Trading Partner: Definition
Trading Partner is a term used in trade and commerce and can be generally defined as “one of the two or more participants in an ongoing business relationship”1
Trading Partner (Company) setup
Trading Partner has a similar meaning in the context of SAP Finance and Controlling, it speaks about the business relationship among company codes. Trading Partner (field VBUND) should be captured at relevant master data and transactional data – this can be a key requirement for intercompany design. This data can then be used to consolidate financial statements as well as reporting. Some of the transactions include elimination of intercompany sales / purchases, intercompany accounts receivable / payable.
Trading Partner field is defined in the configuration node for “Company” (field RASSC) and is stored in table T880
- Transaction OX15 – Define Company (updates table T880)
- Transaction OX16 – Assign Company Code to Company
Trading Partner maintenance on master data
Trading Partner is maintained on intercompany customer and vendor masters, as well as GL accounts that are used exclusively for intercompany postings. (Whereas there usually are dedicated vendor and customer masters for intercompany transactions, there may not always be dedicated GL accounts for intercompany transactions.)
The following transaction codes are used for maintenance of trading partner on respective master data elements:
- Transaction FK02 – Vendor Master (updates table LFA1, field VBUND)
- Transaction FD02 – Customer Master (updates table KNA1, field VBUND)
- Transaction FS00 – GL Account Master Data (updates table SKA1, field VBUND)
Trading Partner information flows automatically to the transactions, once trading partner is maintained at master data level (i.e. on relevant intercompany customers, vendors and GL accounts).
However, there may be instances where a GL account may have transactions for both intercompany as well as third-party scenarios (example: Interest on loans and advances – organization can receive interest on loans from external / third party entities or from intercompany entities). It may not always be possible to define separate GL accounts for each scenario, doing so may lead to proliferation of GL Accounts.
Since the trading partner is not maintained on GL account master data and does not automatically flow to transaction data, trading partner will need to be explicitly entered at the transaction processing level. As one can imagine, it is possible that trading partner may be missed on certain transactions, thereby leading to inconsistencies and downstream impact on consolidations. Trading partner may be missed due to lack of discipline among users, lack of system checks or simply due to the quality of data sent by interfacing systems – SAP or non-SAP.
Stay tuned later this week for Part II.
1 Trading Partner definition from BusinessDictionary.com. Read more: http://www.businessdictionary.com/definition/trading-partner.html.