Setup Step 16 — SD Setup for Inter-Company STO
🎯 Why this setting exists
NB across company codes). But once stock leaves one company and enters another, the value has to move between two sets of books. That is what this SD configuration enables:
- SD side: the supplying plant's goods issue becomes an outbound delivery (e.g. delivery type
NLCC) to a virtual "customer", followed by an inter-company invoice (IV). - FI side: OBYA cross-company clearing posts the inter-CC AR/AP so both companies' balance sheets stay in balance.
💡 Easy example
So SD turns that stock-transfer order into a delivery note (the paperwork that physically ships the steel out of Karachi) and an inter-company invoice (the bill that moves the value from PSPK to PSAE). The "customer" on that delivery is just the Dubai plant wearing a customer hat; the "vendor" in Dubai's books is the Karachi plant wearing a vendor hat. OBYA is the plumbing that nets the two companies' receivable and payable against each other.
Compare this with an intra-company STO (PK01 → PK02, both inside PSPK): same legal entity, no selling, no invoice, no SD setup needed. That is why this whole step is only "do it when the scenario needs it".
🔗 How this connects to everything else
This is SD-and-FI territory, but it sits directly on top of the MM org structure you built. Here is the web — useful because on a real project you trigger the STO and must coordinate with the SD/FI consultant who owns this config.
⬆️ Depends on (must exist first)
- Step 14 — Customer/Vendor (OMGN): links the supplying plant to a vendor and the receiving plant to a customer, the bridge MM owns.
- Step 8 — Purchasing Organization and Step 10 — Purch Org → Plant: the buying side of the STO must exist for both CCs.
- The four plants (Step 3) — PK01/PK02/PK03 and AE01 — already created and assigned to their company codes.
⬇️ Enables (what this unlocks)
- The delivery + billing leg of inter-company STO — the SD delivery (VL10B) and the inter-company invoice (IV).
- Scenario 8 — Inter-Company STO (PSPK Karachi PK03 → PSAE Dubai AE01) end to end.
- Cross-company FI clearing so each entity's balance sheet stays correct.
🧩 Who owns it & why MM cares
SD The SD consultant configures the sales org, distribution channel, division, sales area and shipping points; FI owns OBYA. You don't build this — but you trigger it. The STO is an MM document, and the moment it posts a goods issue it becomes an SD delivery (e.g. NLCC) and an internal invoice (IV). Knowing that lets you speak the SD consultant's language: ask for "a sales area for the supplying plant with an intercompany distribution channel", and you'll know exactly why VL10B failed when it does. The pieces that genuinely are MM work here are the plant customer/vendor business partners (16I) and the OMGN link in Step 14.
🔮 Links to other modules (now & later)
- SD Outbound delivery, intercompany billing, and the copy control that turns the delivery into the IV invoice.
- FI Intercompany AR/AP via OBYA — receivable in the supplying CC, payable in the receiving CC.
- CO Margin and inter-company pricing flow into Controlling when the IV is billed.
🔧 Configuration — fields & steps
SD org structure for STO — 9 sub-steps. T-codes: OVX5 OVXI OVXB OVX3 OVXG OVX6 OVXD OVXC OBYA
16A. Define Sales Organization — OVX5
What: Sales Org = the SD equivalent of Purch Org — represents the legal selling entity. Stored in TVKO.
SPRO Path: Enterprise Structure → Definition → Sales and Distribution → Define, copy, delete, check sales organization
Action:
- Run OVX5 → New Entries
- Create 2 sales orgs (one per CC):
| Sales Org | Description | For CC |
|---|---|---|
PKSO | PakSteel Pakistan Sales | PSPK |
AESO | PakSteel UAE Sales | PSAE |
16B. Define Distribution Channel — OVXI
What: Distribution Channel = HOW you sell (direct, wholesale, retail, intercompany). Stored in TVTW.
SPRO Path: Enterprise Structure → Definition → Sales and Distribution → Define, copy, delete, check distribution channel
For STO learning, create:
| Code | Description |
|---|---|
10 | Direct Sales |
20 | Intercompany Sales (used for STO billing) |
16C. Define Division — OVXB
What: Division = product category (e.g., Steel Products, Cement, Services). Stored in TSPA.
SPRO Path: Enterprise Structure → Definition → Logistics – General → Define, copy, delete, check division
For learning:
10 | Steel Products |
00 | Common (cross-division) |
16D. Assign Sales Org → Company Code — OVX3
SPRO Path: Enterprise Structure → Assignment → Sales and Distribution → Assign sales organization to company code
Assignments:
| Sales Org PKSO | → CC PSPK |
| Sales Org AESO | → CC PSAE |
16E. Set Up Sales Area — OVXG
What: Sales Area = unique combination of (Sales Org + Distribution Channel + Division). It's the SD equivalent of "Purch Org + Plant" — defines what a sales unit can sell.
