Scenario 8 — Inter-Company STO (PakSteel Karachi → PakSteel Dubai, PSPK → PSAE)
📊 Business Case — When & Why You Use This
An inter-company STO moves material between two plants that belong to different company codes (different legal entities). Because a sale effectively occurs between two legal entities, this is the heaviest standard flow in MM: it pulls in SD (outbound delivery + intercompany billing) and FI (cross-company AR/AP clearing), not just MM. Doc Type NB is used, and the goods movement is followed by a real invoice.
🕐 When to use it
One legal entity ships goods to a sister entity — e.g. PakSteel Pakistan (PSPK) sells 500 TO of TMT rebars to PakSteel UAE (PSAE), a separate Dubai LLC in AED. A real sale across legal entities is taking place.
❓ Why it matters
Crossing legal entities means the law and the books require a real transfer of value: a receivable in the seller, a payable in the buyer, intercompany revenue/COGS, and currency conversion (PKR ↔ AED). You can't do this with a simple transfer posting.
👤 Who triggers it
The receiving CC's purchaser raises the NB STO. As the MM consultant you set up the receiving side; an SD consultant handles delivery + intercompany billing; an FI consultant owns the cross-CC clearing (OBYA).
🔁 The key distinction
Different company codes = a real sale. Versus the intra-company STO (Scenario 7) where one company code just shuffles its own stock with zero P&L impact, this flow creates AR, AP, revenue, and COGS across two legal entities.
- 📖 Complete Setup Guide Step 16 (SD Setup for Inter-Co STO) first — 10 sub-steps (16A-16J)
- 🪂 Alternative: Skip this scenario and do Scenario 7 (Intra-Company STO) instead — same MM mechanics, no SD needed
- 👥 Or: Ask your SD consultant to do the setup for you
💰 Financial Impact — The Easy-Money Example
PSPK ships 500 TO of TMT rebars to PSAE for a total of PKR 75,000,000 ≈ AED 1,000,000 at a 75:1 rate. Unlike Scenario 7, money genuinely moves between two legal entities — here is the money story across both sets of books:
The big idea: because the two plants sit in different company codes, the transfer is a genuine intercompany sale: PSPK books a receivable + revenue + COGS, PSAE books inventory + a payable, and the two are squared off later by inter-company netting (F.13 / treasury). This is the opposite of the intra-company STO (Scenario 7), where the same company code just moves its own stock between plants with no P&L impact at all. Crossing the legal-entity boundary is precisely what turns "no accounting" into a full AR/AP + revenue flow with currency conversion.
🇵🇰 The Business Story
🎯 What you'll learn — what makes inter-company STO the most complex flow
- Two CCs involved (PSPK + PSAE) → real AR (sender) + AP (receiver)
- Currency conversion (PKR ↔ AED)
- SD module used — outbound delivery + intercompany billing
- Vendor master in receiving CC = supplying CC's "customer" linkage
- Customer master in supplying CC = receiving CC's "vendor" linkage
- Customs/import implications (Pakistan export, UAE import)
📋 Prerequisites — significant config
| Setup | Where | Done in Setup Guide? |
|---|---|---|
| CC PSPK + PSAE configured | Step 1 + 2 | ✓ |
| Plant PK03 + AE01 + assignments | Step 3 + 4 | ✓ |
| Customer master in PSPK for PSAE (link) | BP role FLCU01 | Step 14 |
| Vendor master in PSAE for PSPK (link) | BP role FLVN01 | Step 14 |
| Plant↔Customer + Plant↔Vendor assignments | OMGN | Step 14 |
| Sales area for supplying plant PK03 | SD config (OVXG, etc.) | SD consultant |
| Shipping point assigned to PK03 | OVL2 | SD consultant |
STO doc type for cross-CC: NB | OMGN customizing | SD/MM consultant |
| Intercompany Pricing Procedure (IV01) | SD config | SD consultant |
FERT-REBAR-01 (FERT, finished) — create steps. First time? the why behind every field.
Goods Receipt · Reference Purchase Order (or the inbound delivery) → mvt 101. The issue side is the SD delivery PGI in VL02N (mvt 643/645), not MIGO. Full guide: MIGO Selection Bar.
