Processing with an External Company as Work Center 

Purpose

For an external company that you regularly hire for the same tasks, you can create a special work center.

This can be advisable if the external company is not situated near to your company, and they process a large number of orders for you.

Prerequisites

You configure a cost center for each external company individually or for all the external companies collectively.

In Controlling (CO), you configure a CO activity type and a price, which reflects the conditions of the purchase order, for the cost center of the external company.

For the external company, you create a work center that is linked with the cost center and the CO activity type.

Since this form of external processing is identical with internal processing during order processing, you assign a control key for internal processing to the operations to be processed externally. In the standard system, this control key is PM01.

Process Flow

  1. You configure an individual purchase order, which has a validity period (for example, one quarter, a year), in which the purchase order conditions are defined. You assign this purchase order to the cost center for the work center that has been created for the external company.
  2. You create the order with operations to be processed externally in exactly the same way as an order with operations to be processed internally. See Creation of an Order.
  3. Print out the order papers.
  4. You hire the external company by sending the printed order papers to the external company or handing them to their employees.
  5. The tasks are performed by the external company.
  6. You confirm the order operations to be processed externally in exactly the same way as internally processed operations.
  7. Steps two to six apply for all orders that are processed within the validity period of the purchase order.
  8. The cost center of the external company is credited following the time confirmation of the operations.
  9. The cost center of the external company can be debited by issuing an invoice periodically (for example, monthly). The invoice therefore includes all the orders performed during this period. After the expiration date, the balance of the cost center is 0.

The costs are first collected on the order and then settled to the receiver specified in the settlement rule.