SPRO Path: Enterprise Structure → Assignment → Sales and Distribution → Set up sales area
Create these sales areas:
| Sales Org | Dist Channel | Division |
|---|---|---|
| PKSO | 10 (Direct) | 10 (Steel) |
| PKSO | 20 (Intercompany) | 10 (Steel) |
| AESO | 10 (Direct) | 10 (Steel) |
| AESO | 20 (Intercompany) | 10 (Steel) |
16F. Assign Plant to Sales Org + Distribution Channel — OVX6
What: Tells SAP which plants can ship for which sales orgs. CRITICAL for STO — the supplying plant must be linked to the supplying CC's sales org.
SPRO Path: Enterprise Structure → Assignment → Sales and Distribution → Assign sales organization → Distribution Channel → Plant
Assignments for STO:
| Sales Org | Dist Channel | Plant |
|---|---|---|
| PKSO | 20 (Intercompany) | PK01, PK02, PK03 |
| AESO | 20 (Intercompany) | AE01 |
16G. Define Shipping Point — OVXD
What: Shipping Point = the loading dock / shipping desk that processes outbound deliveries. Required for any SD delivery (STO or sales).
SPRO Path: Enterprise Structure → Definition → Logistics – Execution → Define, copy, delete, check shipping point
For learning, create:
SPK1 | Karachi Shipping Point |
SPK2 | Lahore Shipping Point |
SPK3 | Karachi DC Shipping Point |
SAE1 | Dubai Shipping Point |
16H. Assign Shipping Point to Plant — OVXC
SPRO Path: Enterprise Structure → Assignment → Logistics – Execution → Assign shipping point to plant
Assignments:
| SPK1 | → Plant PK01 |
| SPK2 | → Plant PK02 |
| SPK3 | → Plant PK03 |
| SAE1 | → Plant AE01 |
16I. Create Plant Customer + Vendor (Business Partners) — BP MM owns this
What: Each plant in an inter-co STO needs a representation in the OTHER CC's books:
- Receiving plant becomes a CUSTOMER in the supplying CC (so the supplier can bill it)
- Supplying plant becomes a VENDOR in the receiving CC (so the receiver has AP)
Action:
- Run BP
- Create Customer (role FLCU01) representing AE01 plant in PSPK CC + sales area PKSO/20/10
- Create Vendor (role FLVN01) representing PK03 plant in PSAE CC + Purch Org AELO
- Document the customer # and vendor # — used in OMGN (Step 14) and OBYA
16J. Define Inter-Company Clearing Accounts — OBYA FI owns this
What: When PSPK posts a CR (sale to PSAE) and PSAE posts a DR (purchase from PSPK), SAP needs a clearing G/L to balance the two CCs' books. OBYA defines these G/Ls per CC-pair.
SPRO Path: Financial Accounting (New) → General Ledger Accounting → Business Transactions → Prepare Cross-Company Code Transactions
Action:
- Run OBYA
- Enter CC pair: PSPK + PSAE
- Fill clearing accounts:
- Receivables side (PSPK side): G/L for "Receivable from PSAE" (e.g., 149xxx)
- Payables side (PSAE side): G/L for "Payable to PSPK" (e.g., 159xxx)
- Posting Keys: typically 01 (Customer Dr) and 31 (Vendor Cr)
- Save
💡 The MM consultant's role here (read this)
You typically don't configure SD setup yourself. But on a real project you:
- Tell the SD consultant: "I need a Sales Area for Plant X with a Distribution Channel for intercompany."
- Verify the SD setup is complete before promising inter-co STO to a client.
- Configure OMGN (Step 14) and the Customer/Vendor BPs (16I) — these ARE MM consultant work.
- Work with the FI consultant on the OBYA clearing setup.
🚨 Issues & fixes
But: Intra-Company STO (Scenario 7 — PK01 → PK02 within PSPK) works fine without any of this. For basic STO learning, this step is optional.
Other common gotchas: the supplying plant must be assigned to the supplying CC's sales org (16F) — assigning it to the wrong sales org is the #1 cause of the VL10B error. And the intercompany distribution channel (
20) must appear in both the sales area (16E) and the plant assignment (16F), or the delivery determination breaks.
✅ Verification
- Run OVX6 → confirm the supplying plant (PK03) is assigned to sales org PKSO with distribution channel 20.
- Run OVXC → confirm each plant has a shipping point assigned.
- Open BP → the plant customer (AE01 in PSPK) and plant vendor (PK03 in PSAE) exist with the right roles and numbers documented.
- Run OBYA → the PSPK + PSAE clearing accounts are maintained.
- End-to-end smoke test: create the STO, then VL10B creates an outbound delivery with no "plant/shipping point" error.