INTERCOMPANY 202 · PROCESS MECHANICS
How does affiliate-supplied direct delivery work?
Singapore sells to the external customer but sources the order from European headquarters. SAP uses a third-party-style procurement chain to connect Singapore’s sales order to European HQ supply, direct customer delivery, internal settlement, and customer billing.
SCENARIO BOUNDARY
Intercompany relationship, direct-delivery mechanics
The supplier is an affiliated company, so the commercial relationship is intercompany. The Singapore sales item nevertheless creates procurement demand through TAS, a purchase requisition, and a purchase order.
Singapore uses a PO to source the customer order from its affiliated European headquarters. Europe delivers directly to the customer.
The selling sales organisation uses a delivering plant assigned to another company code and follows the classic or advanced intercompany billing model.
Intercompany direct-delivery flow
Select any stage to explore
SALES TRIGGER
TAS changes what the sales item does next
The sales order remains the customer-facing commercial document, but the item is not fulfilled from Singapore stock.
TAS — third-party item
Controls direct-delivery behaviour and order-related billing. It tells SAP that external procurement, rather than a Singapore outbound delivery, will satisfy the sales item.
Procurement-relevant demand
The determined schedule line creates the purchase requisition and carries quantity, delivery date, purchasing, account-assignment, and customer-delivery information into procurement.
GROUP SOURCING
The purchase order is the formal demand to European HQ
Singapore purchasing converts the automatically generated requisition into a purchase order. The purchase order identifies European HQ as supplier and the external customer as the delivery destination.
European HQ supplier BP
Must be extended to Singapore’s purchasing organisation and company code with purchasing, payment, currency, tax, and reconciliation data.
Sales-order-linked PO item
Uses the designed item category and account assignment, retains the customer sales-order relationship, and preserves the external ship-to address.
Output or integration
The PO may be sent through output, EDI, middleware, or another agreed interface. European HQ’s supply system does not have to be the same SAP system.
EUROPEAN FULFILMENT
The goods bypass Singapore
European HQ accepts the group demand, creates its supply-side order and delivery, posts goods issue, and ships to the customer address provided by Singapore.
Can Europe meet the requested date?
The confirmed quantity and date must return to Singapore so the customer promise remains realistic.
Did Europe ship the correct goods?
Delivery, PGI, carrier reference, proof of delivery, serial or batch data, and customer destination provide fulfilment evidence.
No physical goods receipt
The illustrated design uses no stock receipt in Singapore. If configured, a statistical goods receipt may record progress without creating inventory.
INTERNAL SETTLEMENT
European HQ’s invoice becomes Singapore’s purchase cost
Europe bills Singapore using the agreed intercompany or transfer price. Singapore posts the invoice against the purchase order and records the affiliated-company payable.
Internal sale to Singapore
Recognises the supply-side revenue, related tax where applicable, and intercompany receivable according to the approved legal and accounting model.
Purchase from European HQ
Uses invoice verification to record the group payable and the designed purchase cost, COGS, or clearing account. Currency, quantity, and price differences remain visible.
EXTERNAL BILLING
Singapore invoices the customer
The sales item is order-related rather than delivery-related because Singapore does not create the customer shipment. In the illustrated design, the supplier invoice is required before customer billing becomes due.
Singapore records what it owes European HQ.
Singapore records the external commercial sale.
Singapore closes the customer open item when payment is matched.
WHAT MUST CONNECT
The chain depends on six connected designs
A correct setting in one module cannot compensate for a broken hand-off elsewhere.
Organisations and partners
Singapore sales area, purchasing organisation and company code; European HQ supplier BP; Singapore internal-customer representation in Europe.
Material and source
Sales and purchasing extensions, item-category group, source list or purchasing info record, delivering supplier, customer ship-to address.
Sales control
Order type, TAS item category, procurement schedule line, billing relevance, credit behaviour, and incompletion.
Purchasing control
PR creation, PO type, item category, account assignment, release, output, confirmation, and invoice receipt.
Billing and value
Transfer price, customer price, order-related billing, invoice dependency, tax, account determination, and output.
Integration and evidence
PO transmission, order confirmation, shipment status, supplier invoice, document references, error handling, and reconciliation ownership.
A Singapore sales company accepts an order from a regional customer. The TAS item creates a purchase requisition and purchase order to European HQ. Europe ships directly to the customer and invoices Singapore. Singapore posts the supplier invoice, then creates the order-related customer invoice.
Read the complete practitioner swimlane across setup, Singapore sales and purchasing, European HQ supply, warehouse, customer, billing, and Finance.