🧠 First, the mental model (read this once)
A Business Partner is one record for a company you deal with — and you add roles to say how you deal with them. Think of roles as hats the same company wears:
- You buy from Mughal Steel → give its BP the supplier hats.
- You sell rebar to a builder → give that BP the customer hats.
- A company you both buy from and sell to = one BP wearing both sets of hats — its address is stored once, never out of sync.
LFA1/LFB1/LFM1 for suppliers, KNA1/KNB1/KNVV for customers) through a sync called CVI — so you get the modern single record and the old tables every report uses.
🎩 The roles (the "hats")
A vendor needs three layers; a customer needs three too. You add them one at a time on the same record.
| Role (what you pick) | Typical code | What data it holds | Who uses it |
|---|---|---|---|
| Business Partner (General) | 000000 | Name, address, search term, tax numbers (NTN/STRN) | Everyone — shared base |
| Supplier — "Vendor (Finance)" | FLVN01 | Reconciliation account, payment terms, payment method | Accounts Payable — to pay the bill |
| Supplier — "Vendor (Purchasing)" | FLVN02 | Order currency, Incoterms, purchasing data | The buyer — on the PO |
| Customer — Finance | FLCU01 | Reconciliation account (receivables), payment terms | Accounts Receivable |
| Customer — Sales | FLCU00 | Sales area data — sales org/channel/division, shipping, billing, tax | Sales & Distribution |
Important — pick roles by their description, not the code. The exact role code behind a label can differ by system/version (some show "Vendor (Finance)" / "Vendor (Purchasing)"). Choose the role whose name matches what you need (general → finance → purchasing/sales) and you'll always be right. The codes above are the common S/4HANA defaults.
🔁 The universal BP creation flow
- Run BP → Create → Organization (a company) or Person (an individual). For Mughal Steel choose Organization.
- Pick the Grouping — this decides the number range (internal auto-number, or external where you type your own code like
MUGHAL21). - Start in the General role — fill name, address, search term, tax numbers → Save.
- Switch role → Supplier (Fin. Accounting) → choose Company Code → fill recon account + payment terms → Save.
- Switch role → Supplier (Purchasing) → choose Purchasing Org → fill order currency + Incoterms → Save.
- (Customer instead?) add Customer (Fin. Accounting) for the company code, then Customer (Sales) for the sales area.
First-timer tip: a role tab can't be filled until you add the role and pick its org level (company code / purch org / sales area). If a field is missing, you're probably in the wrong role or haven't selected the org level yet.
📝 What each field is — and why (every tab)
Fill? column: ✅ mandatory · ➕ set this / useful to extend · — leave blank (default is fine). The ➕ rows are the optional fields worth maintaining — extend them when the business needs it.
General role — who they are (shared by every role)
| Field (tab) | Fill? | Value | Purpose |
|---|---|---|---|
| Grouping | ✅ | (external) | Picks the number range — internal (SAP numbers) vs external (you type the code, e.g. MUGHAL21) |
| Name 1 / 2 | ✅ | Mughal Steel Industries Ltd | Legal/trading name shown on documents |
| Search Term 1 / 2 | ➕ | MUGHAL | Quick find in search helps |
| Street / House / Postal Code / City / Country / Region (Address) | ✅ | Karachi · PK · SD | Used on POs, correspondence and tax determination |
| PO Box · District · c/o name | — | blank | Extra address parts — optional |
| Language | ➕ | EN | Language for printed forms & correspondence |
| Telephone · Mobile · Fax · E-mail (Communication) | ➕ | optional | Contact data; the e-mail enables sending the PO by e-mail (output) |
| Tax Number (Identification — cat. PK0 NTN / PK1 STRN) | ➕ | NTN 0742510-3 | FBR registration — needed for withholding tax & tax reports |
| Bank Country / Bank Key / Bank Account / IBAN (Payment Transactions) | ➕ | optional | Maintain if you pay them by bank transfer (the F110 payment run uses it) |
| Industry · Legal Form · Tax Jurisdiction | — | blank | Classification/reporting — optional |
Supplier (Fin. Accounting) — "Vendor (Finance)" · how you pay them
| Field | Fill? | Value | Purpose |
|---|---|---|---|
| Company Code | ✅ | PSPK | Which set of books owes this vendor — FI data is per company code |
| Reconciliation Account | ✅ | 160000 | The bridge to the G/L. Every invoice/payment posts to this payables G/L. Must be a recon account of type "Vendor" |
| Payment Terms | ➕ | 0003 | Due date + cash discount (14d 2% / 30d net) — drives the payment program |
| Payment Methods | ➕ | (transfer) | How the auto-payment run (F110) pays them |
| Check Double Invoice | ➕ | tick | Warns if the same vendor invoice is entered twice — good control |
| Withholding Tax (type / code) | ➕ | (FBR 153) | Pakistan section-153 WHT on vendor payments — set if the vendor is subject to it |
| Sort Key · Cash Mgmt Group · Planning Group | — | blank | Line-item allocation & cash forecasting — optional |
| Payment Block · House Bank · Tolerance Group | — | blank | Block payments / preferred bank / difference tolerances — optional |
