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subcontracting process (SD,PP and MM ) and accounting entry from subcontractor (vendor) side in SAP

Hello SAP Experts,

Please help me with SAP subcotrcating process with below scenarion.

Company A send material X , to my Company B. Material X is customer material hence can not be shown in my stock (Balance sheet). In Company B we process the material X. For processing we use raw materials, packing material and some labour and machine activity. After processing that we send back Material x to compnay code A. We charge Service charges as invoice on Company A with one negotaited sales Price .

May I know how I can cofigure the same process in Company B as subcontractor or vendor for company A. Both the company A and B is under the same Group. I know the process and accounting entry for Company A but not too sure about Company B.

What is the Standard SAP process for subcontracting for Company B . What would be the accounting entry in Company B for materail consumption ,production order Settlement etc. In Company B we have also Material Ledger active. Please help.


Chhandak Bhattacharyya

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1 Answer

  • Jun 02, 2017 at 09:51 AM

    Hi Chhandak,

    This is looks like a Customer Service (CS) scenario for company B. You need to create a service order and carry on the work. Production order will not be necessary if it is a minor service like replacement of spares, repairing etc. You can invoice the customer using the concept of DIP profile whereby you can specify the amount due from the Co. A based on the cost incurred by Co. B. Or you can directly reference the cost from a service material (can use BOM) from material master of Co. B.

    The material should be an non-valuated material in the accounting books of Co. B.



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