In SAP S/4HANA, the creation of a supplier is preceded by the creation of a business partner. Let’s review how both concepts relate.
A Business Partner is a third party with which your company has a business interest. This can be a person, or group of people, or an organization.
In SAP S/4HANA, the business partner is the master record with which you manage your suppliers. The business partner is also used to manage other types of third parties - for example, customers or employees.
The system offers a single point of entry to create, edit, and display master data for business partners with regards to various business processes. A business partner should only exist once in the master data, independent of the number of business processes in which it is involved. This means, for example, that if a third party is both a customer and a vendor, it only needs to be set up once in SAP.
The creation of a business partner in SAP S/4HANA requires determining some mandatory organizational elements:
- Category: The Business Partner (BP) category is the term used to classify a business partner as a natural person (for example, a private individual), group (for example, a community of heirs), or organization (legal entity or part of a legal entity, such as a department of a company).
- Grouping: Each business partner must be assigned to a grouping upon its creation. The grouping determines the BP number from a predefined number range. This numbering can be external or internal.
- Role: A BP Role corresponds in general to a business context in which a business partner can appear and provides the application-specific data. A business partner can have several roles, such as a Supplier (Fin. Accounting), Customer (Fin. Accounting), Customer (SD), or Supplier (MM).
In this course, we use the standard business partner role, FI Vendor for Accounts Payable. This BP role allows the entry of the company code specific (= Accounts Payable specific) data for a business partner.
Let’s have a look to more details on these components:
Category, Grouping, and Roles of Business Partners Usage
A Business Partner can only be linked to one BP Category, that is, either a partner is a person or an organization. The category determines which fields are available in the master data - for example, the date of birth of a person, or the legal form of an organization.
Each new business partner must be assigned to a Grouping. This grouping determines the Business Partner, therefore, it cannot be changed after the BP has been created.
A BP can be linked to an unlimited number of BP Roles. First, the business partner’s General Data must be completed. It contains application-neutral data, such as address, telephone number, or bank data.
Then the BP can be linked to several additional business roles, one for each business process in which it is involved. For example, the BP is linked both to a ’Customer’ role and a ‘Supplier’ role at creation. Some months later, a new role for ‘Consumer’ is added.
Specific data is stored for each BP role. This way, maintenance is reduced, and no redundant data is stored since the general data is defined once and is independent of a BP’s function or application-specific extensions.
When a BP has been assigned the role of Supplier FI, the system will prompt you to associate it to the company codes where this business process is executed and carry out the necessary setup. For example, the supplier can be created in 3 European companies, each with different payment terms settings, and not created for American companies.
In addition, you must bear in mind that your company’s accounting department and the purchasing department have different requirements that are handled in SAP through 2 different modules: FI and MM. This will result in the usage of 2 different roles if the same supplier must be activated in the 2 modules. For instance, the G/L reconciliation account setting is only relevant to the accounting department, in the same way that the delivery schedule is only relevant to the purchasing department.
Overall, sharing the same business partner number for a customer and supplier should facilitate your daily tasks as there are fewer identifiers to manage in the master records database and in the daily operations.
However, depending on your specific processes, or if your company used different sets of numbers in legacy or external systems, sharing the number ranges could lead the users to confusion and errors.
Jennifer now feels confident that she can create a Supplier Business Partner in the system. Let's also practice the creation of a supplier.