| Dunning Procedure · Dunning Recipient | — | blank | Overdue reminders — rarely used for vendors |
Supplier (Purchasing) — "Vendor (Purchasing)" · how you buy from them
| Field | Fill? | Value | Purpose |
|---|---|---|---|
| Purchasing Org | ✅ | PKLO | Which buying unit deals with them — purchasing data is per purch org |
| Order Currency | ✅ | PKR | Currency POs default to for this vendor |
| Terms of Payment | ➕ | 0003 | Payment terms applied on the PO |
| Incoterms (part 1 / part 2) | ➕ | FOB / Karachi | Who pays freight & bears risk to which point — defaults onto the PO |
| GR-Based Invoice Verification | ➕ | tick | Forces the invoice to match each goods receipt (clean 3-way match) |
| Schema Group, Vendor | — | blank | Selects a special pricing procedure — default is fine |
| Purchasing Group · Automatic PO · Min. Order Value | — | blank | Default buyer / allow auto-PO / minimum value warning — optional |
| Confirmation Control · Partner Functions (OA/PI/GS) | — | blank | Order acknowledgements / different ordering-invoicing-goods addresses — optional |
Customer (Fin. Accounting) — how they pay you
| Field | Fill? | Value | Purpose |
|---|---|---|---|
| Company Code | ✅ | PSPK | Which books the customer owes |
| Reconciliation Account | ✅ | 140000 | The receivables G/L every customer invoice/receipt posts to |
| Payment Terms | ➕ | 0001 | When the customer must pay you |
| Dunning Procedure | ➕ | (0001) | Overdue-payment reminder schedule — useful for customers |
| Payment Methods · Sort Key · Tolerance Group | — | blank | Incoming-payment handling — optional |
Customer (Sales) — how you sell & ship to them
| Field | Fill? | Value | Purpose |
|---|---|---|---|
| Sales Org / Distribution Channel / Division | ✅ | PKLO / 10 / 00 | The selling context — sales data is per sales area |
| Tax Classification | ✅ | 1 | Taxable? — drives output (sales) tax on the invoice |
| Customer Pricing Procedure | ➕ | 1 | Which pricing schema applies to this customer |
| Delivering Plant | ➕ | PK01 | Default plant goods ship from |
| Shipping Conditions · Incoterms · Terms of Payment | ➕ | (defaults) | How orders ship, delivery terms, when they pay |
| Account Assignment Group | ➕ | 01 | Picks the revenue G/L (the SD→FI bridge) |
| Customer Statistics Group | ➕ | 1 | Feeds sales reporting (LIS) |
| Partner Functions (SP sold-to · SH ship-to · BP bill-to · PY payer) | ➕ | = same BP | Who orders / receives goods / receives the invoice / pays — default all to this customer; split when a head office pays for many sites |
🏭 Worked example A — create the vendor MUGHAL21
The supplier used across the procurement scenarios. Three roles, in order.
- Run BP → Create → Organization → Grouping = your external supplier grouping.
- General role: Name
Mughal Steel Industries Ltd· Search termMUGHAL· Address Karachi, CountryPK, RegionSD· Tax: NTN0742510-3→ Save. When prompted for the external number, enterMUGHAL21. - Switch role → Supplier (Fin. Accounting) → Company Code
PSPK· Recon Account160000· Payment Terms0003→ Save. - Switch role → Supplier (Purchasing) → Purch Org
PKLO· Order CurrencyPKR· Terms0003→ Save.
💡 Your IDES supplier grouping uses external alphanumeric numbering — a pure number like
21 is rejected, so use a readable code like MUGHAL21 (better practice anyway — you can read it in ME2L/ME2N). Number-range/grouping config lives in Setup Step 18.Verify: SE16N → LFA1 (general) + LFB1 (CC=PSPK, has recon 160000) + LFM1 (EKORG=PKLO) all populated for MUGHAL21.
🏗️ Worked example B — create a customer KHIBUILD-01
A Karachi construction company that buys your finished rebar (for the FERT sales scenarios). Same flow, customer hats.
- Run BP → Create → Organization → Grouping = your customer grouping (external).
- General role: Name
Karachi Builders Ltd· Search termKHIBUILD· Address Karachi, PK · Tax NTN → Save → external numberKHIBUILD-01. - Switch role → Customer (Fin. Accounting) → Company Code
PSPK· Recon Account140000(receivables) · Payment Terms0001→ Save. - Switch role → Customer (Sales) → Sales Area
PKLO / 10 / 00· pricing/shipping/tax defaults → Save.
Verify: SE16N → KNA1 (general) + KNB1 (CC=PSPK) + KNVV (sales area) populated.
🚨 First-timer errors & fixes
| Message / symptom | Cause | Fix |
|---|---|---|
| "Number … not within interval" / number rejected | Wrong grouping for your number range (e.g. typed a number into an external range, or vice-versa) | Pick the grouping that matches how you want to number (external = you type the code) |
| Recon account field won't accept your G/L | That G/L isn't marked as a vendor/customer reconciliation account | Use a recon G/L (160000 vendors / 140000 customers), or set it in FS00 |
| Can't find the Finance/Purchasing tab | You haven't added that role, or not selected the org level | Switch to the role first, then pick company code / purch org / sales area |
| Role missing from the dropdown | BP role/CVI config | FI/Basis task — see Setup Step 18 |
▶ Related
Config behind it (number ranges, roles, CVI): Setup Step 18 — BP Master Data Config. Used in Scenario 1 (first procurement) and every PO afterwards. Materials side: Create Any Material (MM01).