Back-to-Back
Back-to-Back is a trading scenario where a company sells a quantity of a commodity that it does not yet own or hold in inventory. This quantity may be at a vendor’s site or may already be in transit to the company. To manage the movement and document chain when a quantity is sold to a counterparty without physically being received by the company, data must be captured about the delivered quantity, at its destination as well as potentially at its source. In addition, documents that record the flow of goods and support the financial settlement must be generated.
Back-to-Back links the purchase and sales documents (the contract or order) through the standard SAP transaction Nomination (O4NM
) It allows users to do the following:
Track inventory that is in transit for the Back-to-Back scenario in question
Link the sales and purchase processes in one transaction
Plan shipments according to the required customer and vendor terms
Explore different optionalities for purchase and sale contracts
Defer revenue recognition of a sale until the cost for the related purchase is recognized
Relate the weights, grades, and characteristics for a Back-to-Back quantity to all elements of the purchase and sale process
Mirror logistic documents from one organizational entity to another, depending on the scenario in question
Reverse documents relevant to Back-to-Back (up to a certain point)
Manage inventory based on the differences in contract terms for governing weights and governing quality (DPQS) throughout the life cycle of the Back-to-Back process