My  query:

• as per my above understanding business transaction is going directly between Your vendor and customer.
• Your client is only providing service to get order and so eligible of commission??
• If my conclusion is true then in present business scenario what triggers to your client that business transaction between vendor and customer successfully completed??

Please advice so I can understand your requirement completely.

Regards

[Former Member]

Hi Neeraj

the scenario you have told is the exact one

they just take the commission for this order

like i told earlier they are using At the moment my client is just making a sale order for the orginal cusotmer price and make PO to the vendor price and difference they bring it as a profit

any idea r recommendation will be helpful

thanks

[Former Member]

Hi Neeraj

the scenario you have told is the exact one

they just take the commission for this order

like i told earlier they are using At the moment my client is just making a sale order for the orginal cusotmer price and make PO to the vendor price and difference they bring it as a profit

any idea r recommendation will be helpful

thanks

[neeraj_lal]

Hi Rani,

Check if below scenario suits your client, please involve FI before suggesting process to Client:

1. Create third party sales order for customer with original price and trigger PO to your vendor.

2. As you client needs to track his commission,put cost condtion having original price of material for vendor. so in this Customer Price - cost wil be your profit margin. so it means if Customer has ordered goods of 1500 $ and for vendor price is 1000$ then keep Good cost 1000$.

3. once Vendor do the delivery to customer, let him send Invoice to your business. In this as a Commission agent responsibility will lie on your client to get money from customer to pay vendor.

4. Once MIRO create customer Invoice and get payment from customer....

But real twist is do your client will accept liability of paying money to vendor in case customer of  any dispute??????? As a commssion agent normally they take such liability.... check with your client what he suggest? and advice. In SAP this is a standard third party scenario.

[neeraj_lal]

Now if above solution, is not ok to your client, please confirm what triggers that Business transaction is completed between vendor and customer????

Because if Vendor is billing directly to customer. It means payment is direct without any information of your client????

What happens if LC gets defaulted or any other dispute???? do still vendor needs to pay your client????

So if first solution is not accepeted to your client then you should ask for trigger of  payment... and exception.

Please check and advice

[Former Member]

Hi,

I understand you are implementing for customer.

If client is dealing on behalf of vendor, then client will take commission from vendor and not your customer. Therefore, unless you are doing implementation for vendor as well, it need not be your customer's concern. Is my understanding right?

In case client is dealing on behalf of customer, You may consider including condition type in pricing itself. Then brokerage/commission condition can be included in the purchase price schema, which will flow to L/C conditions as well.

--So, customer raises PO to vendor, vendor delivers and receives payment which includes commission to client.

--Or customer raises PO to client, client asks vendor to deliver as per mutual agreement. Client receives payment from customer and pays to vendor after deducting commission.

If you are implementing for client, then configure third party sales with item cat bans. Client raises sales order in favor or customer and purchase requisition/order in favor of vendor will be triggered from sales order. Vendor will supply to customer and customer will pay to vendor via L/C with a commission condition. As in other scenario, add a commission condition in pricing procedure.

[neeraj_lal]

Rani,

Check below SAP Links, Looks suitable for your scenario

http://help.sap.com/saphelp_470/helpdata/en/f9/f48337dd34ca76e10000009b38f8cf/content.htm

http://wiki.sdn.sap.com/wiki/display/ESpackages/Agency%20Business%20Process%20Components

Regards

[Former Member]

Hi

Customer sends the PO he placed and the LC to my client and they are following up at the moment but not by any erp just manually but once the customer receives the goods the vendor gets his LC pays my client the commission

Thanks

[neeraj_lal]

Rani Raja,

In this case, you may consider two solution option

Option1:  Map business prcess using some standard along with little z development.

I understood, your client is not having any responsibility of stock or inventory.

Suggested Scenario:

• Your client will create Third party sales order  which will trigger PO for vendor.
• Third party Item category will not be relevant for billing. Billing will be done by service item category via BOM.
• In Sales order, Sold to party will be customer but Bill to and payer will be Vendor.
• Once vendor and customer confirm on phone that transaction completed successful, create invoice for vendor to charge commission amount.
• You may also track transaction status via Idoc movement (Instead of phone call)  if customer and vendor system support.

Customization and Technical setting

• Create third party sales order where third party item category will not be relevant to customer invoice. trigger it to vendor by creating PR, PO.
• Sales order should have Sold to party, Ship To Party as customer, but Bill To and Payer should be vendor. you need to set customer master and vendor master for this.
• Put automatic billing block to sales order.

• For each Third party item material set BOM which explodes in sales order and create one service Item category.
• Make this service Item category relevant for order related billing.
• Do all pricing for main item, where Vendor price should be maintained as cost. So In Pricing for main item customer price value - vendor price value will be 'Margin or commission'.
• In pricing procedure of  Service Item category write formula and routine to copy Margin or commission from main item. this will be z development.
• In sales order, create Object status at Item level. you can create status profile in customization and assign it to Service Item category.
• Create different status  like PO, Processing, delivered, invoiced in status profile.
• Now as per discussion with customer  and vendor on phone user can change this object status in sales order.
• Once Object status will reach to invoice. You create invoice for all those sales order by removing billing block.

Tracking and Report:

• You may also change object status in sales order via Idoc movement, if vendor and customer support you.
• You may create a zreport for sales representative of your client, vendor name and customer to track all open order and its Item status .
• You can create automatic batch job to create customer invoice for all open item for which status reached Invoiced.

Please check with your FI and MM consultant before finalizing process

Option2: Use sap Agency business as link I provided in my earlier response. Agency business solution is avaialble in ECC.

Regards

[neeraj_lal]

Rani Raja,

Could you please confirm if your issue resolved.

Please mark the solution in SDN as  answered or helped  if given solution helped you to reach issue resolution.

In case you used any other logic than share it to community so others can be benefited.

Regards

[Former Member]

HI Neeraj

Not yet resolved still have some more collection need to be done so once the problem is resolved i will update for sure

thanks