🔧 Step-by-Step — Transaction Flow (high-level)
8.1 — Receiving plant creates STO · ME21N doc type NB
PSAE creates a PO with PSPK's plant PK03 as "supplier" (Vendor = vendor master of PSPK linked via OMGN).
- ME21N · Doc Type:
NB· Vendor: vendor # representing PSPK (e.g., 1000099) - Org Data: Purch Org AELO (PSAE) · Purch Group RMT
- Line: Material FERT-REBAR-01 · Qty 500 TO · Plant AE01 (receiving) · SLoc EXPT
- Save
8.2 — Supplying plant creates outbound delivery · VL10B or VL10G
SD takes over — PSPK's shipping point creates outbound delivery referencing the STO.
- VL10B · selection: by Vendor → enter STO #
- Select line → click Background
- Delivery # generated (e.g., 80000123)
8.3 — Post Goods Issue from delivery · VL02N
- VL02N · delivery # · click Post Goods Issue (PGI)
- Movement type 643 or 645 posted
Accounting at supplying CC PSPK:
| Cost of Goods Sold (500000) | Dr | — |
| Inventory FERT (302000) | Cr | — |
8.4 — Intercompany Billing · VF01
- VF01 · reference delivery 80000123
- Billing type:
IV(Intercompany Billing) - Save → Billing doc #
Accounting at supplying CC PSPK:
| Customer (PSAE recv) (130000) | Dr 75,000,000 | — |
| Intercompany Revenue (510000) | Cr 75,000,000 | — |
8.5 — Receiving plant: GR · MIGO
PSAE receives the goods at AE01.
Accounting at receiving CC PSAE: (converted to AED)
| Inventory FERT (300000) | Dr 1,000,000 AED |
| GR/IR (191100) | Cr 1,000,000 AED |
8.6 — Receiving plant: Invoice · MIRO
PSAE invoices itself against PSPK's billing doc (cross-CC AP/AR).
| GR/IR (191100) at PSAE | Dr 1,000,000 AED |
| Vendor (PSPK supplier) (160000) | Cr 1,000,000 AED |
Final settlement: Periodic inter-company netting via F.13 or treasury — AR in PSPK matched against AP in PSAE.
✅ Verification — Confirm Scenario 8 Worked
- MMBE → FERT-REBAR-01 → 500 TO out of PK03 (PSPK), into AE01 (PSAE)
- VL02N / VL03N → delivery 80000123 shows Goods Issue posted (mvt 643/645)
- VF03 → intercompany billing doc (type IV) for 75,000,000 in PSPK
- FBL5N → Customer (PSAE) open receivable in PSPK; FBL1N → Vendor (PSPK) open payable in PSAE
- ME23N → STO fully delivered + invoiced
🎓 Interview-Ready Answers
Q: How does an inter-company STO differ from an intra-company STO?
Intra-company (Doc Type UB) moves stock between two plants in the same company code — no invoice, no AR/AP, no P&L. Inter-company (Doc Type NB) moves stock between plants in different company codes, so it's a real sale: SD posts an outbound delivery and an intercompany billing document (type IV), the seller books a receivable + revenue, and the buyer books inventory + a payable, often across currencies.
Q: Which modules are involved and who owns each part?
It's an MM ↔ SD ↔ FI flow. MM (you) sets up the receiving side — the NB STO and the vendor/customer links via OMGN. SD handles the outbound delivery (VL10B), PGI (VL02N), and intercompany billing (VF01, type IV). FI owns the cross-company clearing configured in OBYA and the periodic netting (F.13).
Q: Why are customer and vendor master records needed for a stock transfer?
Because the transfer crosses legal entities, SAP treats it like a customer-vendor transaction. The supplying CC needs the receiving CC represented as a customer (BP role FLCU01) so SD can bill it; the receiving CC needs the supplying CC represented as a vendor (BP role FLVN01) so MM can raise the NB PO and post the invoice. The plant-to-customer and plant-to-vendor links are made in OMGN.
Q: How is the AR in the seller eventually matched against the AP in the buyer?
Through periodic inter-company netting / clearing — typically F.13 (automatic clearing) or a treasury settlement run — which offsets the receivable booked in PSPK against the payable booked in PSAE. The cross-company posting relationships are pre-configured in OBYA.