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SAP Subcontracting Guide

The document describes the subcontracting process in SAP, which involves: 1. Sending subcontracting materials to vendors and generating a purchase order internally in SAP. 2. Creating a subcontracting purchase order in transaction ME21N, providing item details like material, quantity, delivery date and price. 3. Using transaction MIGO to provide components to the subcontractor by creating a transfer posting with document type "Other" and movement type 541.

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Anoop Kumar
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324 views4 pages

SAP Subcontracting Guide

The document describes the subcontracting process in SAP, which involves: 1. Sending subcontracting materials to vendors and generating a purchase order internally in SAP. 2. Creating a subcontracting purchase order in transaction ME21N, providing item details like material, quantity, delivery date and price. 3. Using transaction MIGO to provide components to the subcontractor by creating a transfer posting with document type "Other" and movement type 541.

Uploaded by

Anoop Kumar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Subcontracting Process

Subcontracting materials are sent to vendors for processing finished products. A


subcontracting purchase order is placed by converting the subcontracting requisition
into a purchase order. The system will generate a purchase order number internally.

The rates quoted by the vendor for labour charges are mentioned in the purchase order
line items. If a purchase info record has been maintained, the service charges are
defaulted into the purchase order.

To create a subcontracting purchase order, start the transaction ME21N or navigate to


the following path in SAP menu: Logistics→ Materials Management→ Purchasing→ Purchase
Order→ Create (ME21N).

In the Item Overview screen, you need to use Item Category ‘L’ which is used for subcontracting
documents. Also, you need to provide Material, Quantity, Delivery Date, Plant, and Price.
Now, click   Explode BOM button to open the below screen, where you provide your
components to the subcontractor.

Create a Transfer Posting

Use transaction MIGO to provide components to the subcontractor. In MIGO,


use Transfer Posting document type against Other, and movement type 541 as
highlighted on the screenshot below.
Next, click on Check button to check whether the document is OK. Finally, click on Post button
to post the document.
Now, when the subcontractor returned the materials after performing the work you need to enter
the received finished material back into the SAP system by using the transaction MIGO.
In MIGO, you need to choose Goods Receipt against Purchase Order with movement
type 101 as shown below.
Post Invoice Receipt

The next step of subcontracting process in SAP is to do posting of invoice


receipt against the purchase order using the transaction MIRO.

Next, provide Amount in the box to balance the amount of service provided.

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